Rivermate | Spain landscape
Rivermate | Spain

Spain

499 EURper employee/month

Discover everything you need to know about Spain

Hire in Spain at a glance

Here ares some key facts regarding hiring in Spain

Capital
Madrid
Currency
Euro
Language
Spanish
Population
46,754,778
GDP growth
3.05%
GDP world share
1.62%
Payroll frequency
Monthly
Working hours
40 hours/week

Overview in Spain

Spain's 2025 recruitment landscape is driven by economic recovery and sector growth in technology, tourism, renewable energy, manufacturing, and healthcare. The job market is competitive, with decreasing unemployment and high demand for STEM, multilingual, and digital skills, especially in major cities like Madrid, Barcelona, and Valencia.

Effective hiring involves leveraging online platforms such as Infojobs, LinkedIn, and Indeed, along with recruitment agencies, university partnerships, and networking events. The typical hiring process spans 4 to 8 weeks, including screening, interviews, background checks, and onboarding. Salary ranges vary by role and city, with software developers earning €45,000–60,000 annually, marketing managers €40,000–55,000, and renewable energy engineers €42,000–58,000.

Role Average Salary (EUR)
Software Developer 45,000 – 60,000
Marketing Manager 40,000 – 55,000
Renewable Energy Engineer 42,000 – 58,000

Key candidate preferences include work-life balance, career development, inclusive culture, and benefits. Regional differences influence recruitment strategies, with Madrid focusing on tech and finance, Barcelona on innovation, Valencia on manufacturing and tourism, and Andalusia on tourism and agriculture. Challenges such as talent competition, bureaucracy, regional variation, and language barriers require tailored solutions like competitive compensation, legal partnerships, regional research, and bilingual recruitment.

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Employer of Record Guide for Spain

Your step-by-step guide to hiring, compliance, and payroll management in Spain with EOR solutions.

Responsibilities of an Employer of Record

As an Employer of Record in Spain, Rivermate is responsible for:

  • Creating and managing the employment contracts
  • Running the monthly payroll
  • Providing local and global benefits
  • Ensuring 100% local compliance
  • Providing local HR support

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for:

  • Day-to-day management of the employee
  • Work assignments
  • Performance management
  • Training and development

Taxes in Spain

In Spain, employers must fulfill several tax obligations, including social security contributions and income tax withholding. Employers are responsible for contributing to social security based on employee gross salaries, with key rates for 2025 as follows:

Contribution Type Rate (%)
Common Contingencies 23.60
Unemployment 5.50-6.70
Professional Training 0.60
Wage Guarantee Fund 0.20
Occupational Accidents Varies (0.9-7.15)

Additionally, employers must withhold income tax (IRPF) from employees' salaries, with progressive rates depending on income levels and regional adjustments:

Taxable Base (€) Rate (%)
Up to 12,450 19
12,450-20,200 24
20,200-35,200 30
35,200-60,000 37
60,000-300,000 45
Over 300,000 47

Employees can claim deductions such as personal allowances, pension contributions, housing expenses, and regional incentives, which reduce taxable income.

Employers must adhere to strict reporting deadlines: social security contributions are paid monthly, quarterly income tax withholding returns (Modelo 111) are due in April, July, October, and January, and an annual summary (Modelo 190) is due by January 31. Companies also file an annual corporate tax return by July 25. For foreign entities, additional considerations include non-resident income tax at 24%, special regimes like the Beckham Law, transfer pricing rules, and VAT registration requirements. Ensuring compliance often requires professional advice, especially for foreign workers and companies operating in Spain.

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Leave in Spain

Spain's labor law guarantees employees a minimum of 30 calendar days (approximately 22 working days) of paid annual vacation, with the timing typically agreed upon between employer and employee, and notice given at least two months in advance. Collective bargaining agreements often enhance these entitlements. Employees also benefit from 14 national public holidays annually, with regional and local holidays varying by location.

Sick leave requires a medical certificate within three days, with social security providing between 60-75% of salary depending on the duration. Parental leave includes 16 weeks paid maternity and paternity leave, both at 100% salary, with flexibility for additional time within the first year. Other leave types include bereavement, marriage, study, sabbaticals, legal obligations, and union activities, often governed by collective agreements.

Leave Type Duration / Details Compensation / Conditions
Annual Vacation 30 days (approx. 22 workdays), accrued over 12 months Paid; notice 2 months in advance
Public Holidays 14 national holidays (e.g., Jan 1, Jan 6, Dec 25) Non-working days; regional/local vary
Sick Leave 4-20 days: 60%; 21+ days: 75% Medical certificate required; social security pays
Maternity Leave 16 weeks, extendable for multiples 100% salary from Social Security
Paternity Leave 16 weeks, non-transferable 100% salary from Social Security
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Benefits in Spain

Spain's employee benefits are governed by statutory requirements, collective agreements, and evolving expectations. Employers must provide mandatory benefits such as social security contributions covering healthcare, unemployment, and pensions; at least 30 days of paid vacation plus public holidays; paid sick leave; and 16 weeks each of paid maternity and paternity leave. Additionally, employees typically receive two extra salary payments annually—Christmas and summer bonuses, each roughly equivalent to one month’s salary. Severance pay is also mandated upon termination, depending on circumstances and tenure.

Beyond mandatory benefits, many employers enhance packages with optional perks like supplemental private health insurance, life insurance, occupational pension plans, meal vouchers, transportation allowances, childcare support, training programs, and Employee Assistance Programs (EAPs). Spain’s healthcare system combines universal public coverage with private options; employers often sponsor private health insurance to improve access and reduce wait times. Retirement benefits include the state pension, based on contribution history, and occupational pension schemes, which vary by employer.

Benefit offerings differ by company size and industry. Large firms tend to provide comprehensive packages, including health and pension plans, while SMEs may focus on core statutory benefits. Technology companies often offer stock options and flexible work, whereas manufacturing firms may tailor benefits to occupational health risks. This landscape underscores the importance for employers to design competitive, compliant benefits packages aligned with industry standards and regional practices.

Benefit Type Key Details
Mandatory Contributions Social Security, paid vacation (30 days), public holidays, sick leave, maternity/paternity (16 weeks each)
Bonus Payments 2 extra salaries/year (Christmas and summer)
Severance Pay Based on reason for termination and tenure
Optional Benefits Supplemental health insurance, life insurance, pension plans, meal vouchers, transport allowances, childcare, training, EAPs
Healthcare System Public healthcare + private insurance (employer-sponsored common)
Retirement System State pension + occupational pension plans
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Workers Rights in Spain

Spain's labor laws, primarily governed by the Workers' Statute, provide strong protections for workers, including rights related to termination, discrimination, working conditions, and health and safety. Employers must adhere to specific procedures for dismissals, with notice periods varying by reason: none for disciplinary dismissals, 15 days for objective dismissals, and severance pay of 20 days' salary per year (capped at 12 months) for the latter. Employees can challenge dismissals in court, which may result in reinstatement or compensation if deemed unfair.

Anti-discrimination laws prohibit bias based on characteristics such as race, gender, age, disability, and others across all employment aspects. Enforcement is carried out by labor inspectors and courts, with violations leading to fines and compensation obligations. Working conditions are regulated with a standard 40-hour workweek, minimum rest of 12 hours daily, and at least 30 days of paid annual leave. Health and safety regulations mandate risk assessments, training, PPE, and employee rights to refuse unsafe work. Dispute resolution includes internal procedures, mediation, arbitration, and judicial proceedings, ensuring accessible avenues for workplace issues.

Key Data Point Details
Standard Workweek 40 hours
Notice for Objective Dismissal 15 days
Severance Pay 20 days' salary/year (max 12 months)
Paid Vacation 30 days/year
Rest Periods 12 hours daily, 1.5 days weekly
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Agreements in Spain

Employment agreements in Spain are legally binding contracts governed by the Workers' Statute, establishing minimum employee rights and employer obligations. Employers must comply with specific legal requirements, including mandatory clauses, probation periods, confidentiality, non-compete clauses, and regulations on contract modifications and terminations to avoid penalties and legal disputes.

Spanish labor law recognizes mainly two contract types: indefinite and fixed-term. Indefinite contracts are open-ended, providing full employee rights and severance pay if terminated without just cause. Fixed-term contracts are for specific durations or projects, with stricter regulations and limitations on renewals. Employers should understand these categories and their legal implications to ensure compliance and proper workforce management.

Contract Type Description Key Features
Indefinite Contract Open-ended, no specified end date Full rights, severance pay, stability
Fixed-term Contract Limited duration, specific project or time frame Renewal restrictions, specific purpose
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Remote Work in Spain

Remote work in Spain has expanded significantly, driven by technological advances and a focus on work-life balance. The legal framework, notably Law 10/2021, defines remote work as regular work outside the employer’s premises using technology, with employers responsible for providing equipment, ensuring safety, and covering related expenses. Employees have the right to request remote work, which employers must consider in good faith, and a written agreement outlining terms is typically required.

Flexible arrangements such as flextime, compressed workweeks, job sharing, telecommuting, and part-time work are increasingly adopted to enhance work-life balance. Companies must also comply with GDPR for data security, implementing secure access, data processing agreements, and employee training. Clear policies on equipment provision and expense reimbursement are vital, with employers often supplying necessary tools or stipends. A strong technology infrastructure—including high-speed internet, collaboration tools, cloud solutions, and IT support—is essential for effective remote work.

Key Data Points Details
Legal Framework Law 10/2021, employee rights to request remote work, employer obligations
Employee Rights Request remote work, written agreements required
Flexible Arrangements Flextime, compressed workweek, job sharing, telecommuting, part-time
Data Security VPNs, encryption, multi-factor authentication, GDPR compliance
Equipment & Expenses Employer-provided or stipend-based equipment, reimbursements for internet, office setup
Infrastructure Needs High-speed internet, collaboration tools, cloud solutions, IT support
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Working Hours in Spain

Spain's labor laws establish a standard 40-hour workweek, with daily hours typically limited to 9, unless collective agreements specify otherwise. Overtime is regulated, with a maximum of 80 hours annually, and must be compensated either through pay at a minimum rate equal to regular hours or via time off. Employers are legally required to maintain accurate records of working hours for at least four years, ensuring compliance with regulations on standard hours, overtime, and rest periods.

Employees are entitled to minimum rest periods: 12 hours daily, 36 hours weekly, and a 15-minute break if daily work exceeds 6 hours. Night shift work (10 PM–6 AM) is subject to specific limits, including an average of 8 hours per day over 15 days, with additional health and safety protections. Weekend work often commands higher pay or extra time off, as stipulated in collective agreements.

Key Data Point Details
Standard Weekly Hours 40 hours
Daily Working Hours Generally up to 9 hours, unless collective agreement states otherwise
Overtime Limit 80 hours/year (unless specified otherwise)
Overtime Compensation At least equal to regular rate or time off; or in lieu of payment
Rest Periods 12 hours daily, 36 hours weekly, 15-minute break over 6 hours of work
Night Shift Hours Max 8 hours/day over 15 days, with additional health and safety measures
Record Keeping Duration At least 4 years
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Salary in Spain

Spain's salary landscape varies significantly by industry, role, and location, with major cities like Madrid and Barcelona offering higher compensation. For example, annual salaries for key roles range from €20,000 for customer service reps to €75,000 for data scientists, with technology and finance sectors experiencing the highest pay. Employers should consider regional differences and industry standards to remain competitive.

The statutory minimum wage in Spain, known as Salario Mínimo Interprofesional (SMI), was €1,134 gross per month in 2024, paid over 14 installments (€1,323 in 12). Employers must ensure wages meet or exceed this minimum, with collective agreements potentially setting higher standards. Bonuses such as Christmas and summer payments, productivity incentives, and allowances for transportation, meals, and housing are common components of compensation packages.

Key Data Point Value/Details
2024 Minimum Wage €1,134/month (14 installments), €1,323/month (12 installments)
Typical Salary Range (EUR/year) Software Engineer: €35,000–€65,000; Data Scientist: €45,000–€75,000; Customer Service: €20,000–€35,000
Payroll Cycle Monthly (end of month), some bi-weekly options
Payment Method Direct bank transfer (most common), cheques
Future Trends Rising tech salaries, focus on employee well-being, performance-based pay, inflation impact, remote work adjustments

Salary trends for 2025 suggest continued growth, especially in high-demand sectors like technology, driven by inflation, cost of living increases, and evolving work arrangements. Employers should adapt compensation strategies to attract and retain talent effectively.

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Termination in Spain

In Spain, employee termination is highly regulated, with strict procedural and substantive requirements favoring employee protections. Employers must adhere to specific notice periods based on contract type and reason for dismissal, with some cases requiring no notice (e.g., disciplinary dismissals), while objective dismissals mandate a 15-day notice. Employers can opt to pay in lieu of notice, which includes salary and benefits for the notice period.

Severance pay varies by dismissal reason: objective dismissals entitle employees to 20 days' salary per year (capped at 12 months), while unfair dismissals require 33 days' salary per year (capped at 24 months). No severance is owed for justified disciplinary dismissals or dismissals due to employee incapacity or death. Proper documentation, adherence to procedural steps, and valid grounds are essential; failure to comply can lead to unfair dismissal claims, with remedies including reinstatement or severance payments.

Dismissal Type Notice Period Severance Pay Key Conditions
Disciplinary (Justified) None None Serious breach of contract
Objective (Economic, Technical, Organizational, Production) 15 days 20 days/year (max 12 months) Genuine, documented reasons
Unfair None 33 days/year (max 24 months) Failure to justify or procedural errors
Collective Dismissal Negotiated process As above, depending on case Requires consultation and approval

Employers must provide detailed written notices, maintain documentation, and follow specific procedures for each dismissal type. Employees have 20 working days to challenge dismissals in court, with potential remedies including reinstatement or severance, depending on the case. Common pitfalls include inadequate notice, vague reasons, procedural errors, discrimination, or retaliation, which can result in null or unfair dismissal declarations and significant penalties.

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Freelancing in Spain

Spain's freelancing sector is expanding, driven by demand for flexible work and specialized skills. Employers must understand legal distinctions between employees and independent contractors to avoid misclassification risks, which can lead to penalties. Key differences include dependency, subordination, integration, ownership of tools, and risk, summarized below:

Feature Employee Independent Contractor
Dependency High Low
Subordination Yes No
Integration Yes No
Tools/Equipment Company's Contractor's
Risk/Reward Fixed salary/wage Profit/Loss

Contractors typically operate under a contrato de prestación de servicios, detailing scope, payment, termination, confidentiality, IP rights, and jurisdiction. IP rights generally belong to the creator unless explicitly assigned, with moral rights protected under law. Contractors must register as autónomo, handling VAT (21%), income tax, and social security contributions, summarized as:

Tax/Contribution Frequency Rate/Calculation
VAT (IVA) Quarterly 21% standard rate
Income Tax (IRPF) Annually Based on taxable income
Social Security Monthly Based on chosen contribution base

Industries utilizing freelancers include technology, marketing, consulting, creative arts, and education, with roles ranging from software development to content creation and tutoring.

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Health & Safety in Spain

Spain emphasizes workplace health and safety through a comprehensive legal framework aligned with EU directives, ensuring a harmonized approach across industries. The core legislation is Law 31/1995, complemented by regulations on prevention services, safety provisions, signage, and PPE. Employers are legally required to conduct risk assessments, implement preventive measures, develop emergency plans, provide health surveillance, and ensure employee training to maintain a safe working environment.

The Spanish labor inspectorate enforces compliance through routine or complaint-triggered inspections, assessing adherence to legal standards, risk management effectiveness, emergency preparedness, PPE use, and training adequacy. Non-compliance can result in sanctions, emphasizing the importance for employers to maintain rigorous safety protocols.

Aspect Key Points
Primary Law Law 31/1995 (Prevention of Occupational Risks)
Key Regulations Royal Decree 39/1997, 486/1997, 485/1997, 773/1997
Employer Responsibilities Risk assessment, preventive measures, emergency plans, health surveillance, training
Inspection Focus Legal compliance, risk management, emergency preparedness, PPE, training
Enforcement Authority Inspección de Trabajo y Seguridad Social
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Dispute Resolution in Spain

Spain's employment dispute resolution relies on both judicial and extrajudicial mechanisms, primarily through Social Courts for individual cases and the National Court for collective disputes. Before filing lawsuits, parties must typically attempt mandatory conciliation facilitated by a conciliator, aiming to resolve conflicts without litigation.

Key data points include:

Aspect Details
Main Forums Social Courts (individual disputes), National Court (collective disputes)
Mandatory Process Conciliation before lawsuit initiation
Jurisdiction Social Courts: Employment disputes; National Court: Collective disputes

Effective conflict management and legal compliance are vital for business success, requiring understanding of labor laws, reporting procedures, and adherence to international standards. This framework aims to protect employee rights while ensuring employers maintain a compliant and positive work environment.

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Cultural Considerations in Spain

Spain's business culture blends traditional values with modern practices, emphasizing relationship-building, respect for hierarchy, and cultural norms. Communication tends to be direct yet polite, with importance placed on nonverbal cues like eye contact and formal titles, especially initially. Negotiations require patience, trust, and face-to-face interactions, with a focus on clear, written agreements and flexibility in approach.

Hierarchical structures are prominent, with deference to authority and adherence to the chain of command. Building personal relationships through socializing and informal interactions is crucial for success. Spanish holidays, such as New Year's Day, Epiphany, Labor Day, and regional celebrations, can impact business operations, so planning ahead is essential.

Key Data Points Details
Important Holidays Jan 1, 6; May 1; Aug 15; Oct 12; Nov 1; Dec 6, 8, 25
Negotiation Tips Patience, trust, face-to-face, clear documentation, flexibility
Hierarchy Respect for authority, formal titles, top-down decision-making
Communication Direct but relationship-focused, use of formal titles, eye contact
Cultural Norms Personal connections, socializing, gift-giving, family interest
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Frequently Asked Questions in Spain

Who handles the filing and payment of employees' taxes and social insurance contributions when using an Employer of Record in Spain?

When using an Employer of Record (EOR) in Spain, the EOR handles the filing and payment of employees' taxes and social insurance contributions. This includes the calculation, withholding, and remittance of income taxes to the Spanish tax authorities, as well as the management of social security contributions. The EOR ensures compliance with Spanish labor laws and regulations, thereby relieving the client company of the administrative burden and complexities associated with these tasks. This allows the client company to focus on its core business activities while ensuring that all legal and regulatory requirements are met in Spain.

Is it possible to hire independent contractors in Spain?

Yes, it is possible to hire independent contractors in Spain. However, there are specific regulations and considerations that employers must be aware of to ensure compliance with Spanish labor laws.

  1. Legal Framework: Independent contractors in Spain are governed by the Spanish Civil Code and the Commercial Code, rather than the Workers' Statute, which applies to employees. This distinction is crucial because it affects the rights and obligations of both parties.

  2. Contractual Agreement: When hiring an independent contractor, it is essential to have a well-drafted contract that clearly outlines the scope of work, payment terms, duration, and other relevant conditions. This contract should emphasize the contractor's independence and the absence of an employer-employee relationship.

  3. Autonomy and Control: Independent contractors must have a significant degree of autonomy in how they perform their work. They should not be subject to the same level of control and supervision as employees. This includes having the freedom to set their own schedules and use their own tools and resources.

  4. Tax and Social Security: Independent contractors are responsible for their own tax filings and social security contributions. They must register with the Spanish tax authorities (Agencia Tributaria) and the social security system (Seguridad Social) as self-employed individuals (autónomos). Employers should ensure that contractors provide proof of their registration and compliance with these obligations.

  5. Risk of Misclassification: Misclassifying an employee as an independent contractor can lead to significant legal and financial consequences. Spanish labor authorities may reclassify the relationship as employment if they determine that the contractor is, in fact, functioning as an employee. This can result in back payments for social security contributions, taxes, and potential fines.

  6. Benefits of Using an Employer of Record (EOR): To mitigate the risks and complexities associated with hiring independent contractors in Spain, many companies opt to use an Employer of Record (EOR) service like Rivermate. An EOR can handle all aspects of compliance, including contracts, tax filings, and social security contributions, ensuring that the relationship is correctly classified and managed according to Spanish law. This allows companies to focus on their core business activities while minimizing legal risks.

In summary, while it is possible to hire independent contractors in Spain, it requires careful attention to legal and regulatory requirements. Using an EOR service can provide peace of mind and ensure compliance with Spanish labor laws.

What options are available for hiring a worker in Spain?

In Spain, employers have several options for hiring workers, each with its own set of legal and administrative requirements. Here are the primary methods:

  1. Direct Employment:

    • Permanent Contracts (Contrato Indefinido): This is the most common type of employment contract in Spain. It offers job security to employees and includes full benefits as mandated by Spanish labor laws.
    • Temporary Contracts (Contrato Temporal): These contracts are used for specific projects or seasonal work and have a defined end date. They are subject to strict regulations to prevent abuse.
    • Part-Time Contracts (Contrato a Tiempo Parcial): These contracts are for employees who work fewer hours than the standard full-time schedule. They must clearly state the number of hours and the distribution of work time.
    • Internship Contracts (Contrato en Prácticas): These are for recent graduates and are designed to provide practical experience in their field of study. They have specific duration limits and salary requirements.
  2. Freelancers (Autónomos):

    • Hiring freelancers or independent contractors is another option. Freelancers in Spain must register as self-employed (autónomos) and are responsible for their own taxes and social security contributions. This option provides flexibility but requires careful compliance with Spanish labor laws to avoid misclassification.
  3. Temporary Employment Agencies (Empresas de Trabajo Temporal, ETT):

    • These agencies provide temporary workers to companies for short-term needs. The agency is the legal employer, handling payroll, taxes, and compliance, while the client company supervises the work.
  4. Outsourcing:

    • Companies can outsource specific functions or projects to third-party service providers. This can be a cost-effective way to access specialized skills without the complexities of direct employment.
  5. Employer of Record (EOR):

    • An EOR like Rivermate can be an excellent solution for companies looking to hire in Spain without establishing a legal entity. The EOR acts as the legal employer, handling all aspects of employment, including payroll, taxes, benefits, and compliance with Spanish labor laws. This allows companies to quickly and efficiently hire talent in Spain while minimizing administrative burdens and legal risks.

Benefits of Using an Employer of Record in Spain:

  • Compliance: Ensures full compliance with Spanish labor laws, which can be complex and subject to frequent changes.
  • Speed: Accelerates the hiring process, allowing companies to onboard employees quickly without the need to set up a local entity.
  • Cost-Effective: Reduces the costs associated with establishing and maintaining a legal entity in Spain.
  • Focus: Allows companies to focus on their core business activities while the EOR handles HR, payroll, and legal compliance.
  • Flexibility: Provides the flexibility to scale the workforce up or down based on business needs without long-term commitments.

Using an EOR like Rivermate can be particularly advantageous for companies entering the Spanish market for the first time or those looking to expand their operations without the complexities of local employment regulations.

What is the timeline for setting up a company in Spain?

Setting up a company in Spain involves several steps and can take a considerable amount of time, often ranging from one to three months, depending on the complexity of the business and the efficiency of the processes. Here is a detailed timeline for setting up a company in Spain:

  1. Obtain a Foreigner’s Identification Number (NIE) (1-2 weeks):

    • Non-Spanish nationals must obtain an NIE, which is required for any legal or financial transactions in Spain. This can be done at a Spanish consulate abroad or at the local police station in Spain.
  2. Certify the Company Name (3-5 days):

    • You need to obtain a certificate from the Central Commercial Registry (Registro Mercantil Central) to ensure that your chosen company name is unique and not already in use.
  3. Open a Bank Account and Deposit Capital (1-2 weeks):

    • Open a corporate bank account in Spain and deposit the minimum share capital required for your type of company (e.g., €3,000 for a limited liability company). The bank will provide a certificate of deposit.
  4. Draft the Articles of Association (1-2 weeks):

    • Prepare the company’s Articles of Association, which outline the company’s structure, purpose, and regulations. This document must be notarized.
  5. Sign the Deed of Incorporation (1-2 weeks):

    • The company founders must sign the Deed of Incorporation before a notary public. This document includes the Articles of Association and the certificate of the bank deposit.
  6. Register the Company with the Commercial Registry (2-4 weeks):

    • Submit the notarized Deed of Incorporation to the local Commercial Registry (Registro Mercantil) for registration. This process can take a few weeks.
  7. Obtain a Tax Identification Number (CIF) (1-2 weeks):

    • Apply for a CIF (Código de Identificación Fiscal) from the Spanish Tax Agency (Agencia Tributaria). This number is essential for tax purposes.
  8. Register for Social Security (1-2 weeks):

    • Register the company with the Spanish Social Security system (Tesorería General de la Seguridad Social) to ensure compliance with employee social security contributions.
  9. Notify the Local Authorities (1-2 weeks):

    • Inform the local town hall (Ayuntamiento) of the commencement of business activities. Depending on the type of business, you may need additional licenses or permits.
  10. Register for VAT (1-2 weeks):

    • If applicable, register for Value Added Tax (VAT) with the Spanish Tax Agency.

Given the complexity and the number of steps involved, the entire process can take anywhere from one to three months. However, using an Employer of Record (EOR) service like Rivermate can significantly streamline this process. An EOR can handle many of these administrative tasks on your behalf, allowing you to focus on your core business activities and ensuring compliance with local laws and regulations. This can reduce the setup time and mitigate the risks associated with navigating the Spanish legal and bureaucratic landscape.

What are the costs associated with employing someone in Spain?

Employing someone in Spain involves several costs that employers need to consider. These costs can be broadly categorized into direct salary costs, social security contributions, and other mandatory benefits and expenses. Here is a detailed breakdown:

  1. Gross Salary: This is the base salary agreed upon with the employee. It includes the employee's gross earnings before any deductions for taxes or social security contributions.

  2. Social Security Contributions: Employers in Spain are required to make significant contributions to the social security system. As of 2023, the employer's contribution rate is approximately 29.9% of the employee's gross salary. This covers various benefits such as healthcare, pensions, unemployment insurance, and other social benefits.

  3. Employee Social Security Contributions: While this is deducted from the employee's salary, it is important to note that the employer is responsible for withholding and remitting these contributions. The employee's contribution rate is around 6.35% of their gross salary.

  4. Severance Pay: In Spain, severance pay is mandatory in cases of unfair dismissal or redundancy. The amount varies depending on the length of service and the reason for termination. Typically, it can range from 20 to 33 days of salary per year of service.

  5. Holiday Pay: Employees in Spain are entitled to a minimum of 30 calendar days of paid annual leave. This cost must be factored into the overall employment expenses.

  6. Public Holidays: Spain has several public holidays, and employees are entitled to paid leave on these days. The number of public holidays can vary by region but generally includes around 14 days per year.

  7. Sick Leave: Employers are required to pay for the first 15 days of an employee's sick leave. After this period, social security covers the cost, but the employer must still manage the administrative aspects.

  8. Other Benefits: Depending on the industry and collective bargaining agreements, employers may need to provide additional benefits such as meal vouchers, transportation allowances, or private health insurance.

  9. Payroll Management: Managing payroll in Spain can be complex due to the various legal requirements and contributions. Employers may need to invest in payroll software or outsource payroll management to ensure compliance.

  10. Training and Development: Employers may also incur costs related to training and development programs to ensure that employees are adequately skilled and compliant with industry standards.

Using an Employer of Record (EOR) like Rivermate can help manage these costs more efficiently. An EOR handles all aspects of employment, including payroll, tax compliance, and benefits administration, ensuring that employers remain compliant with Spanish labor laws while reducing the administrative burden and potential risks associated with direct employment.

How does Rivermate, as an Employer of Record in Spain, ensure HR compliance?

Rivermate, as an Employer of Record (EOR) in Spain, ensures HR compliance through several key mechanisms:

  1. Local Expertise and Knowledge: Rivermate employs local HR professionals who are well-versed in Spanish labor laws, regulations, and cultural nuances. This local expertise ensures that all employment practices are compliant with national and regional legislation.

  2. Employment Contracts: Rivermate prepares and manages employment contracts that comply with Spanish labor laws. These contracts include all mandatory clauses, such as job description, salary, working hours, and termination conditions, ensuring that both the employer and employee are protected under Spanish law.

  3. Payroll Management: Rivermate handles payroll processing in accordance with Spanish regulations. This includes calculating and withholding the correct amount of taxes, social security contributions, and other statutory deductions. They also ensure timely and accurate salary payments to employees.

  4. Tax Compliance: Rivermate ensures that all tax obligations are met, including corporate taxes, employee income taxes, and social security contributions. They stay updated on any changes in tax laws and regulations to ensure ongoing compliance.

  5. Employee Benefits Administration: Rivermate manages statutory benefits such as health insurance, pensions, and paid leave, ensuring that all benefits provided to employees meet or exceed the requirements set by Spanish law.

  6. Labor Relations: Rivermate assists in managing labor relations, including compliance with collective bargaining agreements and handling any disputes or grievances in accordance with Spanish labor laws.

  7. Health and Safety Regulations: Rivermate ensures that all workplace health and safety regulations are adhered to, providing a safe working environment for employees. This includes compliance with the Occupational Risk Prevention Law (Ley de Prevención de Riesgos Laborales).

  8. Termination and Severance: Rivermate manages the termination process in compliance with Spanish labor laws, ensuring that any dismissals are conducted legally and that severance payments are calculated and disbursed correctly.

  9. Continuous Monitoring and Updates: Rivermate continuously monitors changes in Spanish employment laws and regulations. They update their practices and policies accordingly to ensure ongoing compliance and mitigate any legal risks for their clients.

By leveraging Rivermate's comprehensive EOR services, companies can confidently expand their operations in Spain, knowing that all HR and employment-related matters are handled in full compliance with local laws and regulations.

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

HR compliance in Spain refers to the adherence to the country's labor laws, regulations, and standards that govern the employment relationship between employers and employees. This includes a wide range of legal requirements such as employment contracts, working hours, minimum wage, social security contributions, health and safety regulations, anti-discrimination laws, and employee benefits.

Key Components of HR Compliance in Spain:

  1. Employment Contracts: Spanish labor law mandates that employment contracts must be provided in writing and should clearly outline the terms and conditions of employment, including job role, salary, working hours, and duration of the contract.

  2. Working Hours and Overtime: The standard working week in Spain is 40 hours. Any work beyond this is considered overtime and must be compensated at a higher rate. There are also specific regulations regarding rest periods and annual leave.

  3. Minimum Wage: Spain has a legally mandated minimum wage that employers must adhere to. This is reviewed and adjusted periodically by the government.

  4. Social Security Contributions: Employers in Spain are required to make social security contributions on behalf of their employees. This covers various benefits such as healthcare, unemployment insurance, and pensions.

  5. Health and Safety Regulations: Employers must ensure a safe working environment and comply with occupational health and safety standards. This includes conducting risk assessments and providing necessary training and protective equipment.

  6. Anti-Discrimination Laws: Spanish law prohibits discrimination based on gender, age, race, religion, disability, or sexual orientation. Employers must ensure equal treatment and opportunities for all employees.

  7. Employee Benefits: Employers are required to provide certain benefits, such as paid annual leave, maternity/paternity leave, and sick leave.

Importance of HR Compliance in Spain:

  1. Legal Protection: Compliance with HR laws protects the company from legal disputes and potential lawsuits. Non-compliance can result in significant fines, penalties, and damage to the company's reputation.

  2. Employee Satisfaction and Retention: Adhering to labor laws ensures fair treatment of employees, which can lead to higher job satisfaction, increased morale, and better retention rates.

  3. Operational Efficiency: Understanding and complying with local labor laws helps in smooth business operations and avoids disruptions caused by legal issues or employee grievances.

  4. Reputation Management: Companies that are known for compliance with labor laws are more likely to attract top talent and maintain a positive reputation in the market.

  5. Risk Mitigation: Compliance helps in identifying and mitigating risks associated with employment practices, thereby ensuring long-term sustainability of the business.

Role of an Employer of Record (EOR) like Rivermate:

Using an Employer of Record (EOR) service like Rivermate can significantly simplify HR compliance in Spain. An EOR takes on the legal responsibilities of employment, ensuring that all local labor laws and regulations are met. This includes managing payroll, taxes, benefits, and compliance with employment laws. By partnering with an EOR, companies can focus on their core business activities while ensuring that they remain compliant with Spanish labor laws, thereby reducing the risk of legal issues and enhancing operational efficiency.

Do employees receive all their rights and benefits when employed through an Employer of Record in Spain?

Yes, employees in Spain receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. An EOR ensures compliance with local labor laws and regulations, which is crucial in a country like Spain with its comprehensive labor legislation. Here are some key aspects:

  1. Employment Contracts: The EOR provides legally compliant employment contracts that adhere to Spanish labor laws, ensuring that all terms and conditions of employment are clearly defined and legally binding.

  2. Social Security and Taxes: The EOR handles the registration of employees with the Spanish social security system and ensures that all necessary contributions are made. This includes both employer and employee contributions to social security, health insurance, and other mandatory benefits.

  3. Payroll Management: The EOR manages payroll processing, ensuring that employees are paid accurately and on time. This includes calculating and withholding the appropriate taxes, social security contributions, and other deductions as required by Spanish law.

  4. Employee Benefits: Employees are entitled to statutory benefits such as paid vacation, sick leave, maternity/paternity leave, and public holidays. The EOR ensures that these benefits are provided in accordance with Spanish labor laws.

  5. Work Hours and Overtime: The EOR ensures compliance with regulations regarding working hours, rest periods, and overtime pay. In Spain, the standard workweek is 40 hours, and any overtime must be compensated according to legal requirements.

  6. Health and Safety: The EOR is responsible for ensuring that the workplace complies with health and safety regulations, providing a safe working environment for employees.

  7. Termination and Severance: In the event of termination, the EOR ensures that the process is handled in accordance with Spanish labor laws, including the provision of any required notice periods and severance payments.

  8. Employee Representation: The EOR respects the rights of employees to join trade unions and participate in collective bargaining, as protected under Spanish labor laws.

By using an EOR like Rivermate, companies can ensure that their employees in Spain receive all the rights and benefits they are entitled to under local law, while also simplifying the complexities of international employment compliance.

What legal responsibilities does a company have when using an Employer of Record service like Rivermate in Spain?

When a company uses an Employer of Record (EOR) service like Rivermate in Spain, the EOR assumes many of the legal responsibilities associated with employment. Here are the key legal responsibilities and benefits for the company:

  1. Compliance with Spanish Labor Laws: The EOR ensures that all employment practices comply with Spanish labor laws, including contracts, working hours, minimum wage, and termination procedures. This helps the company avoid legal pitfalls and penalties associated with non-compliance.

  2. Payroll Management: The EOR handles payroll processing, ensuring that employees are paid accurately and on time. This includes calculating salaries, withholding taxes, and making social security contributions as required by Spanish law.

  3. Tax Compliance: The EOR is responsible for ensuring that all tax obligations are met. This includes withholding the appropriate amount of income tax from employees' salaries and remitting it to the Spanish tax authorities.

  4. Social Security Contributions: In Spain, employers must contribute to the social security system on behalf of their employees. The EOR manages these contributions, ensuring that they are calculated correctly and paid on time.

  5. Employment Contracts: The EOR drafts and manages employment contracts in accordance with Spanish law. This includes ensuring that contracts are in the appropriate format, contain all necessary terms and conditions, and are compliant with local regulations.

  6. Employee Benefits: The EOR administers employee benefits as required by Spanish law, such as health insurance, pension plans, and paid leave. They ensure that these benefits are provided in accordance with legal requirements and company policies.

  7. Workplace Safety and Health: The EOR is responsible for ensuring that workplace safety and health regulations are followed. This includes implementing necessary measures to prevent workplace accidents and illnesses, and complying with occupational health and safety standards.

  8. Termination and Severance: If an employee needs to be terminated, the EOR handles the process in compliance with Spanish labor laws. This includes providing the appropriate notice period, calculating severance pay, and ensuring that all legal requirements are met.

  9. Record Keeping: The EOR maintains accurate records of employment, payroll, taxes, and benefits. This is crucial for compliance with Spanish regulations and for any audits or inspections by local authorities.

  10. Legal Representation: In case of any legal disputes or issues related to employment, the EOR can represent the company and handle the legal proceedings in Spain. This reduces the legal burden on the company and ensures that local legal expertise is applied.

By using an EOR like Rivermate in Spain, a company can focus on its core business activities while the EOR manages the complex and time-consuming aspects of employment law compliance. This not only mitigates legal risks but also streamlines the process of hiring and managing employees in Spain.