Payroll in Spain

The period for settling and paying regular wages in Spain cannot be longer than one month. Monthly payroll is the norm, and it is also the longest gap the law allows.

Payday and payslips

Agree the payday with the employee and put it in writing. Each payslip has to separate the pay components from the lawful deductions, so salary, any prorated extra payments, Social Security withheld and income tax withheld all show as their own lines.

The employee's payday is one date. Your Social Security and tax remittance deadlines are different dates. Keep them apart in your payroll calendar.

The 14 payments

Workers have a right to two extra payments a year. One is paid at Christmas. The other is paid at the time set by the collective agreement or by an agreement with employee representatives. The collective agreement also sets how much each one is, and it can allow you to prorate them across the 12 monthly payments.

Whichever way you pay them, state the total annual gross salary and the payment schedule in the contract. That stops the extras being left out or counted twice. A EUR 42,000 annual salary paid in 14 instalments already includes the extras. It is not EUR 42,000 plus two more payments.

Remitting contributions and tax

You generally remit Social Security contributions during the month after the pay period. You are responsible for both your own share and the employee share you withheld from pay.

On the tax side, you file Form 111. When you file depends on your tax category. Ordinary quarterly filers have the first 20 calendar days after the quarter ends, adjusted when the deadline falls on a non-working day. Other categories follow a different calendar, so confirm your filing category and the current calendar with the tax authority (AEAT) before your first pay run rather than assuming one deadline fits every employer.

Working hours and time records

The statutory maximum ordinary week is 40 hours of effective work, averaged over the year. The ordinary daily limit is nine hours, unless a collective agreement or an agreement with employee representatives sets another distribution while respecting rest. Check whether the applicable agreement sets shorter hours. A 37.5-hour week has been proposed, but it is not the current general limit in the statute.

You must keep a daily record of each worker's start and finish times and hold it for four years, available to workers, their representatives and the labour inspectorate. Flexible schedules do not remove that duty, so agree how remote work, overtime and leave get recorded.

Spain has no flat income tax rate you can apply to every employee. Income tax (IRPF) on ordinary employment income is withheld at a variable rate, calculated for each person under the tax authority's procedure.

How IRPF withholding works

The withholding rate depends on the employee's pay, their deductible amounts and their personal or family circumstances. Two people on the same salary can end up with different rates. The tax authority (AEAT) publishes the calculation procedure, and its 2026 version took effect from 10 September. Payroll should use the version that applies to each payment.

Final income tax can also involve the scale set by the employee's autonomous community. That is why a single flat percentage is not a take-home pay estimate for everyone, and why this guide does not quote one.

Employee Social Security deductions

On top of income tax, employees on an ordinary indefinite contract pay 6.50% of their contribution base in 2026. You withhold it from pay and remit it with your own share. Ordinary temporary contracts can use a 1.60% employee unemployment rate instead, with specified exceptions.

Both shares are worked out on the same contribution base. It includes prorated extra payments and, in 2026, the ordinary maximum is EUR 5,101.20 a month.

Business taxes are a separate matter

The general corporate income tax rate is 25%, with reduced regimes for qualifying businesses. For tax periods beginning in 2026, qualifying small companies can use 23%, and qualifying businesses with prior turnover below EUR 1 million pay 19% on the first EUR 50,000 of taxable profit and 21% on the rest. The general VAT rate is 21%.

These are business and transaction taxes. None of them is an extra percentage taken out of an employee's salary.

For an ordinary indefinite hire in the General Scheme, you pay 30.65% of the contribution base in 2026. The work-injury premium comes on top of that and depends on the activity.

The five employer contributions

The employee share for the same hire totals 6.50%, withheld from pay. These are the standard rates. Bases, limits, exemptions and special arrangements can change the result. Ordinary temporary contracts can use a 6.70% employer unemployment rate instead of 5.50%, with specified exceptions.

Contribution base: floor and ceiling

Contributions use the applicable contribution base, and that base includes prorated extra payments. In 2026 the ordinary maximum monthly base is EUR 5,101.20. Minimum bases vary by occupational group, so the floor depends on the role.

In a simple full-year example, a EUR 42,000 annual salary paid in 14 instalments gives a EUR 3,500 monthly base, before any other included pay. That is the annual salary over 12 months, not the size of one instalment.

The work-injury premium

Occupational accident and disease contributions are an additional employer cost under the applicable statutory tariff. The charge depends on the activity and the work classification, so there is no universal percentage to add to every Spanish hire. Get the actual assessment for the role before you budget.

What a EUR 42,000 salary really costs

Take an ordinary indefinite hire on EUR 42,000 gross a year, extra payments included, with a EUR 3,500 monthly contribution base and the standard 30.65% employer rates.

That subtotal is a floor, not the full budget. Add the work-injury premium, benefits and equipment on top. Do not add the extra payments again, because the EUR 42,000 already includes them.

Annual leave in Spain is at least 30 calendar days a year. The collective agreement or contract sets the exact duration, and it stays in calendar days. Do not convert it into an automatic 22 working days for every schedule.

Annual leave

Leave dates are agreed within the planning rules that apply, and the employee must know them at least two months in advance. During employment, leave is not normally swapped for cash.

If leave overlaps a protected pregnancy-related absence or the birth and childcare suspension, the employee can take it later, even after the year ends. For other temporary incapacity, the statute allows later use within 18 months after the end of the year the leave accrued in. Check the circumstances before treating unused leave as lost, and settle any outstanding entitlement when employment ends.

Public holidays

Labour holidays ordinarily total up to 14 paid, non-recoverable days, and two of those are local holidays. The 2026 official calendar lists these dates in every autonomous community:

• 1 January
• 6 January
• 3 April
• 1 May
• 15 August
• 12 October
• 8 December
• 25 December

The other dates, and any substitute holidays, depend on the autonomous community and the municipality. Use the labour calendar for the employee's work location, not a national calendar of administrative office closures.

Sick leave

For ordinary illness or a non-work accident, the first three days carry no statutory benefit, although an agreement can improve pay. From day four the benefit is generally 60% of the regulatory base, rising to 75% from day 21.

Work-related cases follow different rules. The benefit is generally 75% from the day after the absence begins, and you pay the first day's full salary. Temporary disability normally lasts up to 365 days, with a possible 180-day extension under the medical process. Check collective-agreement top-ups and your ongoing contribution duties separately. Special statutory situations have their own rules.

Birth and childcare leave

For events covered by the current rules, each parent has 19 weeks. The old general 16-week entitlement no longer applies.

The right belongs to each parent individually, and the optional periods come with notice and scheduling rules. Eligible workers receive a birth and childcare benefit equal to 100% of the applicable regulatory base, which can differ from uncapped gross salary. Contribution conditions depend on age: there is no minimum contribution period below 21, with different qualifying periods for ages 21 to 25 and 26 or over. Confirm the entitlement, the calculation and any collective-agreement top-up with payroll before the leave starts.

A transitional rule also applies. The two weeks usable before age eight, or four for a single parent, also cover qualifying events from 2 August 2024, and those periods and the benefit can be requested from 1 January 2026. That does not give every earlier birth the full 19 weeks.

Most compliance risk in Spanish payroll sits in five places: the collective agreement, probation, overtime and rest rules, time records and the final settlement. Start with the agreement, because it shapes several of the others.

Collective agreements

A collective agreement binds employers and workers within its scope. It can set the salary scale, job classification, working time, extra payments, leave and employment procedures. OECD data puts collective bargaining coverage in Spain at 92.1% for 2024, so check for one before you write an offer. Identify the actual agreement for each hire and record why it applies.

Probation

Probation must be agreed in writing. Subject to the collective agreement, these are the ordinary default maximums:

You cannot repeat probation for functions the worker has already performed for you.

Overtime and night work

Overtime must be paid at least at the ordinary hourly rate, or compensated with equivalent paid rest. Without an agreement on compensation, the rest is due within four months. The ordinary limit is 80 overtime hours a year, not counting hours compensated with rest within four months or specified emergency work. A collective agreement does not create a general right to go past that cap.

Night work is work between 22:00 and 06:00. Covered night workers generally have an eight-hour daily average limit over 15 days and cannot work overtime, subject to special rules. Night pay is set through collective bargaining, and there is no universal 25% statutory night premium.

Rest and breaks

Workers normally need at least 12 hours between working days and an uninterrupted weekly rest of one and a half days, which can generally be accumulated over 14 days. Continuous work of more than six hours needs a break of at least 15 minutes. That break counts as working time only where the collective agreement or contract says so. Special rules and young-worker rules can be stricter.

Ending employment

An objective dismissal ordinarily needs 15 days' notice, a written reason and the applicable compensation. During the notice period the employee gets six paid hours a week to look for work. Disciplinary dismissal and the end of a fixed term have different requirements, and paying notice does not make an otherwise unlawful dismissal valid.

The final settlement, commonly called the finiquito, reconciles outstanding wages, accrued extra payments and unused leave. Severance or notice pay depends on how the employment ends and is separate from those earned amounts. The worker can ask for a representative to be present when signing the settlement receipt.