Employer of Record in Spain

How an Employer of Record works in Spain

In Spain, an Employer of Record hires employees on behalf of international clients without a legal entity in the country. An EOR provider, like Rivermate, becomes the legal employer and manages the entire employment relationship under Spanish labor law. We provide you with:

• The guidance of local experts in Spanish labor law.
• Compliant employment contracts.
• Ongoing management of HR administration and compliance.
• Peace of mind knowing your employees are supported locally.

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Spanish labor market: At a glance

The hiring market
Greatest hiring activity:	Madrid and Barcelona
Hiring timelines:	Local: 1-2 days Foreign national: 20-40 days
In-demand sectors:	Artificial intelligence, business intelligence, supply chain management, tech startups, sales, marketing
Sectors with skills shortages:	IT, engineering, healthcare

The salary market
Employer contributions:	30% - 40% of annual gross salary
Annual gross minimum wage:	€18,931
Average gross annual salary:	€29,500 to €31,600
Income tax brackets:	Between 19% and 45%

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Employer costs: The full picture

From an international perspective, hiring in Spain makes sense. It is business-friendly, with deep local and international talent pools. It is also a growing technology, AI and sales hub in the region. But what will the total cost of hiring in Spain be for your company? Answering this question requires looking beyond the base salary to extraordinary payments and employer contributions.

Employee salaries

Salaries in Spain vary by location, industry, job, and the specific skills an employer requires. For example, locals and expats who speak both English and Spanish command higher salaries. In English-speaking cities like Madrid, Barcelona and Valencia, where expat talent pools are large, salaries tend to be significantly higher than elsewhere.

The average annual salary for office-based workers (locals) across Spain is between €30,000 and €38,000, but it can rise significantly when hiring an expat. In-demand positions such as sales managers, country managers, marketing and sales executives, and IT roles earn annual salaries between €30,000 and €60,000+.

According to Spain’s National Statistics Institute (INE), the average gross annual salary in Spain is €29,540, but salaries in major hubs can be much higher. The current figures are:

Location	Estimated gross annual salary range
Madrid	€35,000 - €40,000+
Barcelona	€32,000 - €37,000
Bilbao	€30,000 - €35,000
Valencia	€28,000 - €33,000
Málaga	€25,000 - €32,000

In Spain, candidates with both university degrees and 15+ years of industry experience command premium salaries, often 30%-60% above the national average.

13th and 14th month pay

Spain legally mandates a 14th payment salary structure, requiring employers to make a 13th and 14th extraordinary payment (pagas extraordinarias) alongside the standard 12-month salary. Each payment equals one full month of base salary.

Spanish businesses generally use one of two models to calculate these payments. The example below illustrates how each model works.

Model	Monthly salary	June payment	December payment	Annual total
14 payments	€2,500	€2,500	€2,500	€35,000
12 payments (pro-rated)	€2,916.67	Nil	Nil	€35,000

The biggest exposure is failing to include the two extraordinary payments in the annual total. This can create a back pay liability and Social Security penalties.

Employer Social Security contributions

The Spanish social security system is very strong and provides workers with excellent benefits. Employers are responsible for making contributions as follows:

Contribution	Employer Rate	Notes
Pensions/Healthcare	23.6%	Covers pensions, maternity leave, and illnesses.
Unemployment	5.5%	Funds unemployment benefits.
Salary Guarantee Fund (FOGASA)	0.2%	Protects employees' pay in case of company insolvency.
Vocational Training	0.6%	Supports professional training programs.
Intergenerational Equity Mechanism (MEI)	0.75%	A newer contribution to support the pension system.
Additional Solidarity Contribution	Varies	Applies to earnings exceeding the maximum contribution base.

Statutory leave benefits

Employees in Spain are entitled to minimum statutory leave benefits. Employers may offer more than these minimums, but never less. The main leave benefits are:

• Annual leave: Employees are entitled to 30 days of paid annual leave.
• Sick leave: Employees can take up to 18 months of sick leave. Payment comes from the social security system and depends on the cause of the illness.
• Parental leave: Each parent is entitled to 16 weeks of paid parental leave.

The bottom line: The total employment costs in Spain are high (similar to those in France, Italy, and Belgium). Social security, severance benefits, and a 14-month salary make up the bulk of these costs.

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Calculate employment costs

Use our Employment Cost Calculator to estimate total hiring costs in Spain.

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Spanish hiring in practice

Hiring employees in Spain is characterized by excellent talent availability and a quick hiring timeline for locals, EU, EEA and Swiss nationals, plus a fast-growing pool of expat employees.

Hiring options for foreign employers

The first thing to know about hiring in Spain is that you need a local legal entity to hire workers, or you need to use a third-party provider such as an Employer of Record or temporary employment agency.

If you register your own local entity, you will be responsible for handling all compliance according to Spanish labor law. Even with an in-house HR team, they need a strong understanding of employment regulations because Spanish authorities are tough on employee rights.

The depth of the talent pool in major hubs

Spain is a very popular destination for global hiring. In Madrid and Barcelona in particular, large expat talent pools exist. They work mainly as sales professionals, IT experts, AI specialists, marketing agents and directors, managers and data analysts. In major centers where infrastructure projects are ongoing, both local and expat engineers and project managers are in demand. Hiring remote employees is another popular option for global companies, especially in sales and marketing.

Valencia and Málaga are recognized as two emerging startup hubs outside of Madrid and Barcelona. Valencia has a mature, collaborative tech ecosystem backed by foreign investment.
It attracts a disproportionately high number of growth-marketing experts, agile team leaders, UX/UI designers and product professionals.

Hiring timelines

It will not take long to find talent in Spain unless you are looking for highly specialized skills. Office professionals are readily available, and a strong local and expat talent pool is available to recruit from. For in-demand roles such as sales and marketing, AI, business intelligence or supply chain management, it can take up to 4 weeks to find a suitable candidate.

Onboarding locals, EU, EEA or Swiss citizens in Spain is a quick process that takes only 1-2 days once all documentation has been received.

Relocating talent to Spain takes longer because employers must apply for a work permit and the employee must obtain the appropriate visa. Work permits take, on average, 20 days, but visas can take 4-8 weeks to process.

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Spanish immigration rules: What employers should know

Spain attracts a large number of foreign nationals each year because it offers a high quality of living, an excellent public system and numerous employment opportunities. Relocating your key talent to Spain is straightforward.

Visas have fast turnaround times, usually 4-6 weeks, but the process can take up to 8 weeks, depending on work permit approval, visa type, delays in mandatory checks or local consulate backlogs. Permits are initially for one year and can be extended to four years.

The most common employer-sponsored visa is the Highly Qualified Professional (HQP) visa. The HQP requires a candidate to possess a university degree or at least three years' equivalent of high-level professional experience. For the visa to be approved, the candidate must earn above the minimum threshold of €41,356. This threshold applies to the fixed annual gross salary and cannot include bonuses, performance incentives and commissions.

Advantages of the HQP include faster processing times (usually 20 days), and the employer does not have to prove they could not find local talent to fill the position.

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Compliance obligations that affect hiring in Spain

Spanish employment law is not necessarily difficult to understand, but its application and enforcement can be. From the outset, employers should pay close attention to four elements that can create significant financial liability.

Written employment contract

Spanish labor laws stipulate what information must be included in the written employment contract. For international employers, this can be surprising, especially if your home country doesn't have similar requirements.

Because the written employment agreement forms the basis of the employment relationship, pay close attention to probation periods, notice periods, severance pay, time off, working hours, salary payments, and remote work arrangements, among others. To be validly registered with the Public Employment Service (SEPE), employment contracts must be written in Spanish.

Terminations

Local labor laws provide workers in Spain with strong protections against unfair or procedurally unsound dismissals. Dismissing an employee for poor performance in Spain is especially difficult, and employers face a lengthy process if they take this route.

Notice periods

Employees need to be given at least 15 days' notice when they are going to be terminated for operational reasons. The written notice must include the reasons for termination and the effective date. Employers may pay the employee in lieu of notice instead. A notice period is not required for dismissal due to serious misconduct.

Severance pay

Type of dismissal	Severance pay
Objective dismissal	20 days of salary for each year of service. Up to a maximum of 12 months' salary.
Disciplinary dismissal	No severance pay.

Regardless of the reason for termination, employees must always receive a final settlement which includes outstanding wages, unused accrued leave and pro-rata extraordinary payments.

Worker misclassification

You can hire independent contractors, known as autónomos, in Spain. But commercial law classifies them as self-employed individuals. They are not viewed as permanent employees.

This means they must have business autonomy to avoid misclassification as employees. That autonomy must extend to working hours, the scope of work, using their own tools and paying their own taxes. To prevent ‘fake freelancers’, the Spanish authorities closely monitor the activities and finances of self-employed individuals.

Employee rights

In Spain, the government provides workers with very strong protections and employee rights. These rights are regulated by the Spanish Workers' Statute (Estatuto de los Trabajadores), Social Security regulations and the Collective Bargaining Agreements (Convenios Colectivos).

The main thing international employers should know is that where these rights exist, the employer cannot offer less than the mandated amounts. This applies to minimum wages, mandatory 13th and 14th payments, working hours, rest periods, paid time off and any other statutory rights the employer must provide.

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How Rivermate can help employers in Spain

Global employment comes with its own challenges, but they shouldn’t stop you from hiring in Spain. We have the expertise, resources and infrastructure to support your employee or global team in Spain, leaving you free to focus on your business. Our services include:

• Compliant employment contracts written in accordance with Spain’s employment laws.
• Social security registration, managing payroll, tax withholding and benefits administration.
• Ongoing employment administration such as managing paid vacation and other employee rights.
• Adherence to collective agreements that influence minimum wages and employee benefits.
• Employer visa sponsorship for eligible employees and work permit applications.
• Liaison with Spanish tax authorities and immigration offices.
• Dedicated support from global HR experts.

Partnering with us in Spain gives you a cost-effective, simple alternative to going it alone.

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Ready to hire in Spain?

Rivermate handles the complexities so you can hire with confidence.

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