Guide to Hiring in Spain

Overview

Spain is a country located in southwestern Europe, occupying most of the Iberian Peninsula. With a labour force of approximately 25 million people and more than 22 million employed workers, it is one of the largest labour markets in Europe and home to a highly educated workforce.

Spain's economy is the fourth-largest in the European Union and among the world's largest economies, with a nominal Gross Domestic Product (GDP) of approximately US$2.0 trillion (forecast for 2026).

The country's major industries include automotive manufacturing, tourism, technology, renewable energy, construction, agriculture, and advanced services.

Spain has a Human Development Index (HDI) of 0.918, placing it among the world's most developed countries, and a literacy rate of over 98%, making it an attractive location for businesses looking to expand internationally.

The country is also known for its vibrant culture, high quality of life, modern infrastructure, and favourable climate, making it a popular destination for both international businesses and foreign workers. With these advantages, Spain offers significant opportunities for companies seeking to hire skilled talent and grow their operations.

IGIC (Canary Islands) and IPSI (Ceuta/Melilla) are separate regimes with different rates.

Payroll and taxes

Employer contributions

Employer payroll contributions consist of the following main taxes and social security charges:

• 23.60% – Common Contingencies (Social Security Fund)

• 5.50% – Unemployment Fund (for permanent contracts)

• 0.20% – Salary Guarantee Fund (FOGASA)

• 0.60% – Vocational Training

• 0.75% – Intergenerational Equity Mechanism (MEI)

• Variable rate (approximately 0.9%–7.15%) – Occupational Accidents and Professional Diseases (AT/EP), depending on the employee's role and industry

The standard employer contribution rate is approximately 30.65%, excluding occupational accident insurance, which varies according to the nature of the work performed.

For 2026, the monthly social security contribution base ranges from a minimum of €1,424.40 to a maximum of €5,101.20.

In addition, employers may be subject to the Solidarity Contribution on salary amounts exceeding the maximum contribution base. For 2026, the rates are:

• 1.15% on earnings up to 10% above the maximum contribution base

• 1.25% on earnings between 10% and 50% above the maximum contribution base

• 1.46% on earnings more than 50% above the maximum contribution base

Employee contributions

Employee payroll contributions consist of the following main deductions:

• 4.70% – Common Contingencies (Social Security Fund)

• 1.55% – Unemployment Fund

• 0.10% – Vocational Training

• 0.15% – Intergenerational Equity Mechanism (MEI)

The standard employee contribution rate is approximately 6.50% of the contribution base. Employees earning above the maximum contribution base may also be subject to a small employee share of the Solidarity Contribution.

All workers in Spain are generally subject to these contributions, which fund social security benefits, unemployment protection, vocational training programmes, and the country's public pension system.

Income tax

Employees in Spain are subject to Personal Income Tax (Impuesto sobre la Renta de las Personas Físicas – IRPF). Income tax is calculated using a progressive rate system, with rates increasing as taxable income rises. The exact amount payable may vary depending on the employee's autonomous community, as Spain's regions can apply additional tax rates and allowances.

The general income tax rates applicable in most regions are:

Income from savings, including dividends and capital gains, is taxed separately at progressive rates ranging from 19% to 28%, depending on the amount received.

It is important to note that regional tax rates may differ. For example, Madrid generally has one of Spain's lower top effective tax rates, while regions such as Catalonia and Valencia apply higher rates for top earners.

Foreign employees relocating to Spain may qualify for the special expatriate tax regime, commonly known as the Beckham Law. Eligible individuals can be taxed at a flat rate of 24% on Spanish-source employment income up to €600,000 per year, subject to meeting the applicable conditions.

In addition to income tax, employees are required to make social security contributions through payroll deductions. The standard employee social security contribution is approximately 6.50% of the contribution base, covering common contingencies, unemployment insurance, vocational training, and the Intergenerational Equity Mechanism (MEI).

Minimum wage

Spain's statutory minimum wage (SMI) is €1,221 per month when paid in 14 instalments, equivalent to €40.70 per day and €17,094 gross per year.

For domestic workers, the minimum hourly rate is €9.55 per hour, which includes the proportional value of annual leave and statutory extra salary payments.

Working hours

In Spain, the maximum duration of the standard working week is 40 hours, calculated as an average over the year, unless a collective bargaining agreement provides for a shorter working schedule. Although the Spanish Government proposed reducing the statutory working week to 37.5 hours, the bill was rejected by Congress in September 2025 and the 40-hour limit remains in force.

Working schedules vary significantly between industries and employers. While some businesses traditionally operate split shifts with a longer midday break, many organisations, particularly multinational companies and service-sector employers, follow a continuous working day (jornada continua) with standard office hours.

Under the Spanish Workers' Statute and Royal Decree-Law 8/2019, employers are required to maintain an accurate daily record of working time for all employees. This includes recording start and finish times each day, and records must be retained and made available to labour inspectors when required. Employers that fail to comply with working time recording requirements may face financial penalties.

Key working time rules include:

• Maximum standard working week: 40 hours on average over the year.

• Daily working time records: Employers must record employees' working hours each day.

• Rest between working days: Employees are generally entitled to a minimum of 12 consecutive hours of rest between shifts.

• Weekly rest period: Employees are generally entitled to at least one and a half uninterrupted days of rest each week.

• Collective agreements: Many sectors provide shorter working hours or additional flexibility through collective bargaining agreements.

Overtime

Employees who work beyond their normal working hours may be entitled to overtime compensation. Under the Spanish Workers' Statute, the maximum number of overtime hours that an employee may work is generally 80 hours per year. However, overtime hours that are compensated with equivalent paid time off within four months do not count towards this annual limit.

The law does not establish a fixed overtime premium. Instead, overtime must be compensated either through additional pay or equivalent time off, as determined by the applicable employment contract or collective bargaining agreement. Any overtime worked must be compensated at a rate that is not lower than the employee's ordinary hourly rate.

Key overtime rules include:

• Maximum overtime: 80 hours per year, excluding overtime compensated with time off within four months.

• Overtime compensation: Determined by the applicable collective bargaining agreement or employment contract.

• Minimum payment requirement: Overtime cannot be paid at a rate lower than the employee's standard hourly wage.

• Voluntary overtime: Overtime is generally voluntary unless otherwise required by a collective agreement or specific contractual provisions.

• Worker restrictions: Overtime is generally prohibited for employees under 18 years of age and for part-time workers, except in limited circumstances involving agreed additional hours.

• Claims period: Employees generally have one year to bring a claim relating to unpaid overtime.

As with many employment matters in Spain, collective bargaining agreements may provide more favourable overtime arrangements than the statutory minimum requirements.

Employee benefits

13th and 14th-month salary

In Spain, employees are entitled to receive two extraordinary salary payments each year (pagas extraordinarias), as established by the Spanish Workers' Statute. These payments are commonly made in July and December, although the timing and amount may vary depending on the applicable collective bargaining agreement.

Employers and employees may agree to prorate these additional payments across the year, meaning the value of the extra payments is included within the employee's regular monthly salary rather than being paid as separate lump sums. This arrangement is common in many sectors and is often permitted by collective agreements.

Key points include:

• Two extraordinary salary payments per year are generally required under Spanish employment law.

• Payment dates and amounts are typically determined by the applicable collective bargaining agreement.

• Extra payments are often paid in summer and at Christmas, although other arrangements may apply.

• Proration is permitted in many cases, allowing the value of the extra payments to be distributed across the employee's 12 monthly salary payments.

• Employees must still receive the full annual salary entitlement, whether the extra payments are paid separately or included in monthly payroll.

As a result, employees in Spain generally receive the equivalent of 14 salary payments per year, either through two separate extraordinary payments or through a prorated arrangement included in their regular monthly salary.

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Types of leave available

Paid time off

Spanish employment laws state that employees are entitled to 30 calendar days of paid annual leave per year, which amounts to 22 business days. It's worth noting that some collective agreements may offer other specific entitlements to employees.

Sick leave

Employees in Spain who are unable to work due to illness or a non-work-related accident may be entitled to temporary disability benefits (Incapacidad Temporal). The amount paid depends on the duration of the absence and is calculated based on the employee's regulatory contribution base.

For common illnesses or non-work-related injuries, the following statutory rules generally apply:

• Days 1–3: No statutory sick pay is required, unless a collective bargaining agreement or company policy provides additional benefits.

• Days 4–15: Employees are entitled to receive 60% of their regulatory base, paid directly by the employer.

• Days 16–20: Employees continue to receive 60% of their regulatory base. Responsibility for the benefit transfers to the Social Security system (INSS) or the employee's mutual insurance provider, although payments are often processed through the employer's payroll.

• From day 21 onwards: Employees are entitled to receive 75% of their regulatory base, funded by Social Security or the relevant mutual insurance provider.

The maximum duration of temporary disability benefits is generally 365 days, with the possibility of an additional 180-day extension where recovery is still expected.

Since April 2023, medical sick leave certificates are transmitted electronically by healthcare providers directly to the Social Security authorities, meaning employees are no longer required to submit paper sick notes to their employer.

Special rules apply in certain circumstances. For example, employees who take leave for approved organ or tissue donation may be entitled to receive benefits equivalent to 100% of their regulatory base during the recovery period.

It is important to note that many collective bargaining agreements provide more favourable sick pay arrangements than the statutory minimums outlined above.

Parental leave

Spanish law provides an equal, non-transferable birth and childcare leave entitlement for each parent.

Maternity leave 

In Spain, mothers are entitled to 19 weeks of paid maternity leave, funded by the Spanish Social Security system (INSS) at 100% of the employee's regulatory base, subject to applicable contribution limits. The leave is individual and non-transferable. It consists of six mandatory weeks immediately following the birth, 11 flexible weeks that can be taken within the child's first 12 months, and two additional weeks that may be taken at any time until the child reaches eight years of age.

Additional leave may be granted in cases of multiple births, disability, or extended hospitalisation of the child. Single-parent families are entitled to 32 weeks of paid leave. Maternity benefits are paid directly by Social Security, meaning employers are not responsible for funding the leave period.

Paternity leave

Fathers in Spain are entitled to 19 weeks of paid paternity leave, funded by the Spanish Social Security system (INSS) at 100% of the employee's regulatory base, subject to applicable contribution limits. The entitlement is equal to maternity leave and is individual and non-transferable between parents.

The leave consists of six mandatory weeks immediately following the birth, 11 flexible weeks that can be taken within the child's first 12 months, and two additional weeks that may be taken before the child reaches eight years of age. Additional leave may apply in cases of multiple births, disability, or extended hospitalisation of the child. All paternity leave benefits are paid directly by Social Security.

Bereavement, moving, care and other leaves

Spanish employment law provides employees with a range of statutory leave entitlements in addition to annual leave, maternity leave, and paternity leave. Many of these rights were expanded under recent family leave reforms.

Carer's leave

Employees are entitled to five days of paid leave to care for a spouse, registered or cohabiting partner, close family member, or other person living in the same household who requires care due to a serious illness, accident, hospitalisation, or surgery requiring home recovery.

Emergency family leave

Employees may take up to four days of paid leave per year in cases of urgent and unforeseen family emergencies that require their immediate presence.

Bereavement leave

Employees are entitled to two days of paid leave following the death of a qualifying family member. This entitlement increases to four days where travel is required. The leave also applies to registered and cohabiting partners.

Marriage or registered partnership leave

Employees are entitled to 15 calendar days of paid leave upon marriage or the formal registration of a civil partnership.

Moving house leave

Employees are entitled to one day of paid leave when moving to a new primary residence.

Parental and family care leave

Employees may take an unpaid leave of absence (excedencia) to care for a child for up to three years following birth, adoption, or foster placement. Employees may also take up to two years of unpaid leave to care for a dependent family member. During this period, certain employment rights, including seniority protections, are maintained.

In addition, parents are entitled to two weeks of paid parental leave per parent, which may be taken at any time before the child reaches eight years of age. Single-parent families are entitled to four weeks. Employees also have the right to take up to eight weeks of unpaid parental leave before a child turns eight, which may be taken continuously or in separate periods.

Breastfeeding leave

Parents are entitled to one hour of paid leave per working day for breastfeeding or infant care until the child reaches nine months of age. This entitlement may be taken in various forms, subject to applicable workplace arrangements.

Flexible working arrangements

Employees with caregiving responsibilities have the right to request flexible working arrangements, including adjustments to working hours, schedules, and remote working arrangements, until their child reaches 12 years of age. Employers must consider such requests and respond in accordance with statutory requirements.

Public holidays

Spain observes a combination of national, regional, and local public holidays. The national holiday calendar is published annually by the Spanish Government, while each autonomous community and municipality may designate additional holidays. In total, employees are generally entitled to 14 paid public holidays per year, comprising national, regional, and local holidays.

The following national public holidays are recognised in Spain in 2026. Where a holiday falls on a Sunday, substitution rules may vary by autonomous community:

• 1 January – New Year's Day

• 6 January – Epiphany

• 3 April – Good Friday

• 1 May – Labour Day

• 15 August – Assumption of the Virgin

• 12 October – National Day of Spain (Hispanic Day)

• 1 November – All Saints' Day*

• 6 December – Constitution Day*

• 8 December – Immaculate Conception

• 25 December – Christmas Day

*Where these holidays fall on a Sunday, some autonomous communities may move the holiday to the following Monday.

In addition to these national holidays, autonomous communities and local authorities designate further public holidays, bringing the annual total to 14 paid public holidays in most parts of Spain.

It is important to note that Good Friday is a nationwide public holiday, while Easter Sunday is not. Maundy Thursday (Jueves Santo) is observed in most autonomous communities, although it is not a public holiday in Catalonia or the Valencian Community.

As public holiday calendars can vary by region and are updated annually, employers should always check the relevant regional holiday schedule when managing employee leave and payroll.

Attracting talent

The Spanish job market is highly competitive, making it crucial for companies to attract and retain top talent. This has led to what is known as the "talent war," where companies must employ various strategies to stand out from the competition. While offering competitive salaries is important, it's not the only way to attract and retain top candidates. 

Adding value to jobs is critical for companies to retain the best talent because employees want to feel that their work is meaningful and impactful. Companies that focus solely on compensation and benefits will struggle to attract and retain the best talent, as many employees seek out a sense of purpose and fulfilment from their work.

By adding value to jobs, companies can create a sense of ownership, autonomy, and mastery in their employees, which can lead to greater job satisfaction and engagement.

The role of benefits in recruiting and retaining employees

Just like Portuguese workers, Spanish employees also look for a solid benefits package. Especially when considering the top talent or a very disputed market. With that being said, the best way for businesses to stand out in this situation is offering a competitive benefits package. The new era of benefits impacting way more employees decisions are here to stay.

One of the best ways to stand out is by offering a globally competitive benefits package. Offering an attractive compensation package can be a determining factor in attracting top candidates and retaining the best talent. A comprehensive package may include:

• Meal Vouchers
• Public Transportation Allowances
• Supplementary Insurance and Pension
• Gym Membership
• Cash Bonus (performance or other)
• Learning Tuition

There's life besides work

Achieving work-life balance has become a prominent and sought-after benefit in today's workforce. The concept revolves around finding equilibrium between one's professional and personal life, allowing individuals to dedicate time and effort to both aspects without sacrificing personal or family commitments.

By prioritising work-life balance, organisations can significantly enhance the mental well-being, overall wellness, and productivity of their employees.

In addition to traditional financial incentives such as allowances, vouchers, insurances, and pensions, the modern workforce places a high value on "meaningful benefits" that address their everyday challenges.

Offering flexible working hours, promoting remote work opportunities, and granting ample personal time off are remarkable strategies to attract top-tier candidates and establish your company as an employer of choice.

Crafting a career path is crucial

Having well-designed career paths for employees is crucial for attracting and retaining talent within an organisation. A clear and structured career progression framework provides employees with a sense of direction and purpose, showcasing potential growth opportunities within the company. In this situations, leadership plays a major role in crafting customised career paths for employees. This action is very important when the goal is to retain the top talent that companies already have.

When candidates evaluate potential job opportunities, they are often looking for more than just a job; they seek long-term prospects and professional development. A well-defined career path not only demonstrates that the company values its employees' growth and success but also provides a roadmap for advancement and achievement.

This, in turn, attracts ambitious and driven individuals who are motivated to excel and contribute to the organisation's goals. 

Moreover, career paths contribute significantly to employee retention. When employees see a future within the company, with defined milestones and the opportunity to acquire new skills and take on challenging roles, they are more likely to remain committed and engaged.

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Termination of employment

The process of termination differs depending on the specific Employment Agreement and Collective Agreement in effect, and is contingent upon the type of contract and the grounds for termination.

Notice period

The notice period required to terminate an employment relationship in Spain depends on the circumstances of the termination, the employee's position, and any applicable collective bargaining agreement. While many employment contracts and collective agreements provide longer notice periods, the statutory minimum notice period for both employee resignations and objective dismissals is generally 15 calendar days.

For employee resignations, workers are typically required to provide 15 days' notice, unless a longer period is established by their employment contract or collective bargaining agreement. Similarly, employers carrying out an objective dismissal must generally provide 15 calendar days' notice and comply with the applicable legal requirements.

Key notice period rules include:

• Employee resignation: Generally requires 15 calendar days' notice, unless a longer period applies under a collective agreement or employment contract.

• Objective dismissal: Employers must generally provide 15 calendar days' notice and meet the statutory requirements for the dismissal.

• Collective agreements: Many collective bargaining agreements establish longer notice periods, often ranging from one month to three months depending on the employee's role and seniority.

• Senior executives: Notice periods are typically longer and may be up to three months or more, depending on the terms of the employment agreement.

• Collective redundancies (ERE): Employers must complete a consultation process with employee representatives before issuing the applicable notice of termination.

• Job search entitlement: Employees serving notice following an objective dismissal are generally entitled to six hours of paid leave per week to seek new employment.

As notice period requirements frequently vary by sector and collective agreement, employers should review the applicable employment contract and collective bargaining provisions before initiating a termination process.

Probation period

Probation periods in Spain must be agreed in writing and are subject to the limits established by the Spanish Workers' Statute and any applicable collective bargaining agreement. The maximum permitted probation period varies depending on the employee's role, qualifications, and the type of employment contract.

The statutory probation periods generally include:

• Qualified technical staff (técnicos titulados): Up to six months.

• Other employees: Up to two months.

• Companies with fewer than 25 employees: Up to three months for non-technical employees.

• Temporary contracts of six months or less: Maximum one month, unless a collective bargaining agreement provides otherwise.

A probation period cannot be imposed where an employee has previously performed the same duties for the employer under an earlier employment contract. During the probation period, either party may generally terminate the employment relationship without notice or severance pay, provided the termination does not violate anti-discrimination laws or other employee protections.

Key points include:

• Probation periods must be agreed in writing and included in the employment contract.

• Previous service matters: A probation period is not permitted if the employee has already carried out the same role for the employer.

• Termination during probation: Employment may generally be ended without notice or severance.

• Anti-discrimination protections apply: A probationary dismissal may still be challenged if it is discriminatory or infringes protected employee rights.

• Collective agreements may modify probation periods within the limits permitted by law.

Employers should ensure that probation periods comply with both statutory requirements and any applicable collective bargaining agreement before including them in an employment contract.

Severance

The process and compensation associated with termination of employment in Spain depend on the reason for dismissal, the employee's contract type, and the applicable legal procedures. Severance pay is not limited to cases where an employer terminates employment without notice; rather, entitlement depends on the nature of the dismissal.

Objective dismissal

An employer may carry out an objective dismissal for economic, technical, organisational, production-related, or other legally recognised reasons. In these cases, the employer must generally provide 15 calendar days' notice and pay statutory severance equivalent to:

• 20 days' salary per year of service

• Maximum compensation of 12 months' salary

Disciplinary dismissal

A disciplinary dismissal may occur where an employee commits a serious or repeated breach of their contractual obligations. No statutory notice period or severance payment is required if the dismissal is upheld as valid. 

Unfair dismissal

If a court determines that a dismissal is unfair (despido improcedente), the employee may be entitled to compensation based on their length of service.

Compensation is generally calculated as:

• 33 days' salary per year of service for employment accrued from 12 February 2012 onwards.

• 45 days' salary per year of service for employment accrued before 12 February 2012.

The total compensation is generally capped at 720 days' salary, although transitional rules may allow a higher amount in certain cases, up to a maximum of 42 months' salary.

Following a finding of unfair dismissal, the employer will generally choose whether to reinstate the employee or pay compensation, except in specific cases involving employee representatives where different rules apply.

Collective redundancy (ERE)

Where an employer conducts a collective redundancy process (Expediente de Regulación de Empleo – ERE), a consultation process with employee representatives must be completed before dismissals can take effect.

Employees affected by an ERE are generally entitled to:

• 20 days' salary per year of service

• Maximum compensation of 12 months' salary

Fixed-term contract expiry

When a qualifying fixed-term contract ends, employees are generally entitled to compensation equivalent to:

• 12 days' salary per year of service

Employees working under fixed-term contracts of more than one year are typically entitled to 15 days' notice before the contract ends.

Resignation

Employees who resign from their position are generally required to provide notice in accordance with their employment contract or applicable collective bargaining agreement, commonly 15 calendar days. No severance payment is payable on resignation.

Important considerations

• Objective dismissals generally require 15 calendar days' notice and severance of 20 days' salary per year of service.
• Disciplinary dismissals do not normally require notice or severance if lawfully justified.
• Unfair dismissals may result in compensation of 33 or 45 days' salary per year of service, depending on the period of employment.
• Collective redundancies are subject to additional consultation requirements.
• Collective bargaining agreements may provide more favourable rights than the statutory minimums.

What are my options for hiring?

Looking to expand your business to Spain? Airswift can offer assistance in complying with local government regulations for employment, legal advice, labour law, taxes, workplace safety, permits, and other related issues.

With our expertise, we can help protect your business from unnecessary risks, allowing you to focus on your company's demands, prospects, and international expansion.

We have extensive knowledge and experience in Spain, enabling us to assist our clients with HR-related matters in a cost-effective and compliant manner. 

Talent acquisition

Airswift can provide expert assistance to help your business find and hire top talent in Spain. Our vast industry knowledge and experience allow us to quickly and efficiently locate the best candidates for your organisation.

Whether you need help with short-term project staffing or permanent recruitment, we have solutions that fit your needs.

Our local talent acquisition consultants can work with your company to identify the ideal candidates that align with your company culture. We also have a comprehensive database of highly qualified contractors for flexible employment options. Trust Airswift to help you build a strong and dynamic workforce in Spain.

Employer of record

If your business is interested in hiring Spanish workers but doesn't want to set up a local entity, Airswift can assist you as an Employer of Record (EoR). This means that we can help you find and hire the right people for your company, without the need for a physical office.

By working with a third-party EOR like Airswift, you can focus on running your business while we take care of administrative responsibilities such as payroll, tax management, employee benefits, and onboarding. Our EOR services allow you to comply with local laws and regulations, without the need for a full-time HR department.

*Although the information provided has been produced from sources believed to be reliable, no warranty, express or implied, is made regarding the accuracy, adequacy, completeness, legality or reliability of any information. For the latest information and specific queries regarding particular cases, please contact our team.