The questions every international employer asks about hiring in Spain

1

How do you employ someone in Spain?

You employ someone in Spain either by setting up your own Spanish company or by hiring them through an Employer of Record that already has one. Either way the employee must be registered with the Seguridad Social before their first day, the written contract filed with the SEPE within 10 days of starting, and payroll run under Spanish rules. There is no at-will employment in Spain, so the contract and the registrations matter from day one.

2

How much does it cost to employ someone in Spain?

The real cost is the gross salary plus employer social security on top, plus any benefits you offer. For most salaries the employer contribution is around 30% of pay, charged on a base capped at €5,101.20 a month in 2026, so higher salaries are effectively capped.

Separately, income tax (IRPF) and the employee’s own social security come off their pay. The employer withholds and files all of it: IRPF to the Agencia Tributaria and contributions to the Tesorería General de la Seguridad Social.

3

How long does it take to hire someone in Spain?

Through an Employer of Record, someone can be employed and working within days, because the EOR is already a registered Spanish employer and can issue a contract within hours. Setting up your own Spanish entity first usually takes 6 to 10 weeks in practice, once tax numbers, the notary, the bank account and the employment registrations are in place.

4

Do you need a Spanish company to employ someone there?

No. You do not need your own Spanish company to employ someone in Spain. You can incorporate a Sociedad Limitada, with set-up costs of roughly €3,000 to €6,000 and ongoing accounting and filing obligations, or you can employ through an Employer of Record and have someone working within days. Your own entity tends to suit a larger, permanent operation. An EOR suits a first hire or a small team.

5

Should you hire an employee or a contractor?

If the role is ongoing and the person works under your direction, treat them as an employee, not a contractor. Spanish law presumes employment where there is dependence and control, the Inspección de Trabajo actively pursues the falso autónomo, and reclassification brings back-dated social security, penalties and employment rights. A genuine contractor runs their own business and works for several clients.

6

What must a Spanish employment contract include?

A Spanish contract sets pay, hours, role and probation, and it is drawn up under the Estatuto de los Trabajadores and the collective agreement (convenio colectivo) that applies to the role. The convenio can set minimum pay and conditions above the statutory floor, and the contract cannot undercut either. It must be registered with the SEPE within 10 days of the start date, and reused overseas templates usually miss what Spanish law requires.

7

How do IRPF and social security work?

Two things come off each Spanish payslip: income tax (IRPF), withheld on a progressive scale that runs from about 19% to roughly 47% in 2026 depending on earnings and region, and the employee’s social security at around 6.5% of gross pay. Salaries are typically paid monthly with two extra pay periods in July and December, often prorated. The employer files IRPF with the Agencia Tributaria and contributions with the Tesorería General de la Seguridad Social each month.

8

What is the minimum wage in Spain?

The Spanish minimum wage (SMI) for 2026 is €1,221 a month, paid across 14 payments, which comes to €17,094 a year. Collective agreements often set a higher minimum for the sector or role, so the applicable convenio is usually the figure that actually matters.

9

What leave are employees in Spain entitled to?

Employees in Spain get a minimum of 30 calendar days of paid annual leave, plus 14 public holidays, some of which vary by region and municipality. On top of that sit paid birth and care leave of 16 weeks for each parent, paid through the Seguridad Social, and shorter statutory permissions for events such as moving house, marriage and medical appointments. Convenios often improve on all of these.

10

How does sick pay work?

For common illness the first three days are unpaid by default, the employer pays 60% of the contribution base from day 4 to day 15, and from day 16 the Seguridad Social takes over, rising to 75% from day 21. Work accidents are paid at 75% from the day after the accident. Many collective agreements require the employer to top pay up to 100%, so the convenio decides what your employee actually receives.

11

How do social security and pensions work?

Spanish social security is a single system that funds healthcare, sick pay, unemployment, family benefits and the state pension. The employer contribution of around 30% and the employee’s share both go to the Tesorería General each month, and contribution years build the employee’s pension entitlement. There is no auto-enrolment workplace pension obligation as in some countries, though company pension plans exist as a benefit.

12

How do you end employment in Spain?

Dismissal in Spain must be justified and documented; there is no at-will termination. An objective dismissal requires 15 days’ statutory notice and severance of 20 days’ salary per year of service, capped at 12 months’ pay. A dismissal ruled unfair (improcedente) costs 33 days per year of service, capped at 24 months. A fair disciplinary dismissal carries no severance, and the applicable convenio can extend notice.

13

What are the rules on remote work?

Spain’s remote work law applies when someone works remotely for 30% or more of their time. It requires a written remote work agreement, obliges the employer to cover the costs of equipment and working from home, and preserves equal rights with office-based staff. Spanish law also gives employees a right to digital disconnection outside working hours.

14

How can an Employer of Record handle all of this for you?

An Employer of Record employs your team member through its own Spanish entity, so you skip the company set-up entirely. The EOR issues the contract under the right convenio, registers the employee with the Seguridad Social and the SEPE, runs compliant payroll including the extra pay periods, and manages the statutory obligations on this page, from leave and sick pay to notice and severance. You direct the work, and get one named specialist and a single monthly invoice.