Employer of Record (EOR) in Spain

Brain Source International helps you save time and reduce costs by allowing you to hire in Spain without establishing an entity. Our Employer of Record (EOR) solution handles onboarding, payroll, immigration, and benefits so you can hire your employees faster and grow your business compliantly.

What is an Employer of Record (EOR) in Spain?

An Employer of Record (EOR) in Spain is a strategic partner that acts as the legal employer for your employees residing in Spain. The EOR takes on all employment responsibilities and liabilities on your behalf, handling payroll, benefits, taxes, and regulatory compliance.

By partnering with an EOR, you can hire employees in Spain without the need to establish a local entity or navigate complex labor laws.

Employer of Record (EOR) in Spain: Key Aspects of the Polish Labour Code

Minimum Wage

General: In Spain, minimum wages are typically set by industry sector through collective bargaining agreements. However, the general minimum wage across the country is 1,080 EUR per month, paid in 14 installments. For temporary and seasonal workers employed by the same company for fewer than 120 days, the daily minimum wage must be at least 51.15 EUR.

Payroll

Payroll Cycle: In Spain, payroll is typically processed on a monthly basis, with payments usually made on the last day of the month.

13th Salary

13th and 14th month salary payments are mandatory in Spain. This is usually paid within the 12 monthly salary payments.

Taxation

Employer Payroll Contributions

Employer Payroll Contributions

Employee Income Tax

Would you like to know the approximate cost of employment in Spain?

Working Hours

General: In Spain, the standard working week is limited to 40 hours, with a typical workday of 8 hours. The usual schedule runs from 8:30-9:00 am to around 2:00 pm, followed by a siesta break, with work resuming from 4:00-5:00 pm until approximately 8:00 pm. Some collective agreements allow workers to reduce their weekly hours to 36 during August, with the difference being made up throughout the year.

Additionally, under the Spanish Worker’s Statute (Royal Decree-Law 8/2019), employees are required to record their actual working hours by clocking in and out during breaks and at the end of each workday.

Overtime: Overtime regulations in Spain can vary by industry. White-collar workers are generally restricted to a 40-hour workweek, and any hours beyond this must be compensated, typically at a rate of 175%. An employee can work a maximum of 80 overtime hours per year. Overtime hours and payments are carefully regulated by collective agreements, and participation in overtime work is voluntary for employees.

Leave

Annual Leave (Vacation):

Employees in Spain are entitled to 30 calendar days (or 22 business days) of paid annual leave each year, with the possibility of additional vacation time if specified in a collective bargaining agreement.

In general, employees must use their full vacation entitlement within the same year. However, exceptions are made in cases where leave cannot be taken for valid reasons, such as temporary incapacity to work. In such cases, unused vacation days can be carried over and used after the period of disability, even if the calendar year has ended, for up to 18 months following the year in which the leave was accrued.

Public Holidays

Workers in Spain are entitled to 14 paid public holidays per year, which include national, regional, and local holidays.

If a national holiday falls on a weekend, it is generally not replaced with a day off. However, some regions and municipalities may declare the following workday as a holiday in lieu. Employees should check with local authorities to confirm the dates of regional and municipal holidays.

Sick Days

In cases of sick leave due to common illness or non-work-related injury, employees in Spain must provide a medical certificate and are entitled to the following salary payments:

• Days 1-3 of incapacity: Unpaid.
• Days 4–20 of incapacity: 60% of the salary calculation base*.
• Day 21 and onwards: 75% of the salary calculation base*, for up to 18 months, depending on approval by the National Social Security Institute (INSS).

The salary calculation base is determined by dividing the worker’s contribution basis (the monthly gross salary, capped at a maximum for Social Security contributions, which is 4,720.50 EUR per month for 2024) by 30 days if the employee is on a fixed monthly salary.

Employers are responsible for covering sick leave payments until the 15th day, after which they continue making the payments but can claim reimbursement from the Social Security Administration (INSS) starting from the 16th day.

A collective bargaining agreement may offer more favorable sick leave terms. Since 1st April 2023, the INSS sends medical sick leave reports for temporary incapacity directly to companies via the “INSS EMPRESAS” system through the RED platform.

Maternity Leave

A pregnant employee in Spain is entitled to 16 weeks of maternity leave, which can be extended to 18 weeks in cases of complicated deliveries or multiple births.

The 16 weeks of maternity leave are divided into two periods:

• Compulsory leave: The first six weeks must be taken immediately following the birth.
• Remaining leave: The employee has 10 additional weeks, which can be taken as full-time leave or spread over 20 weeks of half-day absences. This leave can be taken any time within the first year after the birth, with at least 15 days’ notice.

It is also common for employees to take an additional two weeks of breastfeeding leave following maternity leave.

Maternity pay is administered by the Social Security System Health Insurance Fund, and employees on maternity leave receive 100% of their salary, up to a maximum base of 4,720.50 EUR per month.

In cases of a child’s disability, adoption, or foster care, employees are entitled to two additional weeks of maternity leave.

All pregnant women have access to healthcare before, during, and after birth through the Sistema Nacional de Salud (National Health Service) by presenting their user’s card at healthcare centers.

Paternity Leave

Fathers who have paid Social Security contributions for at least 180 working days in the past 7 years, or a total of 360 days throughout their career, are entitled to 16 weeks of paid paternity leave (extended to 18 weeks for multiple births). The first 6 weeks of leave are compulsory and must be taken immediately after the birth. The remaining 10 weeks (or 20 weeks of half-day absences) can be taken any time before the child turns one year old.

Paternity pay is managed by the Social Security System and is calculated as a monthly benefit equal to 100% of the father’s salary, up to a maximum of 4,720.50 EUR per month. During this period, the employer remains responsible for contributing to certain taxes related to the salary payments.

For same-sex couples, both parents are entitled to paid leave, with one parent applying for paternity leave benefits and the other for maternity leave benefits. To qualify for these paid benefits, each parent must have the appropriate legal relationship with the child.

Parental Leave

Employees are entitled to take unpaid parental leave, provided they give at least 10 days’ notice, until their child turns eight years old. This leave can be taken for up to eight weeks, either continuously or in multiple blocks.

Other Leave

Workers are entitled to additional special leave (unless specified otherwise by the Collective Bargaining Agreement) for the following situations:

• Care Leave: Employees can take up to two years of unpaid leave to care for a seriously ill household or family member.
• Family Nursing & Hospitalisation Leave: Employees are entitled to 5 days of paid leave to care for family members or second-degree relatives with serious illness, hospitalisation, or surgery. Employers may require proof of hospitalisation.
• Bereavement Leave: Employees are entitled to 2 days of paid leave (or 4 days if travel is required) for the death of a family member.
• House Moving Leave: Employees moving to a new home are entitled to 1 day of leave.
• Marriage Leave: Employees can take up to 15 days of leave for their marriage.
• Judicial Leave: Employees are entitled to paid leave to fulfill public or personal obligations related to court appearances, with prior written notice required.
• Union Leave: Employees performing trade union or workers’ representative duties may be granted additional leave as defined by law or collective agreements.

Employer of Record (EOR) in Spain with Brain Source International

Partnering with Brain Source International for EOR services in Spain can simplify your international expansion, reduce legal risks, and streamline your operations. Whether you’re hiring full-time employees or independent contractors, Brain Source International ensures compliance with Spanish employment laws, allowing you to focus on growing your business.

Get a Quote now or Contact Us to learn more about how we can support your journey to global success.

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Effortlessly recruit, employ, and pay your global workforce in Spain and beyond

Maximize the potential of your global HR operations with Brain Source International’s uniquely integrated Recruitment and Employer of Record (EOR) solutions. Eliminate the hassle of coordinating multiple vendors across continents. Forget the lengthy and costly process of setting up your own entity — turn what used to be a complex, risky task into a streamlined, results-driven route to global success with our support!

Our all-in-one solution saves you time, connects you with top international talent, and shields your business from the risks of global employment.

Expand with confidence and keep your focus on core business growth — all by signing a single service agreement with BSI Employer of Record. We’ll be your dedicated partner for all global talent requirements. Our comprehensive Global Recruitment and EOR services guarantee 100% compliance in over 150 countries, managing monthly payroll, payslips, tax reporting, employee benefits, and full adherence to each country’s labor laws on your behalf.

FAQ — Hiring and Employment Compliance in Spain

What are my options if I want to hire a worker in Spain?

Spain allows several compliant hiring models under Spanish labour law: 1. Establishing a Spanish legal entity: Creating an SL or SA is the most compliant method for long-term operations. This requires registration with the Mercantile Registry, obtaining a tax ID (NIF), and enrolling with Social Security. It is the best route for companies planning continuous activity in Spain with multiple employees. 2. Establishing a non-permanent establishment: This allows a foreign company to operate for tax and social security purposes without forming a full legal entity. It is suitable for companies entering the market cautiously or hiring a limited number of employees without major decision-making authority. 3. Engaging independent contractors: Companies may work with contractors for specialised or project-based work if the individual truly operates independently. Misclassification is a serious offence in Spain and can result in heavy penalties, so the relationship must genuinely reflect contractor status.

How long does it take to set up a company in Spain?

Registering a company in Spain typically takes several weeks, depending on the structure and how quickly filings are approved. After incorporation, companies face extensive ongoing obligations, such as: registering employees with the Social Security Treasury (TGSS) paying mandatory employer and employee contributions providing statutory benefits (annual leave, parental leave, sick pay) complying with the relevant collective bargaining agreement (CBA) deducting and remitting income tax (IRPF) maintaining statutory HR and payroll records following strict termination procedures These requirements increase the administrative burden once the company begins operating.

Can I employ people as independent contractors in Spain?

Yes, but only when the relationship clearly meets Spain’s definition of a true independent contractor (autónomo). Contractors must: register with Spanish tax and social security authorities invoice for their services pay their own income tax and social security contributions control their schedule, tools and working methods If they work under your supervision, follow set hours, or use your equipment, Spanish authorities may reclassify them as employees. Reclassification can lead to: retroactive wages and benefits backdated social security contributions fines ranging from €3,126 to over €10,000 per worker possible criminal penalties in severe cases

What does HR compliance mean in Spain, and why is it important?

HR compliance means ensuring all employment practices follow Spanish labour law and applicable CBAs. This includes obligations related to: working hours and overtime limits timely salary payments social security contributions tax withholdings (IRPF) statutory benefits (annual leave, public holidays, sick leave, maternity/paternity leave) workplace health and safety equality and anti-discrimination rules maintaining employment records and issuing written contracts following proper dismissal procedures Failure to comply can result in fines, back pay, social security liabilities, reinstatement orders and legal disputes. Compliance safeguards both employees and employers.

How much does it cost to employ someone in Spain?

Employers must pay several statutory contributions on top of the gross salary: Common contingencies: 23.60% Unemployment insurance: 5.50% (permanent) / 6.70% (temporary) FOGASA: 0.20% Training fund: 0.60% Intergenerational Equity Mechanism (MEI): 0.67% Occupational accident/illness insurance: 0.90–8.50% Solidarity quota: 0.92% – 1.17% for high salaries Employers must also withhold: approx. 6.48% employee social security contributions IRPF income tax (19–47%, depending on region and income) The true cost of employment varies by contract type, sector and salary level.

Is hiring through an Employer of Record (EOR) legal in Spain?

No. Using an EOR in Spain is not legally compliant. Spanish labour law requires that the entity directing the employee’s work must also be the formal employer responsible for payroll and social security. An EOR arrangement is considered illegal labour leasing (cesión ilegal de trabajadores). Consequences may include: fines up to €225,000 back pay of wages and benefits retroactive social security contributions joint liability for severance and workplace accidents potential criminal liability in severe cases Companies must hire through their own Spanish entity, an EU entity registered in Spain, or engage genuine contractors.

What are the legal responsibilities of a company when employing in Spain?

Employers must: issue written employment contracts apply the correct CBA register with the Social Security Treasury (TGSS) pay employer contributions (~32.5% of salary) withhold employee contributions (~6.5%) and IRPF comply with working time rules (40 hours/week, 9 hours/day) manage leave entitlements (annual leave, sick leave, parental leave) ensure workplace health and safety compliance uphold equality and non-discrimination rules protect employee data under GDPR follow strict dismissal procedures and pay severance where required Incorrect dismissals may lead to compensation or reinstatement.

What taxes and contributions do employers and employees pay in Spain?

Employer contributions (approx. 32.5%): Common contingencies (23.60%) Unemployment insurance (5.50%/6.70%) FOGASA (0.20%) Training fund (0.60%) MEI (0.67%) Occupational accident/illness insurance (0.90–8.50%) Solidarity quota (0.92–1.17%) Employee contributions (approx. 6.48%): Common contingencies (4.70%) Unemployment insurance (1.55%/1.60%) Training (0.10%) MEI (0.13%) Solidarity quota (for high salaries) Employees also pay progressive IRPF income tax (19% to 47%), which employers must withhold and remit monthly.