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Employer of Record in Spain
Hire employees in Spain through an Employer of Record (EOR) without setting up a local entity. This comprehensive guide explains Spain's labour laws, payroll, taxes, benefits, and compliance requirements so you can build a compliant Spain workforce with confidence.
What is an Employer of Record in Spain?
An Employer of Record in Spain is a third-party organisation that legally employs workers on behalf of foreign companies. The EOR takes full legal responsibility for the employment relationship under Spanish law, while the client company directs the employee's daily work and performance.
This arrangement allows international businesses to hire Spain professionals quickly and compliantly without establishing a local entity. It is particularly useful for startups, growing businesses, and enterprises exploring the Spain market for the first time. The EOR manages all employment obligations, including contracts, payroll, tax filings, social contributions, benefits, and ongoing compliance with local labour laws.
Why Hire in Spain?
Spain offers an unbeatable combination of EU/Eurozone access, deep Spanish-speaking talent pool (servicing Latin America), strong technical universities, lower costs than Northern Europe, and exceptional quality of life that attracts global talent.
Madrid and Barcelona are major tech and financial hubs hosting Glovo, Cabify, ID Finance, and Letgo as well as Microsoft, Google, AWS, Telefonica Tech, and Indra. Valencia, Malaga, and Seville are emerging as cost-effective alternatives. Spain attracts massive shared-service investment from multinationals serving EMEA and LatAm.
The 2022 Startup Law and 2023 Beckham Law reform offer significant tax advantages for digital nomads and qualifying expats: 24% flat tax on up to EUR 600,000 for 6 years. The 2026 SMI increase to EUR 1,221 (in 14 payments) and the proposed 37.5-hour workweek reform reflect Spain's continued labour-market modernisation.
What Are the Quick Facts About Spain?
Before hiring in Spain, it helps to understand the basic country profile at a glance.
| Category | Details |
|---|---|
| Capital | Madrid |
| Official Language | Spanish (Castilian, official); Catalan, Galician, Basque, Valencian co-official in respective autonomous communities; English widely used in business, IT, and tourism |
| Currency | Euro (EUR) - Spain adopted the euro in 1999/2002 |
| Time Zone | Central European Time (UTC+1; UTC+2 in summer); Canary Islands UTC+0/UTC+1 |
| Population | Approximately 48.6 million |
| Status | EU member state (since 1986), Eurozone member, Schengen Area member, NATO member, OECD member; constitutional monarchy with 17 autonomous communities |
| Major Industries | Tourism, automotive (SEAT, Renault, Stellantis, Mercedes-Benz Vitoria), banking and finance (Santander, BBVA, CaixaBank), telecoms (Telefonica), renewable energy (Iberdrola, Acciona), pharmaceuticals, food and beverages, fashion (Inditex/Zara, Mango), aerospace (Airbus, Indra) |
| Workforce Profile | Highly educated; multilingual (Spanish/English/regional languages); strong STEM, design, and creative talent; cost-competitive vs Northern Europe; major shared-service hubs in Madrid and Barcelona; growing tech ecosystem |
What Are the Employment Laws in Spain?
Employment relationships in Spain are primarily governed by the Workers' Statute (Estatuto de los Trabajadores - Real Decreto Legislativo 2/2015), General Social Security Law (LGSS), Personal Income Tax Law (Ley 35/2006 IRPF), Royal Decree 126/2026 setting the SMI, and sectoral collective bargaining agreements (convenios colectivos). This legislation regulates every aspect of the employment relationship, including contracts, working hours, leave entitlements, termination procedures, and workplace rights.
Written employment contracts are mandatory in Spain and must be drafted in Spanish (official; regional co-official languages permitted in respective autonomous communities; bilingual contracts common). Every contract must specify the job description, salary, working hours, probation period, benefits, and termination terms. Both fixed-term and indefinite-term contracts are permitted under Spain's law. Fixed-term contracts cannot exceed Maximum 6 months for production circumstances (extendable to 12); structural use of fixed-term contracts is restricted under the 2022 labour reform; presumption of indefinite hiring after misuse, including any renewals.
The standard probation period for most roles is capped at 6 months for qualified technicians; 2 months for other employees in companies of fewer than 25 employees; 3 months for others; up to 1 year for senior managers. During probation, either the employer or the employee may terminate the relationship with shortened notice as specified by law or the employment contract.
What Are the Working Hours and Overtime Rules in Spain?
The standard workweek in Spain is 40 hours per week (2026 reform proposes 37.5 hours but not yet enacted); typically 8 hours/day, 5 days/week. The maximum weekly working time, including overtime, is 40 hours plus 80 hours of overtime per year maximum; absolute weekly cap including overtime is 48 hours averaged over 4 months. Rest periods and overtime premiums are also regulated by law.
| Factor | Standard |
|---|---|
| Standard Workweek | 40 hours per week (2026 reform proposes 37.5 hours but not yet enacted); typically 8 hours/day, 5 days/week |
| Maximum Weekly Hours | 40 hours plus 80 hours of overtime per year maximum; absolute weekly cap including overtime is 48 hours averaged over 4 months |
| Weekday Overtime Pay | Compensated at the rate set by the applicable convenio colectivo (no statutory premium, but minimum equal to ordinary hourly rate); often paid as time off in lieu within 4 months |
| Weekend/Holiday Overtime | Premium rates set by sectoral CBA; typically +75% to +100% for Sunday and public holidays |
| Night Work Premium | +25% premium for night work (22:00-06:00) under Article 36 of the Workers' Statute, unless otherwise set by CBA |
| Minimum Daily Rest | At least 12 consecutive hours between shifts |
| Minimum Weekly Rest | At least 1.5 consecutive days (typically Saturday afternoon and Sunday); can be accumulated up to 14 days |
What Leave Entitlements Apply in Spain?
Spain employees enjoy comprehensive leave entitlements, including annual leave, public holidays, sick leave, maternity leave, and paternity leave.
| Leave Type | Entitlement |
|---|---|
| Annual Leave | Minimum 30 calendar days (22 working days) per year of service; pro-rata for partial years; cannot be replaced with cash compensation except on termination |
| Public Holidays | 14 public holidays per year (including national, regional, and local) |
| Sick Leave (Short-term) | From day 1 to 3, unpaid (unless CBA otherwise); from day 4 to 15, employer pays at 60% of the contribution base; from day 16 to 20, employer pays at 60% with right to reimbursement from Social Security |
| Sick Leave (Long-term) | From day 21 onwards, Social Security (INSS) pays at 75% of the regulatory base; cumulative entitlement up to 365 days extendable to 545; CBAs frequently top up to 100% |
| Maternity Leave | 16 weeks of paid maternity leave (6 weeks mandatory immediately post-birth; remaining 10 weeks flexible up to age 12 months); paid at 100% of regulatory base by Social Security |
| Maternity Pay | 100% of the regulatory base paid by Social Security (INSS) - no employer cost; capped at the maximum contribution base (EUR 5,101.20/month in 2026) |
| Paternity Leave | 16 weeks of paid paternity leave (equal to maternity, since 2021); 6 weeks mandatory immediately post-birth; remaining 10 weeks flexible up to age 12 months; paid at 100% by Social Security |
Public Holidays Observed: New Year's Day (1 January), Epiphany (6 January), Good Friday, Labour Day (1 May), Assumption (15 August), Spain National Day / Hispanic Day (12 October), All Saints' Day (1 November), Constitution Day (6 December), Immaculate Conception (8 December), Christmas Day (25 December), plus regional holidays (e.g., St George 23 April in Catalonia, San Juan 24 June in Catalonia, San Fermin 7 July in Navarre) and 2 local municipal holidays.
What Is the Minimum Wage and Average Salary in Spain?
Spain's statutory minimum wage (SMI) for 2026 is EUR 1,221 gross/month paid in 14 instalments (twelve monthly + two extra payments in July and December), totalling EUR 17,094 annually - a 3.1% increase over 2025. The 2026 SMI is exempt from IRPF income tax for affected workers, though Social Security contributions still apply normally. The increase has retroactive effect from 1 January 2026 under Royal Decree 126/2026 of 18 February 2026. Domestic workers paid hourly receive a minimum of EUR 9.55/hour. Sectoral CBAs frequently set higher floors. Note: figures are indicative; an EOR confirms the applicable convenio colectivo, Social Security registration, and IRPF withholding before contracting.
| Salary Category | Monthly Amount (EUR) | Approx. USD |
|---|---|---|
| Customer Support / BPO | EUR 1,300 - EUR 1,900 | Strong shared-service hubs; multilingual support |
| Junior Developer | EUR 2,200 - EUR 3,500 | Growing tech ecosystem; Madrid, Barcelona, Valencia |
| Mid-Level Software Engineer | EUR 3,500 - EUR 5,500 | EU/US outsourcing; major fintech and SaaS scene |
| Senior Engineer / Architect | EUR 5,500 - EUR 8,500+ | Senior tech roles in fintech, telecom, gaming |
| Marketing / Brand Manager | EUR 3,000 - EUR 5,500 | Strong creative and design talent |
| Senior Banker / Risk Manager | EUR 5,000 - EUR 9,000 | Major banks: Santander, BBVA, CaixaBank |
| Country Manager / Director | EUR 9,000 - EUR 20,000+ | Multinational subsidiaries |
by bank transfer in euros (EUR) into a Spanish or SEPA-compliant account on a monthly cycle, typically by the last working day of the month, with extra payments in July and December The Spanish payroll structure typically includes 14 payments per year - 12 monthly salaries plus 2 extra payments (pagas extraordinarias) in July and December, often equal to one month's salary each. Profit-sharing, performance bonuses, restaurant vouchers (cheques restaurante), and transport allowances are common and partially tax-favoured.
How Do Taxes and Social Contributions Work in Spain?
Spain requires both employers and employees to contribute to social security, and personal income tax is withheld at source by the employer.
Employee Income Tax
| Monthly / Annual Income | Tax Rate |
|---|---|
| Up to EUR 12,450 | 19% (state + regional combined) |
| EUR 12,450 - EUR 20,200 | 24% |
| EUR 20,200 - EUR 35,200 | 30% |
| EUR 35,200 - EUR 60,000 | 37% |
| EUR 60,000 - EUR 300,000 | 45% |
| Above EUR 300,000 | 47% (state); regional rates may differ - up to ~50% in Catalonia, Valencia |
| Beckham Law (qualifying expats) | 24% flat up to EUR 600,000 for first 6 years |
Social Security and Health Contributions
| Contribution Type | Employer | Employee | Total |
|---|---|---|---|
| Common Contingencies | 23.6% | 4.7% | Pension, sickness, maternity |
| Unemployment Insurance | 5.5% | 1.55% | Subject to contract type adjustment |
| Professional Training | 0.6% | 0.1% | FOREM training fund |
| FOGASA (Wage Guarantee) | 0.2% | - | Employer-only; protects wages on insolvency |
| MEI (Intergenerational) | 0.67% | 0.13% | Pension reserve fund; rises annually |
| Occupational Accident | 1-6% | - | Sector-rated; office work ~1.5% |
| Solidarity contribution | Above max base | Above max base | 1.15-1.46% on excess over EUR 5,101.20 |
| Total Burden | ~30.65% | ~6.5% + IRPF | Plus 19-47% progressive PIT |
Note: Contributions are calculated on gross salary up to a statutory ceiling where applicable. Rates are reviewed periodically.
What Are the Mandatory Employee Benefits in Spain?
All employees in Spain are entitled to statutory benefits under the labour code, and many employers add supplementary benefits to attract top talent.
| Mandatory Benefits | Common Supplementary Benefits |
|---|---|
| Paid annual leave | Private health insurance |
| Paid public holidays | Meal vouchers or allowance |
| Paid sick leave | Transportation allowance |
| Maternity and paternity leave | Performance bonuses |
| Social security coverage | Professional development budget |
| Health insurance | Flexible or remote work options |
| Pension contributions | 13th-month salary (some sectors) |
| Workplace safety protection | Stock options or equity |
How Do Termination and Severance Work in Spain?
Termination rules in Spain depend on the employee's tenure. The labour code strictly defines notice periods and severance pay.
Notice Periods by Tenure
| Length of Service | Notice Period |
|---|---|
| Probation period | No notice required (immediate) |
| Indefinite contract (objective dismissal) | 15 days' written notice |
| Disciplinary dismissal | No notice required (immediate) |
| Resignation | 15 days under most CBAs |
| Senior management | 3 months (set by Royal Decree 1382/1985) |
Severance Pay
| Years of Service | Severance Entitlement |
|---|---|
| Unfair dismissal (despido improcedente) | 33 days' salary per year of service (capped at 24 months); contracts before 12 Feb 2012 retain 45 days/year up to 42 months |
| Objective dismissal (despido objetivo) | 20 days' salary per year of service (capped at 12 months); for redundancy, technical, organisational, production, or capability reasons |
| Disciplinary dismissal (justified) | No severance |
| Mass redundancy (ERE) | Same as objective + collective consultation period (15-30 days) |
| End of fixed-term contract | 12 days' salary per year worked |
Legal Grounds for Termination
Employment in Spain can be terminated by mutual agreement, voluntary resignation, the natural expiration of a fixed-term contract, just cause due to serious misconduct, or economic and organisational reasons, with proper notice.
Protected Categories
Spain labour law offers special protection against termination for pregnant employees, employees on maternity or paternity leave, employees on sick leave, and trade union representatives.
What Are the Work Permit and Visa Requirements in Spain?
As an EU/Schengen member, Spain allows free movement and employment for EU/EEA/Swiss citizens (registration in the Foreigners' Register required beyond 90 days). Non-EU nationals require an initial residence and work permit (Permiso de Trabajo y Residencia), subject to a labour-market test under the Catalogue of Difficult-to-Fill Occupations. The EU Blue Card and Highly-Qualified Professional Permit (via UGE) offer expedited routes for qualifying skilled workers. Spain's Digital Nomad Visa (under the Startup Law) allows non-EU remote workers earning over EUR 2,646/month to live in Spain.
| Permit Type | Purpose | Issuing Authority |
|---|---|---|
| Initial Residence and Work Permit | First-time work authorisation (Permiso de Trabajo y Residencia) | Ministerio de Inclusion, Seguridad Social y Migraciones |
| EU Blue Card | Highly-qualified workers (salary 1.5x average) | Foreign Office (Extranjeria) |
| Highly-Qualified Professional Permit | Salary >EUR 40,000-87,000+ depending on age | Unidad de Grandes Empresas (UGE) |
| Intra-Company Transfer (ICT) | Multinational transferees | UGE / Foreign Office |
| Spain Digital Nomad Visa | Remote workers earning >EUR 2,646/month | Spanish consulates / UGE |
| Self-Employment Permit | For freelancers and entrepreneurs | Foreign Office / Provincial offices |
Processing typically takes between 30 and 60 days for highly-qualified routes via UGE; 90 days+ for general work permits; longer in peak periods, depending on documentation and administrative workload. Spain is a full EU and Eurozone member, in the Schengen Area, and applies the EU posted-workers directive. EU/EEA/Swiss citizens work without a permit but must register in the Foreigners' Register beyond 90 days. Non-EU nationals require a permit. The 2026 SMI rose 3.1% to EUR 1,221/month (in 14 payments). Spain's Beckham Law offers a 24% flat tax on up to EUR 600,000 for qualifying expats during their first 6 years of residency.
How Do You Hire in Spain Through an EOR?
The hiring process through an Employer of Record typically follows five clear stages, from candidate selection to ongoing compliance management.
| Step | Action | Responsibility |
|---|---|---|
| 1 | Identify and select the Spain candidate | Client company |
| 2 | Engage an EOR and sign a service agreement | Client + EOR |
| 3 | Issue a written Spanish (official; regional co-official languages permitted in respective autonomous communities; bilingual contracts common)-language contract | EOR (legal employer) |
| 4 | Register the employee with tax and social security | EOR |
| 5 | Process monthly payroll and maintain compliance | EOR |
Should You Set Up a Local Entity in Spain Instead?
For companies with significant long-term investment plans in Spain, establishing a local entity may be a viable alternative to using an EOR.
| Entity Type | Description | Best For |
|---|---|---|
| Sociedad Limitada (S.L.) | Limited liability company; minimum capital EUR 1 (post-2022 reform) | Most foreign investors and SMEs |
| Sociedad Anonima (S.A.) | Joint-stock company; minimum capital EUR 60,000 | Larger enterprises and listed firms |
| Branch Office (Sucursal) | Extension of foreign parent | Operational presence without separate legal entity |
| Representative Office | Non-commercial liaison only | Market research and promotional activity |
| Cooperativa | Cooperative society | Worker or service cooperatives |
Setting up an S.L. takes about 6-10 weeks via the CIRCE one-stop-shop or notarial process. Minimum capital is now EUR 1 (since 2022 Startup Law). Companies must register with the Mercantile Registry, Tax Authority (AEAT), Social Security Treasury (TGSS), and obtain a CIF tax number. For fewer than 10 employees and short-term presence, an EOR is faster, simpler, and avoids the complexity of CBA negotiation.
EOR vs Local Entity vs Contractor — Which Is Right for You?
Comparing the three main hiring models helps you choose the right approach for your Spain workforce.
| Factor | Employer of Record | Own Legal Entity | Freelancer / Contractor |
|---|---|---|---|
| Setup Time | 5-10 business days for EU/EEA candidates; 30-60 days for non-EU candidates requiring a work permit | Several weeks to months | Immediate |
| Setup Cost | Low | High | Very low |
| Compliance | Handled by EOR | Your responsibility | Misclassification risk |
| Statutory Benefits | Fully provided | Must manage yourself | Typically none |
| Control Over Staff | High | Full | Limited |
| IP Protection | Strong | Strong | Often weak |
| Best For | Small to medium teams | Long-term major presence | Short-term specialists |
What Common Hiring Mistakes Should You Avoid in Spain?
Companies new to hiring in Spain often encounter several common pitfalls. Misclassifying employees as independent contractors is a significant risk, as Spain has clear legal distinctions between the two, and reclassification can lead to penalties and back payments.
Failing to issue written employment contracts in Spanish (official; regional co-official languages permitted in respective autonomous communities; bilingual contracts common) is another frequent error, as verbal or foreign-language agreements may not be legally enforceable. Ignoring collective bargaining agreements in regulated sectors can lead to compliance issues, as can miscalculating social security contributions since rates and ceilings are periodically updated.
Skipping proper documentation of probation periods can inadvertently extend employee protections beyond what the employer intended. Finally, providing inadequate notice of termination or failing to follow proper dismissal procedures can expose companies to compensation claims and legal disputes.
Which Industries Are Hiring Most in Spain?
Several key industries drive Spain's labour market, each offering a distinct talent pool for international employers.
| Industry | Key Roles | Talent Highlights |
|---|---|---|
| Tourism & Hospitality | Hotel staff, restaurant managers, tour operators | World's 2nd largest tourism economy |
| Automotive | Engineers, production, supply chain | SEAT, Stellantis, Renault, Ford, Mercedes plants |
| Banking & Finance | Bankers, compliance, fintech | Santander, BBVA, CaixaBank major employers |
| ICT & Software | Developers, DevOps, AI/ML | Madrid and Barcelona tech hubs growing fast |
| Telecoms | Engineers, network operations | Telefonica, Orange, Vodafone Spain |
| Renewable Energy | Engineers, project managers | Iberdrola, Acciona, Naturgy global leaders |
| Fashion & Retail | Designers, buyers, store managers | Inditex (Zara), Mango, Desigual |
Are you an Employer of Record (EOR) provider looking to expand your reach in Spain?
We help EOR companies increase their visibility and generate real business opportunities by featuring them on our platform through:
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Our audience includes businesses, startups, and HR professionals actively exploring hiring solutions in Spain and Southwestern Europe / Iberian Peninsula — giving your brand direct access to decision-makers ready to expand their teams.
By partnering with us, you can:
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Spain is becoming an attractive destination for global hiring — making it a strong opportunity for EOR providers.
Disclaimer
This guide is provided for educational and informational purposes only. Spain's labour laws, tax rates, and social contribution percentages are subject to change. Always consult a qualified Employer of Record provider, local legal counsel, or certified tax advisor before making hiring or employment decisions in Spain.
Spain
Hiring in Spain requires a clear understanding of local labour laws, payroll obligations, and statutory benefits. Our country-specific guide for Spain helps employers navigate salary expectations, collective bargaining agreements (convenios colectivos), Seguridad Social contributions, working hours, leave entitlements, and termination rules under the Spanish Workers' Statute (Estatuto de los Trabajadores).
Whether you're recruiting healthcare professionals in Madrid, hospitality and tourism staff in Barcelona and the Balearic Islands, or manufacturing and construction workers across Valencia, Seville, Zaragoza, Málaga, and Bilbao, AtoZ Serwis Plus ensures every hire is fully compliant with Spanish regulations.
From employment contracts and work permits to onboarding and ongoing HR support, we help you make data-driven hiring decisions and avoid costly compliance mistakes — so you can build a reliable, locally compliant workforce across all 17 autonomous communities of Spain.
