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Employment law in Spain

It's important both as an employer or employee to be aware of the different types of work contracts, holiday entitlement and social security requirements when considering the options of working in Spain.

Tips on hiring employees in Spain

Employment in Spain is highly regulated, with the main purpose to protect an employee's rights.

The regulations are complex, jobs are grouped into categories and each category has a different set of regulations, called the convenio colectivo. The convenios regulate, for example, the legal salary range for each job, hours in a working day, vacation days per year. The following norms, though, generally hold true for employment in Spain:

  • A 40-hour week.

  • Either 14 payments or 16 1/2 payments annually. (yes, that's true. If you choose 14 payments, you pay the monthly salary plus two extra payments due by July 10 and December 15.

  • Vacation of 21 business days for each full year worked. See FAQ regarding holidays.

  • There are no sick days per se. If an employee gets sick, they should find a doctor to sign a baja confirming that they are unable to work. With a baja, social security then takes over to pay the salary of the employee after a period of time.

  • If you lay off someone, you pay 45 days of indemnization for each year that the employee worked for you. Note that if you fire someone with sufficient cause, then there is no indemnization payment necessary. In either case, though, you must pay something called a finiquito, which mainly covers any vacation that the employee has not yet taken. Make sure you get this finiquito signed by the employee.

  • The employee has a right to 15 days (including weekends) for a marriage, 2 days for the birth of a child or the death of a family member, 1 day for home relocation, and 4 months for maternity leave.

A little advice to employers in Spain:

  • Be aware that salaries are lower in Spain than in northern Europe and the USA. You can contact us before making your offer to see if you are in the range for Spain.

  • When making a salary offer to someone in Spain, make sure you quote a gross annual salary (sueldo en bruto) rather than a net salary, so you're not in for a rude surprise.

  • Companies have traditionally avoided giving indefinite contracts because of the difficulties in laying off such employees, and the high compensation package involved. Consequently, the Spanish mentality is such that receiving an indefinite contract is almost as important as what salary they will actually receive.

  • You can't be too careful about employee issues. Spain is not at all a litigious country EXCEPT when it comes to an employee who has been fired.

Types of work contracts

Article reprinted from the Ministry of Economy.

Indefinite contracts

This category includes the normal indefinite contract as well as several types of indefinite contracts with government incentives. The main characteristics of the normal indefinite contract are:

  • In the absence of any other formalized contract type, the contract is presumed to be normal indefinite.

  • Severance pay for improper dismissal is a maximum of 45 days salary for every year worked, up to a maximum of 42 months equivalent salary.

  • There are no Social Security subsidies or any other financial incentives.

Indefinite contracts with incentives may be used when hiring:

  • Workers over 45 who have been unemployed for at least one year.

  • Women unemployed for more than a year who have been hired for work in sectors where women have been traditionally under-represented.

  • Workers between 30 and 44 who have been unemployed for more than a year.

  • Unemployed workers under 30 years of age. Workers with disabilities.

The main characteristics of an indefinite (indefinido) contract with incentives are:

  • Severance pay for improper dismissal is 33 days salary for each year worked with a maximum of 24 months equivalent salary.

  • Subsidies of up to 75% from the employer's social security contribution.

  • Tax benefits.

Temporary work contracts

The main types are:

  • Contract for a specific project or service, arranged for the purpose of performing work or providing a service which is temporary but of uncertain duration.

  • Casual contract due to production overload or backlog. The maximum duration of this type of contract is six months in any twelve-month period.

  • Contract to sit in for employees entitled to return to their job. The duration of this contract is the period during which the absent employee retains the right to return to his or her job.

  • Work experience contract. This contract can be arranged with university or junior college graduates or persons with vocational qualifications or recognised equivalent qualifications, provided that not more than four years have elapsed since they completed the related training. The duration is from six months to two years.

  • Trainee contract. This type of contract can be arranged with workers aged 16 to 21 who do not have the necessary qualifications to obtain a 'work experience contract'. The duration of this contract ranges from six months to two years, although it may be extended to three years by a collective labor agreement.

Transitory employment needs may be met through workers provided by temporary work agencies.

Frequently Asked Questions

I would like to have employees in Spain. What is the best way to do so?

There are various alternatives. You can create a Spanish company, then have the company hire employees. This carries a relatively cost, though, if your business is just starting or if you only need employees in Spain for a limited time. If you don't plan on having a physical business in Spain, then you should consider our service to register your foreign business with the social security office. Another alternative is to have the prospective employee set up as self-employed (autónomo).

As an employer in Spain, how much will I pay to social security?

This table shows the typical figures:

  Percentage of gross paycheck
Reason for contribution Employer Employee Total
Standard 23,6% 4,7% 28,3%
Unemployment* 6,0% 1,6% 7,6%
Other** 2,0% 0,1% 2,1%
Total 31,6% 6,4% 38,0%

These percentages may be slightly different depending on your work contract (*). Salary guarantee in case of bankruptcy; professional studies; additional amount based on the employee's professional classification (**).

What are the holidays in Spain?

There are national, state, and local holidays. For a list, go to Spain's Social Security site, and on the left side, click on 'Mas informacion', then 'Calendario laboral'.

I am a foreigner working in Spain. My company is paying into the Spanish social security system. Can this be transferred into my native country's system?

Yes. The amount that you have accumulated in the Spanish system can be transferred to any other EU country and any country that has a treaty with Spain. Go to Spain's Social Security site, and see 'Internacional -> Convenios bilaterales' for a list of countries.