When an employee falls ill, a doctor issues a medical leave certificate, the baja médica, which starts the period of temporary incapacity. The employee stays on the books, keeps accruing rights, and receives a benefit instead of normal pay. The key variable is the cause: ordinary illness and non-work injury are treated differently from work accidents and occupational illness.

For ordinary illness, the payment is structured in steps, and the employer carries a specific and often overlooked slice of it. That is the part worth getting exactly right on payroll.

For ordinary illness, the timeline runs like this. The first three days are usually unpaid, unless a collective agreement provides cover. From day 4 to day 15, the employer pays 60% of the regulatory base directly, out of its own pocket. From day 16 to day 20 the rate stays at 60%, but the cost is now borne by social security. From day 21 onwards the benefit rises to 75%, also funded by social security.

• Days 1 to 3: usually nothing, subject to the collective agreement.
• Days 4 to 15: 60% of the regulatory base, paid by the employer.
• Days 16 to 20: 60%, funded by social security.
• Day 21 onwards: 75%, funded by social security.

In practice the employer usually keeps paying the benefit through normal payroll even after day 15 and is reimbursed by social security, so the payslip stays consistent for the employee. Our guide to Spanish payroll shows how these amounts flow through the nómina.

An important detail: the 60% and 75% are not applied to full gross salary. They are applied to the regulatory base (base reguladora), which is derived from the employee’s social security contribution base from the previous period. For most employees that is close to their salary, but for higher earners whose salary exceeds the contribution ceiling, the base is capped, so the benefit is lower than the headline percentage of their actual pay might suggest.

If the leave is caused by a work accident or an occupational illness, the rules are more generous. The benefit is 75% of the relevant base from the day after the leave begins, with no three-day waiting period, and it is funded through social security or the employer’s mutua, the body that manages occupational contingencies.

The distinction matters for classification and cost, which is one reason the occupational accident premium is a separate line in employer social security. Getting the cause recorded correctly on the baja is part of running payroll properly.

The statutory figures are a floor. Many collective agreements (convenios colectivos) require the employer to supplement sick pay, sometimes topping it up to 100% of normal salary for a defined period. So the real obligation for a given employee depends on both the statutory rules and the convenio that applies to their sector and region.

This is exactly the kind of detail that is easy to miss when hiring into Spain for the first time. Identifying the right convenio and applying any top-up is part of what an EOR service in Spain handles, alongside the employment contract that sets it all out.

Spanish law recognises a few main routes. An objective dismissal (despido objetivo) is for justified economic, technical, organisational or production reasons, or certain individual grounds, and carries statutory severance. A disciplinary dismissal (despido disciplinario) is for serious misconduct by the employee and, if proven, carries no severance. A collective dismissal (despido colectivo, or ERE) applies when a certain number of roles are cut and follows a separate consultation process.

There is also termination by mutual agreement, and the natural end of a valid fixed-term contract. The route you use determines everything that follows, so the first decision is always which type of dismissal genuinely applies.

For an objective dismissal, the statutory notice is 15 days. Because the vast majority of Spanish employees are covered by a collective agreement, and many convenios extend notice to 30 days or more, the applicable convenio should always be checked before serving notice. If the employer does not give the required notice, it must pay salary in lieu for the missing days.

Disciplinary dismissals take effect on communication, without a notice period, but they must be set out in a formal letter stating the facts and the date. Procedure matters as much as the reason: a valid ground delivered through the wrong process can still be found unfair.

Severance, the indemnización, is based on length of service. For a fair objective dismissal, it is 20 days of salary for each year of service, with part-years counted proportionally, capped at 12 months’ salary. For a dismissal found to be unfair, it rises to 33 days of salary per year of service, capped at 24 months.

A fair disciplinary dismissal, where serious misconduct is proven, carries no severance at all. Employees who joined before 12 February 2012 may have part of their entitlement calculated at an older, higher rate for their pre-2012 service, a transitional rule worth flagging for long-tenured staff.

A dismissal is unfair, or improcedente, when the employer cannot justify the stated grounds or does not follow the correct procedure. If an employee challenges the dismissal and a court agrees, the employer must either reinstate the employee with back pay or pay the enhanced severance of 33 days per year of service, capped at 24 months. In most cases the choice between the two lies with the employer.

This is why classification and process matter so much. The gap between a 20-day objective settlement and a 33-day unfair award, plus back pay, is exactly what a well-run dismissal avoids. When there is real doubt, employers sometimes acknowledge unfairness up front and pay the 33-day figure to close the matter cleanly.

Take an employee on 40,000 euros a year, so roughly 109.6 euros of salary per day, with four years of service.

The numbers are illustrative and simplified, but they show why the classification is worth getting right: the same four-year employee costs roughly 8,770 euros or 14,470 euros depending on whether the dismissal stands. For how this fits the overall cost of a hire, see what it costs to employ someone in Spain.

As the legal employer, the EOR runs the termination process. It advises on the correct type of dismissal, drafts the letter, serves the right notice, calculates and pays the correct severance, and files what is needed with the authorities. You make the business decision that the role should end; the EOR makes sure the exit is handled to the letter of Spanish law.

That is where the value shows on the way out as well as the way in. A compliant, well-documented exit sharply reduces the chance of an improcedente finding and the enhanced severance that comes with it.

In Spain there are two main ways to engage someone: as an employee under a contract of employment, or as a genuinely independent autónomo who runs their own business and works for several clients. Misclassification happens when a company engages someone as an autónomo but treats them, in practice, like an employee.

That person is a falso autónomo, a false self-employed worker. The relationship looks like self-employment on paper but functions as employment day to day. Spanish authorities are alert to it, because it deprives the worker of employment protections and the social security system of employer contributions. For the wider picture of doing this properly, see our explainer on what an Employer of Record is.

Spanish law, through the Estatuto de los Trabajadores and a long line of court decisions, decides the question using two concepts. The first is dependencia: does the person work under the direction and organisation of the company, following its instructions, hours, and methods? The second is ajenidad: do they work for the company’s account and benefit, with the company providing the tools and bearing the business risk, rather than running their own enterprise?

When both are present, the relationship is employment, whatever the contract calls it. A genuine autónomo, by contrast, chooses their own hours, uses their own equipment, works for multiple clients, sets their own prices, and carries their own commercial risk.

In practice, a handful of features tend to reveal a false self-employed arrangement. If several of these are true, the risk is high.

• The person works only, or almost only, for your company.
• You set their working hours and where they work.
• You provide the equipment, systems, and email address.
• They are integrated into your team and reporting lines.
• They are paid a fixed regular amount that looks like a salary.
• They cannot send a substitute or subcontract the work.

A real contractor relationship looks different: multiple clients, their own tools, genuine control over how and when the work is done, and invoices that reflect a business rather than a wage. The more your arrangement drifts toward the list above, the closer it is to employment.

If the Labour Inspectorate (Inspección de Trabajo) finds a falso autónomo, it can reclassify the worker as an employee from the start of the relationship. The company then faces back social security contributions for the whole period, plus surcharges and interest, and financial penalties on top. The worker may also be owed employment entitlements they never received, and in some cases can claim the relationship was really permanent employment.

The exposure grows the longer the arrangement runs, because the back contributions and entitlements accumulate. Platform and delivery work is under particular scrutiny since the 2021 Rider Law (Ley Rider), which introduced a legal presumption that delivery riders working through digital platforms are employees. For any role that looks like ongoing, directed work, the contractor route is a false economy.

The clean way to avoid the whole problem is to employ the person properly. An Employer of Record does exactly that: it puts your chosen person on a compliant Spanish employment contract from day one, with social security, IRPF, and statutory entitlements all in place. Because they are a genuine employee, there is no false self-employed relationship for anyone to challenge.

That is often why companies move a long-standing contractor onto an EOR, or start with one for a role that was always really a job. You keep the working relationship and direct the work, exactly as before, but the classification risk disappears. Our step-by-step guide to hiring in Spain shows what proper employment involves.

The employer’s cost of a Spanish hire has three parts. The first is the gross salary you agree with the employee. The second is the employer social security contribution, about 30.65% of the salary for a permanent contract, which is entirely separate from the amount deducted from the employee’s own pay. The third is a variable occupational accident premium, often around 1.5% for office work, which depends on the activity.

Put together, the total employer cost is usually around 1.3 times the gross salary. The exact multiplier moves with the accident premium and whether the salary sits below the contribution ceiling. For the mechanics behind these percentages, our guide to Spanish payroll breaks down every rate.

Take an employee on a gross salary of 40,000 euros a year, on a standard permanent contract, with an office-based accident premium. The build-up looks like this.

• Gross annual salary: €40,000 — what the employee is paid before deductions.
• Employer social security at 30.65%: about €12,260 — paid by you on top.
• Occupational accident premium at roughly 1.5%: about €600.
• Total employer cost: about €52,860 a year, or close to 1.32 times the salary.

From the employee’s side, IRPF and their own social security of about 6.5% come out of the 40,000 euros, so their net pay is lower than the gross. But those are deductions from the salary, not extra costs to you. Your budgeting number is the 52,860 euros, spread across the year’s payroll runs.

Employer social security is not charged on unlimited salary. It is calculated on a contribution base with a ceiling of 5,101.20 euros a month for 2026, which is about 61,200 euros a year across 12 months. For salaries below that ceiling, the full percentages apply. For salaries above it, the standard contribution is capped, and only a smaller solidarity contribution applies to the excess.

In practice this means the 1.3 times multiplier holds for most salaries, but for a senior, highly paid hire the effective percentage drops once the salary passes the ceiling. It is worth modelling that specifically for higher-paid roles rather than assuming a flat uplift.

Salary and social security are the bulk of the cost, but not all of it. A collective agreement may require pay above the SMI or specific benefits. Some roles carry allowances or a thirteenth and fourteenth payment structure that you need to budget across the year. And you should plan for the possibility of statutory severance if the role ends, which in Spain is calculated from length of service.

None of these is usually large for a single office hire, but they belong in a realistic budget. Our guide to terminating employment in Spain covers how severance is calculated so you can provision for it sensibly.

The salary and the employer social security are the same whether you employ through your own entity or an EOR. What differs is the overhead around them.

For a full breakdown of the two routes, see our comparison of an EOR versus your own Spanish entity, and our pricing page shows how the EOR fee is structured.

For 2026 the SMI is set at 1,221 euros gross per month, based on the standard 14 payments a year. It was approved by Royal Decree 126/2026 and applied from 1 January 2026, an increase of around 3.1% on the 2025 figure. It is the legal minimum any full-time employee in Spain can be paid, before any higher minimum set by a collective agreement.

The SMI is reviewed each year by the government in consultation with unions and employers, so the figure moves annually. Because several of our other guides quote pay, we year-stamp the SMI wherever it appears and re-check it before publishing.

The way the SMI is expressed matters. Officially it is 1,221 euros a month across 14 payments, which is 17,094 euros gross a year. If a contract prorates pay into 12 payments instead of 14, the monthly figure rises to about 1,424.50 euros, but the annual total is unchanged. Always confirm whether a salary is quoted over 12 or 14 payments before comparing it to the SMI.

The government also publishes a daily rate, currently 40.70 euros, used for certain temporary work, and an hourly reference for domestic employees of around 9.55 euros. For most standard roles, though, the monthly and annual figures are the ones that matter.

This is the point that catches employers out. The SMI is the absolute legal minimum, but most sectors in Spain are covered by a collective agreement, a convenio colectivo, that sets its own minimum pay for each job category. Where a convenio applies, and it usually does, you must pay the higher of the convenio rate and the SMI.

So before you set a salary, you need to identify the convenio for the employee’s sector and region and check the minimum for their category. Paying the SMI when the convenio requires more is a common and avoidable mistake. Our guide to Spanish employment contracts explains how the convenio feeds into the contract itself.

The SMI applies to everyone regardless of age, which is different from countries that set lower youth rates. What does change it is the amount of work. For part-time employees, the SMI applies in proportion to the hours worked, so someone on half the standard hours is entitled to half the SMI, and the convenio rate is prorated the same way.

For temporary contracts of short duration, the daily SMI applies. The principle is consistent: the SMI is a rate for full-time work, scaled fairly to the hours actually worked.

A few mistakes come up again and again. Paying the SMI when a convenio requires more. Confusing the 12-payment and 14-payment figures. Forgetting that the SMI rises each year, so a compliant salary can quietly fall below the new floor in January. And treating the SMI as gross when budgeting, then being surprised by the employer social security on top.

None of these is hard to avoid, but each needs a deliberate check. If you would rather not track the SMI, the convenios, and the annual changes yourself, that monitoring is part of what an EOR service in Spain does, and the full cost picture is in our guide to what it costs to employ someone in Spain.

Each month the employer runs payroll and issues an itemised payslip, the nómina. It starts from the employee’s gross salary and applies two deductions: IRPF, the personal income tax, and the employee’s share of social security. What is left is the net pay that reaches the employee’s bank account.

Separately, and this is the part that surprises people, the employer pays its own social security contribution on top of the gross salary. So the true cost of a hire is the gross salary plus roughly 30.65%, not just the salary itself. The employer sends the IRPF to the Agencia Tributaria and all the social security to the Tesorería General de la Seguridad Social. If the whole model is new to you, our explainer on what an Employer of Record is sets the context.

IRPF (Impuesto sobre la Renta de las Personas Físicas) is Spain’s personal income tax. The employer withholds an estimated amount from each payslip and pays it to the Agencia Tributaria, then the employee settles up in their annual tax return. The withholding rate is personal: it depends on the salary, the type of contract, and the employee’s family circumstances.

The tax itself is progressive and is split between the state and the autonomous community where the employee lives, so the total ranges from around 19% at the bottom to 47% or more at the top, and the exact bands differ by region. For the employer, the practical points are that the withholding is reported regularly to the Agencia Tributaria (typically on form 111, with an annual summary on form 190), and that getting the withholding roughly right keeps the employee’s annual return simple.

The second deduction from gross pay is the employee’s share of social security, which is about 6.5% for a standard permanent contract in 2026. It funds healthcare, pensions, and unemployment cover, and it breaks down as roughly 4.70% for common contingencies, 1.55% for unemployment, 0.10% for vocational training, and 0.15% for the new intergenerational equity mechanism (MEI).

Higher earners also pay an additional solidarity contribution on the portion of salary above the maximum contribution base, introduced in 2025 and rising over time. For most employees, though, the 6.5% is the figure that shows up on the payslip.

This is the big one for budgeting. On top of gross salary, the employer pays a social security contribution of about 30.65% for a permanent contract in 2026, plus a variable premium for occupational accidents that depends on the type of work. The fixed part breaks down like this.

• Common contingencies: 23.60% — the largest piece, funding sickness, parental leave and pensions.
• Unemployment: 5.50% on a permanent contract (higher on fixed-term).
• FOGASA, the wage guarantee fund: 0.20%.
• Vocational training: 0.60%.
• MEI, the intergenerational equity mechanism: 0.75%.

Add the occupational accident premium, often around 1.5% for office roles, and the employer’s total is usually in the low 30s as a percentage of salary. That is why a €40,000 salary costs an employer closer to €52,000 once contributions are included. Our worked example in what it costs to employ someone in Spain takes a full salary through the numbers.

Social security is not charged on unlimited salary. It is charged on a contribution base, which sits between a floor and a ceiling. For 2026 the maximum monthly base is 5,101.20 euros and the minimum is 1,381.20 euros. If someone earns more than the maximum base, the standard contributions are calculated only up to that ceiling.

Salary above the ceiling is instead subject to the separate solidarity contribution, a smaller charge that applies only to the excess. For most roles the salary sits below the ceiling and the full percentages apply, but for senior, well-paid hires the cap materially changes the employer’s cost, which is worth modelling before you make an offer.

Spain has a distinctive pay structure. Most employees receive their annual salary across 14 payments: twelve normal monthly payslips plus two extra payments, the pagas extraordinarias, traditionally paid in summer and in December. A contract can instead prorate the salary into 12 equal payments, spreading the extras across the year, if the collective agreement allows it.

When you see a Spanish salary quoted, always check whether it is stated across 12 or 14 payments, because it changes the monthly figure. The payslip itself is a legally defined document that itemises gross pay, each deduction, the contribution base, and the net, so the employee can see exactly how their pay was calculated. For the practical registration steps behind all of this, see our step-by-step guide to hiring in Spain.

Before the paperwork, decide who the employer will be. If you set up your own Spanish entity, you complete every step below yourself. If you use an Employer of Record, the EOR is already a registered Spanish employer and does them for you, so you skip straight to managing the work.

The trade-off is cost, time, and administration, which we cover in detail in our comparison of an EOR versus your own Spanish entity. For a single hire or a small team, most companies use an EOR precisely so they do not have to complete the registrations that follow.

To employ anyone in Spain you must be a registered employer. That means holding a Spanish tax identification number, being registered with the Agencia Tributaria as a withholder of IRPF, and opening a social security contribution account (a Código de Cuenta de Cotización, or CCC) with the Tesorería General de la Seguridad Social.

This is the part that does not exist if you use an EOR, because the EOR already holds all of it. If you are setting up your own entity, these registrations follow incorporation and need to be in place before your first employee starts.

The employee must be affiliated and registered with social security (the alta) before their first working day. This is a hard rule in Spain, and doing it late is a common and expensive mistake. To register them you need their identification and tax number, a DNI for Spanish nationals or an NIE for foreign nationals, and their social security number (NUSS).

• DNI or NIE for the employee.
• Social security number (NUSS), obtained first if they do not have one.
• The alta filed with social security before day one.
• Bank details so you can pay salary in euro.

Give the employee a written contract that complies with the Estatuto de los Trabajadores and, crucially, with the collective agreement (convenio colectivo) that applies to their sector and region. The convenio can set minimum pay, working hours, overtime, and other terms above the statutory floor, and it is binding. Identifying the right one is a step companies often miss.

The contract then has to be registered with the SEPE, the public employment service, through its online system. Most permanent contracts in Spain are indefinite (indefinido); fixed-term contracts are only valid for specific, justified reasons since the 2022 labour reform.

Spanish law sets a floor you cannot go below. Pay must be at least the minimum wage (SMI), which in 2026 is 1,221 euros a month across 14 payments, or 17,094 euros gross a year, unless the convenio sets a higher figure. Employees are entitled to at least 30 calendar days of paid annual leave, and the standard full-time week is 40 hours averaged over the year.

Pay is usually split across 14 payments, twelve monthly plus two extra payments (pagas extraordinarias), though it can be prorated into 12 if the contract says so. Get these terms into the contract correctly and the rest of payroll follows cleanly.

With the employee registered and the contract in place, you run payroll each month. From the employee’s gross pay you withhold IRPF and pay it to the Agencia Tributaria, and you deduct their social security share. On top of gross pay, you pay the employer social security contribution of roughly 30%. Each employee gets an itemised payslip (nómina).

After that it is a monthly rhythm: payroll, filings, leave tracking, and keeping up with changes in the law and the convenio. This is the ongoing work an EOR service in Spain takes on so you do not have to, and our guide to Spanish payroll explains the deductions in full.

Setting up your own entity usually means incorporating a Sociedad Limitada, the Spanish equivalent of a limited company. You become the registered employer, open your own payroll and social security accounts, and take on the full set of employer and company obligations.

An Employer of Record Spain flips that around. The EOR is already a registered Spanish employer, so it employs your chosen person on its own entity and handles the contract, payroll, and compliance. You direct the work; the EOR carries the legal side. If the model itself is new to you, our explainer on what an Employer of Record is is the place to start.

Incorporating a Sociedad Limitada is not hugely expensive to set up, but the running costs add up. Expect roughly 600 to 1,500 euros to incorporate, covering the name certificate, the notary, and the Registro Mercantil. The larger number is the ongoing cost: accounting, quarterly filings, annual accounts, corporate tax work, and the director’s social security typically run to several thousand euros a year even before you pay anyone.

An EOR replaces all of that with a single monthly fee per employee, on top of the salary and the statutory employer costs you would pay either way (employer social security is around 30% of salary in both models). For one hire or a small team, that usually makes the EOR the lower total cost, because you are not funding a whole company’s overhead for one or two people.

Incorporating an SL usually takes two to four weeks once you have the pieces in place, and it assumes the directors already hold a Spanish tax number (NIE). You need a company name certificate from the Registro Mercantil Central, a notarial deed of incorporation, a tax ID (CIF), registration for tax and social security, and entry in the provincial Registro Mercantil. Only then can you open payroll and hire.

Since the 2022 Crea y Crece law you can form an SL with as little as 1 euro of share capital, which lowered the barrier to entry, though special reserve rules apply until capital reaches 3,000 euros. With an EOR, none of this sits on your critical path: the entity and payroll already exist, so a compliant employee can start in days rather than weeks.

This is where owning an entity really shows its weight. A Spanish company has to file corporate tax at 25% on profits (reduced rates apply to some new and small companies), submit quarterly VAT and withholding returns, keep proper accounting records, file annual accounts, and run its own payroll and social security every month. The director’s own social security, often under the self-employed regime (RETA), is a further monthly cost.

With an EOR, those obligations sit with the EOR, not with you. It runs payroll, files IRPF and social security, applies the correct collective agreement, and keeps up with changes in the law. You get a compliant employee without becoming a Spanish taxpayer and filer yourself.

• Corporate tax return and 25% on profits (own entity only).
• Quarterly VAT and withholding filings (own entity only).
• Annual accounts filed at the Registro Mercantil (own entity only).
• Monthly payroll, IRPF and social security (EOR handles this for you).
• Director’s social security under RETA (own entity only).

The decision usually comes down to scale and intent. If you want one person in Spain, a small team, or you are testing the market before committing, an EOR gives you a compliant hire quickly and cheaply, with an easy exit if plans change.

If you are building a larger, permanent operation in Spain, need a registered local presence for other reasons, or want full control of the structure, your own entity earns its overhead because it is spread across many employees. Many companies start with an EOR and set up an entity later, once the headcount justifies it. If your next question is the practical how-to, our step-by-step guide to hiring in Spain walks through the registrations in detail.

This is the first and most important question. Some providers own a Spanish entity and employ your person on it directly. Others are aggregators: they take your instruction and subcontract the actual employment to a local partner you never meet.

Owning the entity matters because it puts the contract, the payroll, and the compliance under one roof. There is no hidden third party adding a margin, no delay while an instruction is passed along, and no confusion about who is responsible if a filing is late or a term is wrong. Ask directly: do you employ my person on your own Spanish entity, or through a partner? The answer should be immediate and clear. Our guide to the best EOR provider in Spain goes deeper on why this is the dividing line.

Payroll in Spain is where accuracy shows. A capable EOR should be able to explain, in plain terms, how it withholds IRPF and pays it to the Agencia Tributaria, how it calculates and pays social security to the Tesorería General de la Seguridad Social, and how it applies the right collective agreement to your employee’s role.

Ask how it handles the 14-payment structure, whether it can prorate pay into 12 if needed, and how it deals with the annual extra payments. If the answers are confident and specific, the provider runs its own payroll. If they are hand-wavy, someone else is doing it. Our guide to Spanish payroll is a useful yardstick for the level of detail you should expect.

Compliance is the reason you are using an EOR at all, so probe it. A strong provider registers the employee with social security before they start, files the contract with the SEPE, applies the correct convenio colectivo, tracks the statutory 30 calendar days of leave, and keeps up with changes to Spanish employment law.

It should also understand the false self-employed, or falso autónomo, risk and why moving someone from a contractor arrangement onto proper employment removes it. If a provider treats compliance as an afterthought, that is exactly the risk you were trying to avoid.

Once the employee is live, support is what you actually experience month to month. Ask who your point of contact is, how quickly they respond, and whether the employee has a local contact for payroll and HR questions in their own time zone and language.

Find out how everyday changes are handled: a pay rise, a new benefit, a leave request, a change of address. With a strong provider these are simple and quick. With a weak one they turn into slow email chains, and the employee feels it. Support quality is the most common thing companies wish they had checked before signing.

Good pricing is easy to read. It separates three things: the employee’s gross salary, the statutory employer costs such as employer social security of roughly 30%, and the EOR’s own service fee. When those are itemised, you can see exactly what you are paying for.

Be cautious of a single blended number that hides the parts, of any markup on the statutory employer costs, and of vague service fees that shift over time. Ask for a written breakdown for your specific salary. Our pricing page shows the kind of clarity you should expect.

Put the answers side by side and the right provider usually stands out quickly.

If you are still weighing the model itself against the alternatives, our explainer on what an Employer of Record is and the comparison of an EOR versus your own Spanish entity are good next reads.

The process starts with an agreement between your business and the EOR. This is a commercial contract, not an employment contract. It sets out who you want to employ, their salary and role, the start date, and the monthly fee for the service.

This is also where you confirm the terms the employee will be given. Because the EOR will be the legal employer in Spain, it needs those terms to be clear and compliant from the outset, including salary structure, whether pay is split across 12 or 14 payments, holiday, and any benefits. A good EOR will flag anything that does not fit Spanish law before it is signed. If you want the fuller picture first, our guide to what an Employer of Record is explains the model in plain terms.

Next the EOR collects what it needs from the employee to register them and run payroll. This is usually the quickest part, and it is where most of the onboarding time sits.

The essentials are the person’s identification and tax number, a DNI for Spanish nationals or an NIE for foreign nationals, their social security number (NUSS), and bank details for payment. If the employee does not yet have a social security number, the EOR can arrange it as part of registering them with the Tesorería General de la Seguridad Social.

• DNI or NIE, the identification and tax number.
• Social security number (NUSS), or help obtaining one.
• Bank account details for salary payment in euro.
• Agreed terms: salary, role, start date, working hours and benefits.

With the details in, the EOR issues a compliant Spanish employment contract and has the employee sign it. In Spain the employer must register the employee with social security before they start, and register the contract itself with the SEPE, the public employment service, through its online system.

The contract has to respect the applicable collective agreement (convenio colectivo) for the sector and region, which can set minimum pay, hours, and other terms above the statutory floor. Getting the right convenio applied is one of the details that trips up companies trying to do this themselves, and it is a core part of what the EOR handles.

When the first pay date comes round, the EOR runs payroll and issues the payslip, the nómina. Two things come out of gross pay: IRPF, the personal income tax, which is withheld and paid to the Agencia Tributaria, and the employee’s share of social security. On top of gross pay, the employer pays its own social security contribution, which adds roughly 30% to the wage cost.

Most Spanish employees are paid across 14 payments a year, twelve monthly plus two extra payments (pagas extraordinarias), though pay can be prorated into 12 instead if the contract says so. The EOR sets this up correctly so the employee’s net pay and the reporting both line up.

If you want to understand these deductions in detail, our guide to how Spanish payroll works breaks down IRPF and social security in full.

After the first payroll, the process becomes a monthly rhythm. The EOR runs payroll, files IRPF and social security, tracks the statutory 30 calendar days of annual leave, applies public holidays, and manages any changes such as a pay rise, a new benefit, or a change of role.

You carry on managing the person day to day, setting their work and their objectives, exactly as you would with any team member. The employee has a local point of contact for payroll and HR questions, so most of the administration stays quietly in the background.

The split of responsibility is consistent across all five steps. You bring the hire and the working relationship; the EOR carries the legal and administrative side of being a Spanish employer.

When you are ready to see it applied to a real role, our EOR services in Spain page sets out exactly what is included, and the step-by-step hiring guide covers the employer registrations in more depth.