Employing People In Spain
Employment is highly regulated in Spain and employees’ rights are protected by law. The expense of employing staff can put employers off offering secure employment with the result that jobs can be hard to find; many contracts are short term, and people will study for years to pass the exams to become civil servants (oposiciones) often purely to ensure that they will have a secure job which they are almost guaranteed not to lose.
Finding a job in Spain can be difficult at times
The Estatuto de los Trabajadores (Workers’ Law) determines the basic rights of employees. In addition, jobs fall into categories each of which has its own set of rules. These are called convenios colectivos. These regulate the working hours, rate of pay, productivity and holidays and have been reached through negotiation between workers’ representatives and businesses.
These agreements are published in the BOE (boletín official) of each autonomous community or province. The detail of each agreement or convenio depends on a number of factors such as the number of employees, the sector or the geographical area.
So if you intend to offer employment, you need to be aware of what the convenio which will regulate your relationship with your employee states, in addition to what the national laws oblige you to do.
How many salary payments?
In theory, you can pay your employees either 12 or 14 times a year. Many employees are paid monthly but receive two additional payments in July and December.
Minimum salary (SMI or Salary Mínimo Interprofesional) was set in December 2019 at 12,600 euros per annum; either 14 payments of 900 euros or 12 payments of 1,050 euros for a 40 hour week.
You and your employee can decide how many payments will be made, and this must be reflected in the employment contract.
For sample employment contracts, follow this link:
Gross or Net?
Just as in other countries, employees in Spain receive their salary net, with income tax (IRPF) and social security payments deducted at source.
In the UK jobs are advertised with their gross annual salary. In Spain people tend to talk about their net monthly salary. It can therefore be hard to make a comparison.
In Spain you must usually provide written contracts to your employees, and also to register the contract within ten days of making it, with the INEM (the state employment service). In order to give yourself the flexibility you may need to be able to change your team when you need to, and also to make sure that you have recruited the right people, employers are normally advised to offer contracts with a fixed end date (temporal or duración determinado), at least at the beginning of the employment relationship. That way, at the end of the fixed term, they can decide to renew the contract or not.
Most workers will be delighted to receive an indefinite (indefinido) contract, which makes them fijo (permanent) as this gives them the security of knowing that if they are ever dismissed, they will receive compensation. For an employer, ending an indefinite contract can be very expensive.
After two years of working for you with successive short-term contracts, your employee will automatically become permanent.
This link takes you to the INEM site and explains how to make contracts and what they must contain:
And here you will find model contracts which you can download and complete:
At the end of an employment contract the employer makes a final payment called a finiquito which mainly covers any holiday entitlement that the employee has not yet taken.
What does Cotización mean?
It means being registered in the social security system. As soon as a person is employed with a contract, they are cotizado or registered in the social security system which, as it is a contributions based system, entitles them to access public healthcare and contribute to their state pension and unemployment benefit entitlement.
Social Security Payments
The percentage of an employee’s salary which is paid to social security is about 36%.
The employer pays approximately 30% and the employee around 6%. So the employee receives his or her salary with the 6% or so already deducted. On the payslip (called the nómina), the social security payment will be made up of normally three different amounts, and these indicate what the social security payment goes towards. It will include a payment towards unemployment and also other contingencies as well as employee training.
Income tax (IRPF) - where payable - is also deducted at source; the actual percentage varies according to the employee’s personal situation including factors such as how many children they have and their ages, and also their spouse’s income.
If an employer dismisses or makes an employee redundant before the end of a contract, they have to pay compensation of 45 days’ salary for each year that the employee has worked for them. If a worker is dismissed with sufficient cause such as gross misconduct, no compensation payment is necessary.
In both cases however, the finiquito will still be payable.
If you do fire an employee for some reason, you may find yourself in court, firstly because you did not do it correctly (you would be advised to consult an employment lawyer first) or simply because the courts usually decide in favour of the employee and therefore a fired employee has little to lose by taking the employer to court.
If the court rules that it was a “despido nulo” - a bit like an unfair dismissal or literally null dismissal, the employer may have to pay the employee compensation.
If an employee decides to leave before a contract ends, he or she must sign a resignation letter known as a baja voluntaria. Without this, the employee could later turn around and accuse you of dismissing him or her.
An employee who becomes sick must present a form from the GP, known as a “baja”, to the employer. Social Security then pays that employee’s salary after a short period of time.
Workers are generally entitled to 30 natural days’ holiday each calendar year which works out as about 22 working days of holiday per annum, and holidays have to be taken by January 15th unless an agreement has been reached to carry some over to the next year (as this is not a right).
National public holidays as well as two local holidays are also added to the holiday entitlement.
There are other reasons for taking time off work, such as maternity (40 days), getting married (15 days), death of a close family member (3 days) and so on.
National public holidays in Spain are as follows:
1st January - New Year
6th January - Epiphany
Good Friday and Easter Monday
1st May - Workers´ day
15th August - Day of the Assumption
12th October - National Holiday
1st November - All Saints’ Day
6th December . Spanish Constitution Day
8th December - Immaculate Conception
25th December - Christmas Day
Link to the Social Security website (employers’ page) in which some pages are available in English:
Link to the employers’ page of the AEAT (Hacienda) - Tax Office: