What does a $60,000 hire cost in Spain?
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Total annual employer cost
Full cost breakdown
Statutory contributions and typical benefits for an employee in Spain at $60,000 base salary.
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Key Takeaways for Hiring in Spain
- Employees receive 30 calendar days of paid annual leave per year, plus up to 14 public holidays depending on the region.
- Monthly payroll is standard, and Spain commonly uses extra summer and Christmas payments, unless prorated.
- Employer social contributions are high, averaging around 29.9%, while employees contribute about 6.35% to 6.40%.
- Both parents receive sixteen weeks of paid parental leave funded by Social Security.
Continent
Europe
Capital
Madrid
Currency
Euro (EUR)
Language
Spanish
Payroll Cycle
Monthly
VAT
21%
Quick Facts For Hiring In Spain
Spain Employment Contract Overview
A clear written contract is essential when hiring in Spain. Here’s a quick overview of the core terms that typically shape employment agreements.
What Do You Need To Include In A Spanish Employment Contract?
Every Spanish contract must outline the essential terms of employment so expectations are transparent and compliant with Spanish labor law.
Employee Information
- Full name
- ID number
- Role / Job title
- Start date
- Contract duration
- Working hours
- Probation and notice conditions
- Termination provisions
- Compensation details
Payroll
Average employer cost
29.9%
| Category | Details |
|---|---|
| 13th Salary | Not mandatory; subject to employer discretion |
| Avg employer tax | 29.90% |
Tax Breakdown
Personal Income Tax (PIT)
| Category | Rate / Details |
|---|---|
| Up to €12,450 | 19% |
| €12,450 – €20,200 | 24% |
| €20,200 – €35,200 | 30% |
| €35,200 – €60,000 | 37% |
| €60,000 – €300,000 | 45% |
| Above €300,000 | 47% |
Corporate Income Tax (CIT)
| Category | Rate / Details |
|---|---|
| Standard Rate | 25% |
| Reduced Rate | 15% for newly created companies during their first two years of profitability |
Social Security Contributions
| Category | Rate / Details |
|---|---|
| Employee Contributions | 6.48% of gross salary |
| Employer Contributions | 30.57% of gross salary |
VAT
| Category | Rate / Details |
|---|---|
| VAT | The standard VAT rate in Spain is 21% |
Mandatory Employee Benefits in Spain
The system also funds unemployment benefits and additional social safety nets.
| Benefits | Provider | Mandatory? | Notes |
|---|---|---|---|
| Health Insurance | Government | Payroll Contributions | All employees who contribute to Social Security automatically access the public healthcare system (Sistema Nacional de Salud). This includes primary care, specialist care, and hospital services with no point-of-service charges. Private health insurance is optional and often offered by employers to provide faster access or broader coverage, particularly for expats. |
| Pension/Social Security | Government | Payroll Contributions | Employers and employees must contribute to Spain’s Social Security system, which covers healthcare, pensions, unemployment, disability, and other social protections. The system also funds unemployment benefits and additional social safety nets. |
Leave And Holiday Entitlement In Spain
Annual Leave
Employees receive a minimum of 30 calendar days of paid annual leave each year, which typically equals 22 working days in a standard five-day workweek.
At least one block of leave must be taken in two consecutive weeks.
Employees and employers must agree on leave dates. If they cannot reach an agreement, labor authorities may decide the schedule.
Public Holidays
Employees are entitled to paid leave on up to 14 public holidays per year. These include a mix of:
-
Eight national holidays
-
Regional holidays
-
Local/municipal holidays
The exact list depends on the employee’s work location.
Sick Leave
Employees receive paid sick leave as follows:
-
Days one to three: Usually unpaid (some employers may choose to pay).
-
Days four to 20: Paid at 60% of the employee’s base salary (paid by employer or Social Security depending on timing).
-
Day 21 onward: Paid at 75% of base salary, funded by Social Security.
Sick leave can last up to 365 days, with a possible 180-day extension in certain medical cases.
Parental Leave (Maternity and Paternity Leave)
Each parent is entitled to 16 weeks of paid leave for childbirth, adoption, or foster care.
Six weeks must be taken immediately after birth.
The remaining 10 weeks are flexible and can be taken anytime within the child’s first year.
Leave may be extended to 18 weeks for multiple births or child disability.
Parental leave is 100% paid by Social Security.
Breastfeeding Leave: One hour per day (or two 30minute breaks) until the child reaches nine months.
Other Types of Leave
Employees are also entitled to:
-
Marriage Leave: 15 calendar days
-
Bereavement Leave: Two to four calendar days depending on circumstances such as travel
-
Moving Leave: One day
-
Public or Personal Duties: Paid time as required (e.g., jury duty, exams, union responsibilities)
-
Force Majeure Leave: Up to four days of paid “climate leave” for extreme weather or emergencies, with possible temporary reduced hours
Termination and Offboarding in Spain
| Type | Possible? |
|---|---|
| Termination for Cause (poor performance, misconduct, etc.) | Yes |
| Termination without Cause | Yes |
| Mutual Termination Agreement (MTA) | Yes, but not recommended. In Spain, MTAs are treated as voluntary resignations and are therefore not advisable, as the employee forfeits the right to unemployment benefits. |
| Redundancy | Not possible under the EOR setup |
Spain Employee Resignation
Notice
Form
Written notice through a signed letter which should state clearly:
-
The employee’s name and ID number.
-
The position they hold.
-
The date the letter was written.
-
The effective date of the resignation.
-
The employee’s signature.
Notice period
-
During probation: No notice period needed
-
After probation: 15 days or any other contractually agreed notice period
Payment in lieu of notice or notice waiver
Payment in lieu of notice is not allowed because it affects the final payment process. All final dues must be settled before the employee’s last working day, so the last working date must be confirmed in advance.
End-of-Service Benefits
Severance/Gratuity
Severance is not applicable for resignation.
Other Benefits
-
Prorated Salary: Payment for all days worked up to the termination date.
-
Prorated Leave Pay: Compensation for any accrued but unused annual leave.
-
Prorated Bonuses/Commissions/Expenses: Payment of any outstanding contractual or discretionary amounts.
Termination Documentation
-
Written Notice: Formal communication of the resignation.
-
Final Settlement Statement (Finiquito): A detailed breakdown of all final payments.
-
Social Security and Employment Office Notifications: This includes deregistration with Social Security and issuance of the “Certificado de Empresa” as final proof of end of employment.
Employer Termination With Cause in Spain
Acceptable grounds
-
Disciplinary Dismissal: This is for serious and culpable misconduct by the employee. Grounds include, but are not limited to:
-
Repeated and unjustified absences or lack of punctuality.
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Insubordination or disobedience.
-
Verbal or physical offenses.
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Breach of contractual good faith or abuse of trust.
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Voluntary and continuous decrease in work performance.
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Habitual drunkenness or drug addiction affecting work.
-
-
Objective Dismissal: This is for reasons unrelated to the employee’s misconduct, and is typically based on economic, technical, organizational, or production-related causes affecting the company’s viability.
Notice
Form
Written dismissal letter.
Notice period
-
Disciplinary Dismissal: No notice period is required. The termination is effective on the date the dismissal letter is delivered to the employee.
-
Objective Dismissal: A 15-calendar-day notice period is mandatory. This notice must be given in writing specifying the reasons for termination.
Payment in lieu of notice or notice waiver
For objective dismissals, the employer may choose to pay the salary for the 15-day notice period instead of having the employee work it. Disciplinary dismissals take effect immediately.
End-of-Service Benefits
Severance
-
Disciplinary Dismissal: No severance is required if the dismissal is deemed fair. However, if the employee challenges the dismissal and it is ruled unfair, they are entitled to severance.
-
Objective Dismissal: The employee is entitled to statutory severance of 20 days’ salary for each year of service, capped at 12 months’ salary. This severance must be paid at the time the notice is given.
-
Unfair Dismissal: If any dismissal (disciplinary or objective) is challenged and found to be unfair, the employer must choose between paying severance of 33 days’ salary for each year of service (capped at 24 months’ salary) or reinstating the employee.
Other Benefits
-
Prorated Salary: Compensation for days worked until termination date.
-
Accrued but Unused Leave Pay: Payment for unused annual leave.
-
Pro-rated Bonuses/Commissions/Expenses: Any due and unpaid amounts, subject to contract terms.
Termination Documentation
-
Dismissal letter stating the cause.
-
Final Settlement Statement (Finiquito) detailing all final payments.
-
Social Security Notifications, including deregistration and issuance of the “Certificado de Empresa” for the employee to apply for unemployment benefits.
Employer Termination Without Cause in Spain
Notice
Form
Written dismissal letter.
Notice period
15 calendar days.
Payment in lieu of notice or notice waiver
An employer can choose to provide payment in lieu of notice instead of the 15-day working period. The payment is for the salary corresponding to the missing days of notice.
End-of-Service Benefits
Severance
Employees are entitled to severance calculated at 20 days’ salary per year of service, with a maximum of 12 months’ salary. This payment must be made on the date of dismissal.
Other Benefits
-
Prorated Salary: Compensation for days worked until termination date.
-
Accrued but Unused Leave Pay: Payment for unused annual leave.
-
Pro-rated Bonuses/Commissions/Expenses: Any due and unpaid amounts, subject to contract terms.
Termination Documentation
-
Dismissal letter stating the cause.
-
Final Settlement Statement (Finiquito) detailing all final payments.
-
Social Security Notifications, including deregistration and issuance of the “Certificado de Empresa” for the employee to apply for unemployment benefits.
Mutual Termination Agreements in Spain
In Spain, MTAs are treated as voluntary resignations and are therefore not advisable, as the employee forfeits the right to unemployment benefits.
Notice
Form
Written agreement.
Notice period
15 days.
Waiver of notice
An employer can choose to provide payment in lieu of notice instead of the 15-day working period.
End-of-Service Benefits
Severance
Severance is negotiable.
Other Benefits
-
Prorated Salary: Compensation for days worked until termination date.
-
Accrued but Unused Leave Pay: Payment for unused annual leave.
-
Pro-rated Bonuses/Commissions/Expenses: Any due and unpaid amounts, subject to contract terms.
-
Unemployment Benefits: A mutually agreed-upon termination generally does not grant the employee the right to unemployment benefits. The employee’s formal paperwork will state the reason for exit as “mutual agreement,” which disqualifies them. Mutual Termination Agreements are not recommended for Spain as they may affect the employee’s unemployment benefits.
Termination Documentation
-
Dismissal letter
-
Finiquito: Final settlement statement (salary, leave, severance, deductions).
-
Certificado de Empresa: Required for unemployment benefits (SEPE).
-
Social Security deregistration (Sistema RED).
-
Return of company property checklist.
Offboarding Process for the End of Fixed-term Contracts in Spain
If the Fixed-Term Contract Ends Normally
Notice
- According to Article 49.1(c), if the contract has a duration of more than one year, there is an obligation to give 15 days’ notice by the employer (to the worker) before the end of the contract.
- If the fixed-term contract lasts one year or less, the employer has no legal obligation to give notice when it ends on its agreed date, unless a collective agreement or the contract requires otherwise.
End-of-Service Benefits
Severance/Gratuity
- An employee is entitled to an indemnización when a fixed-term contract ends because the agreed period expires or the assigned service is completed. This applies to all fixed-term contracts except interinidad (substitution) contracts and training contracts (contratos formativos).
- The indemnización is calculated at 12 days of salary per year worked, prorated for shorter periods. Employers usually calculate the daily rate by dividing the monthly salary by thirty, unless a collective agreement or internal policy specifies a different method. The daily salary can include regular salary components but excludes exceptional bonuses or one-off extras.
- Employees do not receive indemnización if the contract ends because of a voluntary resignation (baja voluntaria) or a valid disciplinary dismissal (despido procedente). In those situations, the contract simply ends without severance because the entitlement only applies when a contract expires naturally, not when it ends for cause or by the employee’s choice.
Other Benefits
At the end of the contract, the employer must settle all accrued entitlements. This includes:
- Salary up to the end date, for days worked but not yet paid.
- Pro rata of extra pay(s) (pagas extraordinarias), if they are not already prorrateadas (spread over the year in the monthly pay).
- Payment for any unused vacation days (días de vacaciones no disfrutadas).
- Other owed payments (overtime, bonuses, indemnities under contract or collective agreement, etc.), as applicable.
If the Employer Terminates Early
Notice
Form
Written Notice
Notice period
15 days’ notice
Payment in lieu of notice or notice waiver
Possible, the employer can pay in lieu of notice.
End-of-Service Benefits
Severance/Gratuity
The termination of a fixed-term contract entitles the employee to a statutory End-of-Service Benefit (indemnización) of 12 days’ salary per year of service.
Other Benefits
Prorated Salary: Compensation for days worked until termination date.
- Accrued but Unused Leave Pay: Payment for unused annual leave.
- Pro-rated Bonuses/Commissions/Expenses: Any due and unpaid amounts, subject to contract terms.
Final Payment Timing & Immigration and Visa Compliance in Spain
Final Payment Deadline
Final payments must be completed on or before the last working day to avoid penalties.
Penalty
- 10% penalty interest applies to delayed wage payments.
- Labor court action is available to employees, potentially adding legal costs and enforcement orders.
Visa and Immigration Compliance
For non-EU employees, termination of employment also means the termination of their work permit and/or residence visa.
Supporting Guides
Frequently Asked Questions
What are the extra summer and Christmas payments?
These are the 13th and 14th salary payments, commonly included in Spanish employment contracts. They’re typically paid in summer (June/July) and before Christmas (December). You can either pay them as lump sums or prorate them across the 12 monthly payments. If prorated, the monthly minimum wage becomes €1,381.33 instead of €1,184.
What’s the Beckham Law and who qualifies?
The Beckham Law allows eligible foreign workers to pay a flat 24% tax rate (instead of progressive rates up to 47%) for up to six years. To qualify, the employee must be a new tax resident in Spain, relocate for work, and not have been a Spanish tax resident in the previous 10 years. This makes Spain significantly more attractive for international talent.
Why aren’t mutual termination agreements recommended in Spain?
Because Spain treats MTAs as voluntary resignations, which disqualifies employees from unemployment benefits. If you want to part ways, it’s usually better to structure it as an employer-initiated termination so the employee keeps their benefits.
How much annual leave do employees get?
30 calendar days per year (approximately 22 working days in a five day week). At least one block must be taken as two consecutive weeks. If you and the employee can’t agree on dates, labor authorities may decide.
Do both parents get parental leave?
Yes. Each parent gets 16 weeks of paid leave (100% funded by Social Security). The first six weeks must be taken immediately after birth, and the remaining 10 weeks are flexible within the child’s first year.
How is severance calculated when I terminate without cause?
20 days’ salary per year of service, capped at 12 months’ salary. This must be paid on the date of dismissal along with 15 days’ notice (or payment in lieu).
When must I pay final wages after termination?
On or before the employee’s last working day. Late payments incur a 10% penalty interest and can result in labor court action.
