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Minimum wage in Spain
Payroll in Spain
Statutory benefits in Spain
Other employee benefits in Spain
Compliant, seamless payroll and benefits in Spain and beyond
Payroll and benefits in Spain
As in all countries, payroll in Spain is subject to certain rules and regulations. If you want to hire workers in Spain, you’ll need to understand the process of setting up payroll, paying your employees and withholding and paying the right taxes and contributions. You’ll also need an understanding of the Spanish minimum wage, and the minimum benefits Spanish employees are entitled to by law, so you can ensure your operations are compliant.
Of course, you can avoid the hassle of navigating complex payroll rules by outsourcing your payroll to an international payroll provider in Spain, like CXC. When you use CXC’s global payroll services, we’ll handle tax withholding, payroll records, payments, benefits, and bonuses on your behalf. Because our team are experts in international employment regulations, they’ll ensure your payroll in Spain is compliant with the law.
Minimum wage in Spain
In Spain, all employees are entitled to receive at least the minimum wage for their work. The Spanish minimum wage was first introduced in 1963 and is reviewed each year by the Council of Ministers (Consejo de Ministros).
Minimum hourly wage in Spain in 2024
The minimum hourly wage in Spain in 2024 is EUR 8.87, and the annual minimum wage is EUR 15,876. Employers in Spain can choose to pay their employees’ wages in either 12 or 14 instalments. That means the minimum wage per month is either EUR 1,323 or EUR 1,134 depending on which one they opt for. If you choose to pay your employees 14 salary instalments instead of 12, you have to pay them a double salary in July and December.
Minimum wage in Spain after tax
The minimum wage is the legal minimum that an employee can be paid before tax. In Spain, tax rates are broken down into six brackets and generally range from 19% to 47%, though this varies by region.
What counts towards minimum wage in Spain?
In Spain, employees can be paid either in cash or in-kind (i.e. with non-monetary benefits). However, they must receive at least the minimum wage as a monetary payment. Overtime, profit shares, and bonuses also don’t count towards the minimum salary.
Minimum wage in Spain for part-time workers
The minimum annual salary in Spain is EUR 15,876. However, this only applies to full-time workers. Employers should calculate the minimum wage for part-time workers using the hourly minimum wage, which is EUR 8.87.
Minimum wage for apprentices, interns, and trainees in Spain
Employees who are hired on special training contracts like those for apprentices, interns, or trainees also have to receive at least the hourly minimum wage in Spain. Their salaries should be based on the actual hours they work. However, they can’t be less than 60% of the full-time minimum wage in the first year and 75% of the full-time minimum wage in the second year.
Minimum holiday entitlement in Spain
In addition to the minimum wage, employees in Spain are entitled to a minimum holiday allowance of 30 calendar days or 22 business days for full-time employees. This applies to full-time and part-time employees, as well as interns, apprentices, and trainees. Employers in Spain can’t pay out employees’ holiday instead of giving them time off work unless they are leaving the company.
Payroll in Spain
In Spain, payroll is monthly, and employers usually pay employees at the end of the month. Businesses that hire employees in Spain need to be aware of the various tax deductions, labour laws, and regional variations that make up payroll in Spain.
Setting up payroll in Spain
Companies that want to pay employees in Spain first need to register with the Spanish Tax Agency (Agencia Estatal de la Administración Tributaria). After you’ve registered your business, you’ll receive a tax identification number, which allows you to pay taxes and social security contributions for your employees.
Running payroll in Spain
Payroll in Spain is subject to certain rules, requirements and norms, which employers should be aware of. First, employers must provide their employees with a payslip each payday, which can be either paper or digital. The payslip must include:
- The total gross pay
- Social security and tax deductions
- The employee’s personal information
- Information about the employer
Employers in Spain are required to keep payroll records for a minimum of four years.
Overtime in Spain
Employees in Spain who work more than 40 hours a week are entitled to overtime pay, which is often subject to specific rates and conditions set by collective labour agreements. Also, employees can’t work more than 80 additional hours per year according to Spanish labour law.
13th and 14th salaries in Spain
It’s common practice in Spain to pay employees in 14 instalments each year instead of 12. This means that employees effectively receive an extra salary payment twice a year, in July and December. The exact conditions of the 13th and 14th salary may be stipulated in a collective agreement or the employee’s employment contract. These additional payments are taxable as normal income in Spain.
Payroll taxes in Spain
In Spain, payroll taxes are withheld directly from each employee’s wages. Employers must then pay the appropriate amount, plus their own contributions, to the tax authorities.
Employee and employer payroll taxes include:
- Income tax: Income tax is calculated on a progressive scale, with tax rates ranging from 19% to 45% for high earners. These rates include both a national tax and a regional tax, so they vary slightly from one Spanish region to another.
- Social security contributions: In Spain, social security acts as a safety net for all employees, providing them with support in times of need. It’s paid for by contributions from both employers and employees.
- Unemployment contribution: Employers and employees both contribute to an unemployment fund, which is designed to provide support for people who are out of work. The employer contribution is 5.5% of each employee’s gross salary, while the employer contribution is 1.55%.
- Salary Guarantee Fund: The Salary Guarantee Fund is meant to protect employees in the case that their employer goes out of business. Employers contribute to this fund at a rate of 0.2%.
- Vocational training contribution: Both employers and employees in Spain also pay a vocational training contribution, which is used to fund training initiatives. This system was designed as a way of investing in the workforce and helping Spanish employees to develop their skills.
Statutory benefits in Spain
Each country grants employees the right to certain statutory benefits, which are their minimum entitlements according to local labour law. In Spain, these fundamental rights include social security benefits which are paid for by employer and employee contributions, as well as a certain amount of paid leave.
What is social security in Spain?
Most people living in Spain are covered by a robust social security system. This is meant to provide a safety net for Spanish residents in times of hardship. For example, unemployment insurance in Spain allows employees to receive an income if they lose their job, and invalidity benefits mean employees can still get paid if they develop a disability. Social security benefits in Spain are not directly paid for by employers but financed through contributions from both employers and employees. They pay for things like:
- Healthcare
- Sickness and maternity
- Unemployment
- Work-related illness or injuries
- Retirement and pensions
- Invalidity and death
Leaves and time off in Spain
Employees in Spain are entitled to various types of leave, including:
- Annual leave: All employees must get at least 30 calendar days (22 working days) of paid holiday each year. This can be split into several periods throughout the year. Employees are also entitled to paid leave on public holidays.
- Maternity and paternity leave: Employees in Spain are entitled to 16 weeks’ maternity leave beginning when they or their partner gives birth, or when they adopt or long-term foster a child. Both parents are entitled to this leave, which is paid at 100% of the employee’s normal salary by the social security system.
- Other leaves: Spanish employees are also entitled to special leave in various other circumstances, such as when they get married, move house, or are called to jury duty. There are specific limits and rules that apply to each type of leave.
Statutory sick pay in Spain
Employees in Spain are entitled to paid sick leave from their fourth day of absence from work. The employer is responsible for paying this until the 15th day, when payments can be charged to the social security office. Some employers in Spain choose to top up their employees’ social security payments so they receive the equivalent of their normal salary.
Pensions and retirement in Spain
In Spain, pensions are paid for through the social security system. Retirees are entitled to the state pension if they have paid social security contributions for at least 15 years, and at least two of those years were within the 15 years before the pension claim.
The full state pension rate is around 80% of the employee’s final gross salary, making it one of the highest rates in the world. Some employers choose to provide their employees with a supplementary pension plan, though this is not a legal requirement.
Other employee benefits in Spain
Employers in Spain can choose to offer their employees additional benefits. While these aren’t required by law, offering a good benefits package can help you to attract and retain Spanish talent. There are also tax deductions for certain benefits. For example, common employee benefits in Spain include meal vouchers and childcare vouchers, both of which carry a tax advantage.
Additional paid time off
Although the Spanish system already grants employees fairly generous leave, some employers choose to offer their employees additional time off as part of their benefits package. This can be a valuable way of attracting and retaining talent.
Life insurance
It’s fairly common in Spain for employers to offer life insurance as an employee benefit. In the event of an employee’s death, their family will receive a lump sum to help them with the financial impact of the employee’s death.
Company car
Some employers provide their employees with a company car, which they can use for work-related journeys. They may or may not be able to use the car for personal journeys. Also, whether or not the car is used for professional purposes only can have an impact on how this benefit is taxed.
Pension plans
Employers are not obligated to provide a pension plan in Spain but can choose to do so. If they do, employers and employees will both make contributions to the pension. When the employee retires, they’ll be able to claim an income from this private pension in addition to their state pension entitlement.
Private health insurance
Employees in Spain are covered by a robust public healthcare system, which means that private health insurance is not necessarily needed. However, many employers choose to provide this as an additional employee benefit in Spain. Private health insurance can help employees to access healthcare more quickly and potentially get higher quality treatment.
Mileage reimbursement
Some employers in Spain choose to reimburse employees if they use a personal vehicle for journeys related to work. This helps them both cover the cost of fuel and contribute towards the upkeep of their vehicle. The Spanish government sets a maximum rate that employers can pay for this. In 2024, the mileage reimbursement rate is EUR 0.26 per km.
How are employee benefits taxed in Spain?
How employee benefits are taxed in Spain depends on the type of benefit. For example, the following are exempt from taxation:
- Company shares up to a maximum of EUR 12,000
- Company cars, as long as they are only used for business purposes
- Meal vouchers up to a limit of EUR 11 per day
- Childcare vouchers and public transport vouchers
- Reimbursements for the cost of relocating for work
How employee benefits are taxed can make a big difference to the total amount they cost your business. That means it’s important to check what rules apply before you decide on the employee benefits you want to offer to your employees in Spain.
Compliant, seamless payroll and benefits in Spain and beyond
Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.
Thankfully, we know what we’re doing. When you work with CXC to engage workers in Spain, we’ll handle everything from tax withholding to employee bonuses on your behalf.
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