Monday, 25th May 2020
LEGAL Article

This Month's Magazine
Employment in Spain

Employment in Spain

Some legal advice on the tricky laws governing employing staff in Spain.

As an EU citizen, you can work or start a business in Spain under the same conditions as Spanish citizens.

As far as being an employer in Spain is concerned, there are two alternatives. Firstly, workers can be employed by the company you have formed, however the cost of doing so may be high, especially if your business is just starting or if you need the employees for a limited time.

If you do not plan on having a physical business in Spain, then you should consider using the service of your lawyer to register your foreign business with the social security office.

The other alternative is to have the prospective employee set up as a self-employed worker (autó-nomo).

Employed workers require a work permit called ‘cuenta ajena’, which means “on another person’s account”, while the self employed need a permit, called ‘autonomo’, “on own account”. Self employed persons have to pay their own social security, tax and business license.

When employing other persons, you have to register them into the social security system and pay them at least the minimum wage. The law also stipulates a 40-hour working week, 30 days holidays and 14 days bank holidays per year (these are national, state, and local holidays).

The ruling system with regards to contracts of employment and conditions is rather complex because each type of business  is subject to different agreements made with Unions relating to the specific type of work within that activity (time off, extra payments, etc.).
Employees are extremely well protected in Spain, so, before employing somebody, do get the appropriate legal advice as you could get fined and/or easily taken to court by a former employee.

Types of Employment Contracts in Spain
To complicate things just a little further, there are different types of employment contracts:

Indefinite contracts
These include the normal indefinite contract as well as several types of indefinite contracts with government incentives.
The main characteristics of the normal indefinite contract are:

  1. In the absence of any other formalized contract type, the contract is presumed to be normal indefinite.
    nSeverance pay for improper dismissal is a maximum of 45 days salary for every year worked, up to a maximum of 42 months equivalent salary.
  2. There are no Social Security subsidies or any other financial incentives.

Indefinite contracts with incentives may be used when hiring:

  1. Workers over 45 who have been unemployed for at least one year.
    nWomen unemployed for more than a year, who have been hired for work in sectors where women have been traditionally under-represented.
  2. Workers between 30 and 44 who have been unemployed for more than a year.
  3. Unemployed workers under 30 years of age. Workers with disabilities.  


The main characteristics of an indefinite 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% for the employer’s social security contribution.
  • Tax benefits.

Temporary contracts the main types are:

  • Contract for a specific project or service,  arranged for the purpose of performing a specific  job or providing a service which is temporary and/ or 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 made 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 made 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 labour agreement.  Transitory employment needs may be met through workers provided by temporary work agencies.

How much does it cost to pay an employee´s social security in Spain?
Percentages of gross pay

The types of contribution fall into roughly three groups:

  • Standard contributions: demand 23.6% from the employer, 4.7% from the employee, making a total of 28.3%.
  • Unemployment: 6.0% on the part of the employer, 1.6% the employee. With a total of 7.6%.
  • And all other: 2.0% the employer, 0.1% the employee. With a total of 2.1%.

All together a total: employers at 31.6%, employees at 6.4% making the gross overall total 38.0%.

These percentages may be slightly different depending on the work contract, salary guaranteed, in the case of bankrupts, professional studies and additional amount based on the employees professional classification.

Finally, remember that if you are working in Spain for a year and your company is paying into the Spanish social security system, 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 (Internacional Convenios bilaterales).

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