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Hire Employees In Spain

Updated on:
16 Jan, 2024
EOR in 
Spain
Monthly
Annually
(Save upto 15%)
$
229
/month
(billed monthly)
Start Hiring NowOffer banner
Employ contractors and employees in 160+ countries
Get started
Employ contractors and employees in 160+ countries
EOR in 
Spain
Offer banner
$
229
/month
(billed annually)
$
249
/month
(billed monthly)

Table of Content

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Spain maintains a well-developed economy, with a prominent service sector as its backbone. It also ranks as the 15th largest global economy, boasting a substantial GDP of 1.4 trillion USD.

The country's progressive education system equips its youth with skill-based expertise and attracts a steady stream of international students pursuing degrees from Spanish universities. With its talent pool of professionals from a wide range of fields, expanding your business and hiring in this country can be highly lucrative. 

Hiring employees in Spain involves navigating complex labor laws and nuances related to payroll, employee benefits, work permits, and other HR functions.

Spain Labor Laws

Spanish labor laws are extensive and dictate employer-employee relationships. Let’s look at some of the core aspects of these laws:

  • Termination: Termination of employment is subject to strict regulations, and the type of contract determines notice periods and severance pay.
  • Social Security: Under the Domestic Workers Convention, 2011 (No. 189), social security is funded through contributions from employers and employees. This system ensures access to healthcare, unemployment benefits, and retirement pensions.
  • Discrimination and Harassment:  Workplace discrimination and harassment are completely prohibited, as stated in Article 4 of the Workers' Statute. These prohibitions include variables like gender, age, and handicap. 
  • Health and Safety: The Law on Occupational Risk Prevention (Law 31/95) mandates that employers must ensure a safe working environment and take measures to mitigate or prevent risks.

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Taxes and Payroll in Spain

As a company looking to hire in Spain, it is a mandate to have an in-depth understanding of the nuances surrounding taxes and payroll in Spain. To overcome any hiccups, consider choosing an Employer of Record like Skuad to help you in this journey. 

1. Minimum Wages in Spain: 

  • According to Spanish labor laws, the minimum monthly salary for a fixed-payroll individual is €1,080
  • Payroll frequency in Spain is monthly, and it is mandatory to compensate employees using the official currency, Euro (€).

2. Employer Tax in Spain: 

  • The rate of employer tax in Spain stands at 25%, but certain companies may have additional tax obligations based on their unique circumstances. 
  • These can encompass both national and municipal-level taxes. Effective from January 1, 2022, Spain has enforced a minimum corporate tax, which is mandated for:
  • Companies with a total turnover of €20 million
  • Companies are taxed under the tax consolidation regime, irrespective of their turnover.

3. Social Security contribution:

  • In Spain, social security contributions under the general regime apply to wages and salaries.
  • Employees are subject to a general contribution rate of 6.45%, which varies based on the type of employment contract.
  • Employers, on the other hand, contribute at a rate of 30.40%, with an additional variable rate for occupational accidents. 

Working Hours in Spain

  • In Spain, the typical workweek consists of 40 hours, usually five days. 
  • The maximum allowable working hours per week is 48. 
  • Any hours worked beyond this threshold are considered overtime and subject to additional compensation.

Probation Period in Spain

  • Collective agreements determine the duration of a probation period in Spain. 
  • When there's no agreement, the probation period can't exceed 6 months for college graduates or 2 months for all other employees. 
  • For companies with less than 25 employees, the probation period for non-skilled workers is limited to three months. Open-ended contracts in smaller companies with fewer than 50 employees can have a probationary period of up to one year, per the Royal Decree-Law 3/2012.

Employee Benefits in Spain

Per Spanish employment laws, permanent and temporary employees receive statutory benefits in Spain. However, as stated in Estatuto de Los Trabajadores (Spanish Workers’ Statutes), self-employed workers and contractors are not entitled to benefits in Spain.

The statutory benefits to offer as an employer in Spain have been discussed below:

Spanish Leave Entitlements: 

  • Spanish employees get 30 working days of leave annually. 

Maternity Leave in Spain: 

  • Maternity leave in Spain is offered to pregnant employees for 16 weeks right after giving birth. 
  • If there are complications or multiple births, employers must increase the leave period by 15 days as per the leave policy in Spain

Partner and Paternity Leave in Spain: 

  • Fathers get paternity leave in Spain, similar to the mothers. 
  • They are eligible for 16 weeks of paid time off as paternity leave. 
  • Employees have the option to prolong their paternity leave for up to 13 weeks to attend to the needs of a child.

Overtime: 

  • Overtime is allowed up to 80 hours per year. Employers must pay the overtime compensation within four months of the date.
  • Both the employer and employee must keep a record of overtime for fair compensation.

Sick Leave in Spain: 

  • Employees have sickness benefits as per the leave policy in Spain. 
  • For common illnesses, no payment is made for the first three days. 
  • The employer provides sickness benefits from the fourth to the 20th day, employees get 60% of the regulatory base. After the 20th day, employees get 75% of their regulatory base.

13th and 14th-Month Salary: 

  • Spanish employees receive an extra salary, known as "pagas extraordinarias," in addition to their regular pay. 
  • This bonus is typically given twice a year, during summer and Christmas, equaling 1/14th of their annual salary.

How to Hire Talent in Spain

When hiring in Spain, you can consider these strategic approaches:

Setting up a Subsidiary

  • One viable approach is to set up a subsidiary in Spain. 
  • A subsidiary is a separate legal entity under your parent company. It gives you control over finances and legal matters while leveraging support and resources from the parent company. 
  • Keep in mind that it can be time-consuming and costly.

Hiring as a Contractor

  • When you hire contractors in Spain, you bring in external professionals or companies for specific tasks or projects. 
  • Contracting specialists is less expensive than recruiting full-time staff for project-based work. 
  • Since firms are not required to cover benefits or employment-related fees, this approach gives flexibility and cost savings.
  • However, creating clear contracts outlining the scope of work, payment terms, and deadlines is crucial to avoid legal and compliance issues and ensure healthy professional relationships.

Partnering with an Employer of Record (EOR) 

  • Consider partnering with an Employer of Record (EOR) like Skuad in Spain to simplify hiring full-time employees and contractors. 
  • EORs handle legal compliance, payroll, benefits, HR, and risk mitigation and offer flexibility to accommodate your staffing needs. 
  • This partnership streamlines international expansion, allowing you to focus on core business activities and growth while offloading administrative and regulatory burdens.

Cost of Hiring in Spain

In Spain, the law establishes a minimum level for benefits and pensions financed through the Social Security System. Employers must contribute 29.90% of the employee's gross base salary. These contributions cover the required benefits and pensions, commonly known as Mandatory Employer Payroll Contributions.

Establishing a Subsidiary vs. Employer of Record (EOR) in Country

When deciding on your hiring strategy in Spain, you have two primary options: setting up a subsidiary or partnering with an established Employer of Record (EOR) like Skuad. Let's delve into a comparative breakdown of these approaches:

Parameters Setting up a Subsidiary Partnering with Skuad
Initial Investments Involves a substantial investment in setup costs and legal fees. Offers a cost-effective alternative. Skuad has an established local presence that helps reduce financial burden.
Setup Time It may take a substantial amount of time to set things up. Companies can start hiring employees quickly, within a few days.
Employment Responsibilities All employment risks are handled by the subsidiary. This demands HR expertise and management, which leads to added costs. Skuad eases the burden on subsidiaries by taking on employment responsibilities, and reducing risks.
Operational Overhead There are substantial ongoing costs, including HR management, taxation and legalities. Ongoing overhead is minimal with Skuad as they manage day-to-day HR operations, taxes and legal compliance.
Commitment and Flexibility Requires a long-term commitment, which may lead to challenges to exit due to changing market conditions. Offers flexibility for engaging in short-term or trial projects that can enable you to adapt and respond to evolving market trends.
Local Compliance Expertise Subsidiary needs to comply with local regulations, which requires expert understanding and allocation of resources to maintain compliance. Skuad specializes in local compliance, simplifying regulatory adherence and contributing to a smoother operational process for your business.
Parameters Partnering with Skuad Setting up a Subsidiary
Initial Investments Offers a cost-effective alternative. Skuad has an established local presence that helps reduce financial burden. Involves a substantial investment in setup costs and legal fees.
Setup Time Companies can start hiring employees quickly, within a few days. It may take a substantial amount of time to set things up.
Employment Responsibilities Skuad eases the burden on subsidiaries by taking on employment responsibilities, and reducing risks. All employment risks are handled by the subsidiary. This demands HR expertise and management, which leads to added costs.
Operational Overhead Ongoing overhead is minimal with Skuad as they manage day-to-day HR operations, taxes and legal compliance. There are substantial ongoing costs, including HR management, taxation and legalities.
Commitment and Flexibility Offers flexibility for engaging in short-term or trial projects that can enable you to adapt and respond to evolving market trends. Requires a long-term commitment, which may lead to challenges to exit due to changing market conditions.
Local Compliance Expertise Skuad specializes in local compliance, simplifying regulatory adherence and contributing to a smoother operational process for your business. Subsidiary needs to comply with local regulations, which requires expert understanding and allocation of resources to maintain compliance.

Work Visas and Work Permits in Spain 

Work permits in Spain, also known as long-stay visas, allow you to be legally employed in Spain as a foreign citizen. While nationals of certain European countries can work in Spain without a permit, if you hail from any other country aside from Europe, you will need a work visa in Spain.

Compliance Risks of Hiring Employees in Spain

When hiring workers in Spain, it's vital to understand the compliance risks. Spain's labor laws, which cover contracts, working hours, and safety, are comprehensive. Here are the main compliance risks:

  • Contractual Terms: Ensure employment contracts meet local laws, specifying job details, hours, and probation periods.
  • Working Hours: Strict rules apply to work hours, breaks, and rest periods, and there are penalties for non-compliance. Therefore, it is important to track hours accurately.
  • Social Security: Make timely and accurate social security contributions or face financial penalties.
  • Workplace Safety: Non-compliance with safety rules, risk assessments, and protective measures can result in fines and legal liabilities.
  • Non-Discrimination: Prevent bias based on gender, age, or disability to avoid discrimination claims and penalties.
  • Data Protection (GDPR): Handle employee data according to GDPR to avoid fines.
  • Immigration and Work Permits: If hiring foreign workers, navigate immigration and work permit requirements to prevent legal issues and potential deportations.

Top Job Listing Sites in Spain

Some of the best job listing sites in Spain have been listed below:

  • Infojobs
  • Infoempleo
  • Indeed
  • Trabajos
  • Monster
  • Tecnoempleo
  • Xpatjobs
  • Totaljobs
  • ThinkSpain
  • Turijobs

Hiring Trends in Spain in 2024

Recent market trends have shown a steady adoption of hybrid work models and remote working cultures in Spain. This is reinforced by the government's introduction of new remote working agreements, highlighting its commitment to regulating and supporting the evolving work landscape. 

Here are the key hiring trends in Spain:

  • Remote and Hybrid Work: Spanish companies are increasingly adopting remote and hybrid work models, providing job seekers with flexible work options.
  • Flexible Job Market: Job aspirants seek roles with a mix of remote and in-person work for improved work-life balance.
  • Digital Skills: Demand for digital skills has surged, with proficiency in remote collaboration tools being highly sought after.
  • Virtual Recruitment: Recruitment processes are going digital, including interviews and onboarding.
  • Evolving Company Cultures: Company cultures are shifting toward trust, communication, and results-oriented performance, allowing for the acceptance of remote work.

Planning to Hire in Spain? Choose Skuad

Hiring in a foreign nation can be both exhaustive and cost-intensive. All you need is a simple solution to maintain compliance with Spain’s labor laws and, at the same time, maintain a competitive edge. This is where an Employer of Record (EOR) like Skuad can be a valuable partner.

Skuad specializes in navigating the complexities of Spain's employment regulations. Collaborating with Skuad can help simplify hiring employees in Spain and enable top management to focus on core business activities. 

Interested in exploring how Skuad can support your global expansion efforts? Book a demo with us today!

FAQs 

How to hire employees in Spain?

There are two main approaches to hire employees in Spain:

  1. Setting up a Local Entity: Companies can establish a local presence in Spain, navigating Spanish labor laws and employment regulations directly. This includes managing contracts, compliance with wage standards, and understanding working hours and employee benefits as per Spain employment laws.
  2. Partnering with an Employer of Record (EOR): For companies not wanting to set up a local entity, partnering with an EOR in Spain is an efficient alternative. An EOR handles all aspects of employment compliance, payroll, and HR, simplifying the process of hiring in Spain.

Can a US company employ someone in Spain?

Yes, a US company can hire employees in Spain, but they must follow Spanish labor laws, including creating proper employment contracts. 

How much does it cost to employ someone in Spain?

The cost of employing someone in Spain includes the net salary and also additional employer contributions for social security, work accidents and illness insurance, unemployment fund, and other mandatory fees. Additionally, employers must consider the minimum wage requirements in Spain. The total cost to the employer is higher than the employee's net salary due to these extra contributions. For specific details and current rates, including the minimum wage, get in touch with our experts!

limited-offer-banner
EOR in 
Spain
Monthly
Annually
(Save upto 15%)
$
229
/month
(billed annually)
Start Hiring Now

Employ contractors and employees in 160+ countries

Get started
limited-offer-banner
EOR in 
Spain
$
229
/month
(billed annually)
$
249
/month
(billed monthly)

Employ contractors and employees in 160+ countries

Table of Content

Building a remote team?

Employ exceptional talent, anywhere, anytime!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Looking to hire employees and contractors in Spain? Skuad's EOR platform can help!

Talk to our EOR experts
start hiring