Hiring in Spain means taking on a significant set of payroll obligations before you pay your first employee a single euro. Spain’s Social Security system is employer-heavy: the bulk of contributions fall on your side of the payslip, and the rules are detailed. This guide breaks down exactly what you owe, when you owe it, and how the system is structured so you can budget accurately and stay compliant from day one.
Social security contributions in spain
Spain’s Social Security system is administered by the Tesorería General de la Seguridad Social (TGSS). Employers and employees both contribute, but the employer share is substantially larger. Contributions are calculated as a percentage of the employee’s monthly contribution base, which is broadly equivalent to gross salary, subject to a cap.
For 2026, the maximum monthly contribution base is €5,101.20. Salaries above this threshold are subject to additional rules covered below.
Employer contribution rates (general regime, 2026)
The rates below apply to most standard employment relationships under the General Regime (Régimen General):
| Contribution type | Employer rate |
|---|---|
| Common contingencies (contingencias comunes) | 23.60% |
| Intergenerational Equity Mechanism (MEI) | 0.75% |
| Unemployment (desempleo, indefinite contracts) | 5.50% |
| Professional training (formación profesional) | 0.60% |
| FOGASA (Wage Guarantee Fund) | 0.20% |
| Subtotal (excluding professional contingencies) | ~30.65% |
On top of these rates, you’ll pay a professional contingencies contribution (accidents at work and occupational illness) of between 1.5% and 7.5%, depending on the industry risk classification assigned to your activity. Higher-risk sectors attract higher rates. This is why total employer on-costs are commonly quoted as approximately 30–31% on top of gross salary.
Employee contribution rates
For completeness, employees contribute the following from their gross pay:
- Common contingencies: 4.70%
- Unemployment: 1.55%
- Professional training: 0.10%
- MEI (employee share): 0.15%
These are withheld by the employer and remitted to the TGSS alongside the employer contributions.
The solidarity contribution for high earners
For employees whose salaries exceed the maximum contribution base of €5,101.20 per month, Spain applies a solidarity contribution on the excess. The rates are progressive:
- First tranche of excess: 1.15% (split between employer and employee)
- Further tranches: up to 1.46% (split between employer and employee)
This means that for highly paid employees, your actual contribution burden extends beyond the capped base. Budget for it if you’re hiring senior or specialist roles with above-average salaries.
Irpf: income tax withholding
Spain’s personal income tax is called IRPF (Impuesto sobre la Renta de las Personas Físicas). IRPF isn’t an employer cost in the sense that the employer doesn’t pay it directly, but you’re legally required to calculate, withhold, and remit it on behalf of each employee. Getting this wrong creates liability for the company.
The withholding rate is determined by the employee’s personal circumstances (family situation, other income, deductions), but the underlying national tax brackets for 2026 are:
| Annual income | Rate |
|---|---|
| Up to €12,450 | 19% |
| €12,451–€20,200 | 24% |
| €20,201–€35,200 | 30% |
| €35,201–€60,000 | 37% |
| €60,001–€300,000 | 45% |
| Above €300,000 | 47% |
Spain also has regional IRPF rates layered on top of the national rates, so total effective rates can vary depending on where your employee is based. Your payroll system needs to account for both components when calculating the correct withholding.
The beckham law: a special regime for foreign workers
If you’re relocating foreign talent to Spain, the Beckham Law (officially the Régimen Especial de Impatriados) is worth understanding. It’s a simplified tax regime that allows qualifying inbound workers to pay a flat 24% on Spanish-sourced income up to €600,000 per year, rather than the progressive IRPF scale. Income above €600,000 is taxed at 47%.
Key eligibility conditions:
- The individual must not have been a Spanish tax resident in the 5 years prior to arriving
- The move to Spain must be tied to an employment contract, a director role, a research/scientific activity, or qualifying remote work
- The application window is 6 months from the date of Social Security registration, so timing matters
The regime lasts for 6 years (the year of arrival plus the following 5). For high earners who qualify, it can represent a meaningful reduction in overall tax burden, which can help with talent attraction and relocation conversations. From a payroll perspective, you’ll apply a flat 24% withholding rate rather than calculating progressive IRPF for eligible employees.
Employer registration obligations
Before you can put anyone on payroll in Spain, you need to complete two registrations.
Tgss registration via sistema red
You must register as an employer with the TGSS and enroll each employee through the Sistema RED online platform. Registration must happen within 10 days of the employee’s start date. Late registration can trigger penalties and retroactive contribution liabilities.
Sepe notification
You’re also required to notify the SEPE (Servicio Público de Empleo Estatal, Spain’s public employment service) of each new hire within 10 days of the contract start date. This applies to both indefinite and fixed-term contracts.
Both obligations run to the same 10-day deadline, so treat them as a paired task in your onboarding checklist.
How to hire in spain as a foreign company
Foreign companies without a legal entity in Spain have two main paths for compliant hiring.
The first is setting up a Spanish subsidiary or branch. This gives you direct control but involves significant setup time, ongoing compliance overhead, and local administrative infrastructure.
The second is working with an Employer of Record (EOR). An EOR employs workers on your behalf through an existing legal entity in Spain, handling Social Security registration, payroll, IRPF withholding, and all TGSS and SEPE filings. You retain full day-to-day management of the employee; the EOR handles the legal employment relationship and compliance layer.
For companies that want to test the Spanish market, hire a small team quickly, or avoid the cost and complexity of entity setup, EOR services are often the faster and lower-risk route.
FAQ
What is the total employer Social Security contribution rate in Spain?
For most employees under the General Regime, the employer contributes approximately 30–31% of gross salary in Social Security costs. This includes common contingencies (23.60%), the MEI (0.75%), unemployment (5.50%), professional training (0.60%), and FOGASA (0.20%), plus a professional contingencies rate of 1.5–7.5% depending on your industry risk classification.
Is there a cap on Social Security contributions in Spain?
Yes. Contributions are calculated on the employee’s monthly contribution base, which is capped at €5,101.20 in 2026. Salaries above this cap are subject to the solidarity contribution rather than the standard rates, so high earners don’t escape the system entirely.
Does the Beckham Law affect employer payroll obligations?
The Beckham Law affects the employee’s IRPF rate, which changes how you calculate withholding. Instead of using the progressive IRPF brackets, you withhold at a flat 24% on Spanish-sourced income up to €600,000. Social Security contribution rates are unchanged: you still pay the same employer contributions regardless of whether the employee is on the special regime.
What happens if you don’t register with the TGSS on time?
Failure to register within the 10-day window can result in financial penalties and liability for unpaid contributions from the date the employment relationship began. Spain’s labour inspectorate (Inspección de Trabajo) actively enforces registration obligations, particularly for foreign companies operating without a local entity.
