4. Types of leave

There is no information about the types of leave for this country.
Learn more about types of leave >

Paid time off

At least 30 days of paid time off are required. Employees are guaranteed at least one and a half days of undisturbed relaxation each week. Sunday must, in general, be included.

Public holidays

The number of public holidays in Spain varies by province.

Sick days

The maximum length of sick leave is 12 months (365 days), which may be extended for an additional six months (180 days). The sick leave is referred to as Temporary Disability – IT (Incapacidad Temporal). Eligible workers are eligible to benefit payments ranging from no statutory payment provision to 75% of the regulatory base while on leave.

Employees must have made at least 180 days of contributions in the five years prior to taking sick leave to be eligible for benefits. There is no minimum qualifying duration if the sick leave is connected to an accident. Employees must also have a medical certificate issued by a doctor affiliated with the Public Health System.

Maternity leave

Maternity leave is granted to mothers for a period of 16 weeks. The leave can start up to four weeks before the projected due date, and it must last at least six weeks after the child is born.

During maternity leave, the employee is paid a maternity benefit rather than their wage. The maternity benefit is computed and provided by social security based on the previous month's contribution (including monthly income and the proportional share of the extra pay).

The monthly maternity benefit is restricted at 4,070 EUR. The employer can choose to pay the difference if the employee's wage is normally more than this amount; however, this is not required.

Paternity leave

The maximum length of sick leave is 12 months (365 days), which may be extended for an additional six months (180 days). The sick leave is referred to as Temporary Disability – IT (Incapacidad Temporal). Eligible workers are eligible to benefit payments ranging from no statutory payment provision to 75% of the regulatory base while on leave.

Employees must have made at least 180 days of contributions in the five years prior to taking sick leave to be eligible for benefits. There is no minimum qualifying duration if the sick leave is connected to an accident. Employees must also have a medical certificate issued by a doctor affiliated with the Public Health System.

Parental leave

Employees have the right to take up to three years off to care for their children, whether they are biological, adopted, or being fostered permanently or as part of a pre-adoption program. Female employees have the right to take one hour off every day to nurse a child under the age of nine months. This may be broken down into two half-hour segments.

Beginning January 1, 2020, leave will be increased to 16 weeks, with the first six weeks being uninterrupted. Neither parent has the ability to transmit this right to the other.

Other leave

Adoption Leave: 6 weeks compulsory and uninterrupted leave for both partners. 16 unpaid weeks in total can be shared between both parents. A maximum of 10 weeks can be taken by one with the remaining 6 weeks being taken by the partner.

Marriage: 15 calendar days

Serious illness or injury of family member: 2 days (4 days if travel is required).

Bereavement: 2 days (4 days if travel is required) for the death of a family member.

Moving: 1 day for moving to a new house.

5. Employment termination

There is no information about employment information for this country.

Termination process

The employer's and employee's rights and obligations in connection with the termination of the employment relationship primarily depend on the form of termination and the provisions of the individual or collective agreement. Employment contracts may be terminated mutually, at the end of the contract period (if it is a fixed-term temporary contract), by the employee, or by the employer for objective, economic, or disciplinary grounds. Individual and collective bargaining agreements may stipulate the circumstances under which an employment relationship will cease.

Fixed-term contracts terminate when the parties agree on an expiration date or when the service is completed. Employees are entitled to compensation of 12 days' wages per year worked at the end of a fixed-term contract. If the temporary contract is longer than one year in duration, the party canceling the contract must give at least 15 days notice.

Employees can end their employment relationship by quitting, either freely or involuntarily, or by abandoning their job, or by being fired for cause. When an employee is let go for cause, he or she is entitled to compensation equal to 33 days of salary for each year of service plus "finiquito."

Employers may remove an employee for any of the objective grounds specified in the Workers' Statute, including employee incompetence, failure to adapt, collective dismissal, or absences from work. Employers must present an employee with a termination letter that details the reason for the employee's dismissal and the date of the employee's final day of employment. Employees are entitled to 15 days' notice and compensation, often known as indemnification. Compensation is 20 days' salary each year of service, up to a maximum of 12 months, at the moment notice is given. Employers may also grant compensation in place of notice.

Employers have the authority to discipline an employee up to and including dismissal for a variety of reasons, including repeated unexcused absences, disobedience, physical or verbal abuse directed at the employer or a coworker, or sexual harassment. The dismissal must occur within 60 days of the employer being aware of the conduct and within six months of the incident. In this case, no remuneration is required, and the employee is not entitled to notice of termination. However, if the employee is a union member, the employer is required to notify the union.

Notice period

Employers are required to provide 15 days' notice, and if notice is not provided, payment in lieu of notice shall be made.

Probation period

The probationary period varies depending on the Collective Agreement in place at the company. The common practice is two months, but graduate technicians are usually probed for a 6 month period.

Severance pay

Employers should compensate employees with 20 days of salary per year of service, up to a maximum of 12 months. If a judge rules that the dismissal was unjust (i.e., without cause), the employer may reinstate the employee or make a statutory severance payment. Employees who are laid off are entitled to a legal severance payment and written notice of the contract's termination in advance. Severance pay is not payable to an employee who is terminated for disciplinary reasons.

6. Working hours

There is no information about the working hours for this country.

General working schedule

In Spain, working hours are generally determined by individual or collective bargaining, but cannot exceed 40 hours per week on average over a year. In the absence of an agreement specifying how irregular work hours will be scheduled, the employer may allocate a maximum of 10% of working hours throughout the year. Working hours are generally limited to nine hours per day, unless otherwise agreed upon collectively or individually.

Overtime

Collective bargaining agreements typically cover overtime policies. Overtime hours should not exceed 80 hours per year, as specified by law.

Overtime can be compensated by paying a higher rate than the employee's salary or by substituting an equivalent paid rest period for the hours worked.

7. Minimum wage

There is no information about the working hours for this country.

For full-time workers, the monthly minimum salary is 950.00 EUR, or 7.04 EUR per hour.

8. Employee benefits

There is no information about the working hours for this country.

Social security taxes are used to finance health insurance. An employer may offer supplemental health insurance to an employee as a perk. Most executives seek additional health and life insurance, and a small firm may provide a stipend in place of obtaining insurance.

Employees are given 15 days (including weekends) to marry, 2 days to mourn the loss of a family member, and 1 day to relocate.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

In Spain, the overall corporate income tax rate is 25%. Other tax rates may apply based on the kind of corporation taxed and the nature of its operation. Resident corporations are taxed on their global earnings.

Non-resident income tax (NRIT) is levied at a 25% rate on revenue that may be assigned to a foreign company's permanent establishment (PE) in Spain.

Individual income tax

After deducting the legal allowances, reductions, and deductions from the gross income, the taxpayer must apply the rate to determine the actual tax.

The income tax has been modified and simplified as of January 1, 2015. It is essential to remember that these rates differ by location. The tariffs listed here are for the Comunidad de Madrid. The regional income tax in Andalusia and Catalonia is greater than in Madrid. In Andalusia and Catalonia, the highest rate of income tax is 49 percent.

For a taxable income from €0 to €12,450, the tax rate is set at 19%.

For a taxable income from €12,450 to €20,200, the tax rate is set at 24%.

For a taxable income from €20,200 to €35,200, the tax rate is set at 30%.

For a taxable income from €35,200 to €60,000, the tax rate is set at 37%.

For a taxable income beyond €60,000, the tax rate is set at 45%.

VAT, GST and sales tax

Spanish VAT is levied on supply of goods and services made inside Spanish VAT area, as well as imports and intra-EU purchases of products and services. There are three distinct rates for various kinds of products and services, which are as follows:

Ordinary rate of 21%, applied on regular supplies of goods and services.

Reduced rate of 10%, applied on basic necessities (e.g. food and agricultural products not included in the ‘super reduced’ 4% rate, dwellings, other qualifying services). Live cultural events and cinema tickets are taxed at the reduced rate of 10% too.

Super reduced rate of 4%, applied on basic necessities other than those classified under the reduced rate (e.g. bread, milk, books, medicine).

Instead of VAT, the Canary Islands levy a separate tax known as the Canary Island General Indirect Tax (IGIC). The standard IGIC rate is 7%, while the other IGIC rates are 0%, 3%, 9.5 percent, and 15%. (20 percent for tobacco). IGIC is similar to VAT, however there are several key distinctions, such as the tax exemption for telecommunications services. This tax is levied on tangible items imported into the Canary Islands.

Sales tax is used instead of VAT in Ceuta and Melilla.

10. VISA and work permits

There is no information about the working hours for this country.

Foreigners with a Work Visa may enter, remain, and work in Spain. An employee must apply in person for a work visa, and applications must be filed at least 90 days before departure.

Employers must apply for a work visa from the Ministry of Labour prior to appointing a candidate for a highly skilled position or if the candidate is a non-EU citizen. After the Ministry of Labour has accepted the application, the Embassy or Consulate will issue the work and residence visa.

Seasonal employees in Spain have a separate Work Visa, although the process for acquiring a visa is the same. Seasonal employees, on the other hand, must demonstrate that they have planned for housing, that their travel expenses are covered, and that they will return to their home country once the task is over.

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

Employment contracts in Spain may be verbal or written and are deemed to exist when work is done for an employer, at the direction of the employer, by a person who is subordinate to the employer, and remuneration is exchanged for the work. At any moment throughout the work relationship, any party to an employment contract might ask the agreement to be codified in writing.

Employers must give workers with written information on the major elements of the contract and the performance of work if the employment relationship lasts more than four weeks. If there is a formal written employment contract, this requirement is met. The following items must be included in the written contract or statement:

Employer and employee identities

Start and end dates (if applicable)

Where the employee will do his or her task

The job's category and/or description

Salary information such as basic salary, bonuses, and any other monthly payments

Working days and hours

Details on vacations, including length and when they are/can be taken

The duration of notice necessary to end the contract

The appropriate collective bargaining agreement

Details about any work to be done in another country

Employees on short-term contracts have the same rights as those on long-term contracts. Employers are required to notify temporary workers about employment openings inside the organization. Changes to the employment contract are permissible. Any modifications must be communicated in writing by the employer within one month of their implementation. In most cases, the employee must concur, and both parties must sign the revised agreement.

All employment contracts made with workers must be reported to the State Public Employment Service (SEPE), Servicio Pblico de Empleo Estatal, within 10 days.

Minimum assignment length

There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.

Payment currency

Euro

13.Opening a subsidiary in Spain

There is no information about the working hours for this country.

How to set up a subsidiary

Setting up a subsidiary in Spain begins with deciding what kind of organization you want to create. There are four major kinds of enterprises in Spain, each with advantages and disadvantages. To determine which is appropriate for you, consider your company operations, registration procedures, minimum capital needs, and degree of commitment to the nation.

The four business possibilities are as follows:

(a) Joint venture

(b) Branch office

(c) Representative office

(d) Corporation

A Sociedad de responsabilidad limitada (S.L.), which is equivalent to a private limited liability corporation, is the most prevalent subsidiary structure. The second form of corporation is a Sociedad Anónima (S.A.), which is the Spanish counterpart of a public limited liability company. An S.L. has more organizational flexibility and requires less money than a S.A.

Spain offers three distinct incorporation procedures, depending on the option you select:

1. Ordinary regime: This regime applies to both a limited liability company and a corporation.

2. Simplified regime: Only applicable to limited liability firms that fulfill specified shareholder, share capital, and management body criteria.

3. Super simplified regime: Only applicable to limited liability firms that fulfill specified shareholder, share capital, and bylaws criteria.

The processes for each regime are identical, and the process for establishing a subsidiary involves the following:

A. Obtain Mercantile Register certification for your planned company's name.

B. Request a Provisional Tax Identification Number (N.I.F.)

C. Establish a bank account in Spain

D. Administer a statement against money laundering and terrorist funding.

E. Sign a public deed in front of a Notary Public and register your business at the Commercial Registry.

F. Obtain a firm N.I.F. after your business has been registered and established.

G. Complete any further notification processes.

Subsidiary laws

If you intend to incorporate your Spanish subsidiary as a S.L., you must meet a number of conditions. Spain subsidiary regulations mandate a minimum investment capital of 3,000 EUR, which must be paid in full at the time of incorporation. The shares of a S.L. are not readily transferable, and the corporation is not permitted to issue bonds.

In terms of management, your S.L. requires a minimum of three directors and a maximum of twelve. There are no nationality or residence restrictions under Spanish subsidiary law. However, the government has stringent accounting and auditing requirements. All businesses must submit yearly financial statements with the Mercantile Register, however some may file shortened financial statements if they meet specific criteria.

13. Why choose Rivermate as your Employer of Record / PEO in Spain

Establishing an entity in

Spain

to hire a team takes time, money, and effort. The labor law in

Spain

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Spain

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Spain

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Spain

via our Employer of Record / PEO solution.

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