Employer of Record in Spain

An Employer of Record (EOR) in Spain legally employs your workers on your behalf. This means the EOR handles all the local HR tasks. Think payroll, taxes, benefits, and compliance with Spanish labor laws. You get to manage your team's day-to-day work, while the EOR takes care of the complex administrative duties. This lets you hire talent in Spain without setting up a legal entity there. For a simple solution, consider an EOR provider like Rivermate.

How an Employer of Record (EOR) Works in Spain

Using an EOR in Spain simplifies hiring. The process is straightforward.

• You Find the Candidate: You recruit and select the best person for the job.
• The EOR Hires Them: The EOR legally hires the employee in Spain under its local business entity.
• Onboarding Starts: The EOR manages the employment contract, ensuring it complies with Spanish law. They also handle all the necessary new-hire paperwork.
• Day-to-Day Management: You manage your employee's daily tasks and responsibilities directly.
• HR and Payroll Handled: The EOR takes care of salary payments, tax withholdings, social security contributions, and benefits administration.
• Ongoing Compliance: The EOR stays up-to-date with any changes in Spanish employment regulations to keep your business compliant.

Why use an Employer of Record in Spain

Using an EOR in Spain is a smart move for companies that want to grow internationally without the usual headaches. It saves you time and money. You avoid the lengthy and expensive process of setting up your own company in Spain. This lets you enter the market and start operations much faster.

Here are some key benefits:

• Fast Market Entry: You can hire employees and begin working in Spain in a matter of days, not months.
• Full Compliance: EORs are experts in Spanish labor law. They make sure your employment practices meet all legal requirements. This includes complex rules around contracts, working hours, and termination.
• Reduced Costs: You skip the high costs associated with establishing a legal entity, such as legal fees and administrative setup.
• Simplified Payroll: The EOR manages all aspects of payroll, including taxes and social security contributions, which are complex in Spain.
• Access to Benefits: EORs can often provide your employees with competitive benefits packages, helping you attract top talent.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Spain includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Spain.

Hiring in Spain can be a great move for your company. The country has a strong talent pool with a growing number of professionals in tech and other industries. You'll find a workforce that is adaptable and often bilingual. Keep in mind that Spain has strong labor laws that protect employees, so it's important to understand your obligations before you start the hiring process.

Employment contracts & must-have clauses

In Spain, you can use verbal or written employment contracts, but written contracts are standard practice. Certain types of contracts, like temporary or part-time agreements, must be in writing. Indefinite (permanent) contracts are the most common and are encouraged under Spanish law.

Here are some clauses you'll want to include in your employment contracts:

• Party details: Full names and addresses of both the employer and employee.
• Job details: A clear description of the role and responsibilities.
• Contract type: Specify if the contract is permanent or for a fixed term.
• Start date: And an end date for temporary contracts.
• Probation period: The length of the trial period.
• Working hours: Details on the work schedule.
• Salary and compensation: A breakdown of the salary and any additional pay.
• Benefits: Information on any extra benefits provided.
• Overtime policy: How overtime is handled.

Probation periods

Probation periods in Spain give you a chance to see if a new hire is a good fit. During this time, either you or the employee can end the contract without notice. The length of the probation period can vary depending on the collective bargaining agreement.

Here's a general guide to probation period lengths:

Working hours & overtime

The standard workweek in Spain is 40 hours, with a maximum of 9 hours per day. A proposal to reduce the standard workweek to 37.5 hours is expected to pass in 2025.

• Overtime: Overtime is limited to 80 hours per year.
• Compensation: You must compensate employees for overtime with either extra pay or time off.
• Rest periods: Employees get a minimum of 1.5 uninterrupted rest days per week.

Public & regional holidays

Spain has a mix of national, regional, and local public holidays. Each municipality can have up to 14 public holidays per year. Nine of these are national holidays, and at least two are chosen locally.

Some of the national public holidays for 2025 include:

• January 1: New Year's Day
• January 6: Epiphany
• April 18: Good Friday
• May 1: Labour Day
• August 15: Assumption of Mary
• October 12: Spain's National Day
• November 1: All Saints' Day
• December 6: Constitution Day
• December 8: Immaculate Conception
• December 25: Christmas Day

Keep in mind that regional holidays vary, so it's a good idea to check the specific holidays for the region where your employee is based.

Hiring contractors in Spain

You can hire independent contractors, known as autónomos, in Spain. They manage their own taxes and social security contributions. This can be a flexible option for project-based work.

However, you need to be careful about employee misclassification. If you treat a contractor like an employee by controlling their work hours and tasks, you risk them being reclassified as an employee. This can lead to penalties, including back payments for social security and taxes.

An Employer of Record (EOR) can help you avoid these risks. An EOR hires employees on your behalf, taking on the legal responsibility for compliance with Spanish labor laws. This way, you can build your team in Spain without the risk of misclassification.

Navigating payroll in Spain means understanding a system shaped by national laws, regional rules, and collective bargaining agreements. These agreements, known as convenios colectivos, are important and regulate things like salary ranges and working hours for specific jobs. This guide will walk you through the key things you need to know to pay your team in Spain.

Payroll cycles & wage structure

In Spain, you typically pay your employees monthly. A unique feature of Spanish payroll is the 14-month salary structure. This means employees receive 12 monthly payments plus two extra payments, usually in July and December. Some companies choose to prorate these extra payments, spreading them across the 12 regular monthly paychecks.

Overtime & minimums

The Spanish government sets a national minimum wage each year, called the Salario Mínimo Interprofesional (SMI). For 2025, the minimum wage is €1,184 per month, based on 14 payments. Collective agreements can establish higher minimums for certain sectors.

A standard workweek is 40 hours. Any hours worked beyond this are considered overtime and must be compensated, often at a rate of 175%. There is a cap on overtime, with a maximum of 80 additional hours per employee per year.

Employer taxes and contributions

As an employer in Spain, you are responsible for making several social security contributions on behalf of your employees. These contributions fund pensions, healthcare, unemployment benefits, and more.

Employee taxes and deductions

Employees also contribute to the social security system and pay income tax, which you withhold from their paychecks.

In Spain, your employee benefits package and leave policies are key to attracting and keeping top talent. The country's labor laws provide strong protections for workers, including generous leave allowances and a robust social security system. Understanding these regulations is the first step to building a competitive and compliant benefits plan for your Spanish team.

Statutory leave

Spanish law mandates several types of paid leave to support employees' well-being and work-life balance.

• Annual leave: You must provide a minimum of 30 calendar days of paid vacation per year, which is equivalent to 22 working days. This leave cannot be replaced by payment, so you need to encourage your team to take their time off.
• Maternity and Paternity leave: Both parents are entitled to 16 weeks of leave, with the first 6 weeks to be taken immediately after the child's birth. The remaining 10 weeks can be used at any time until the child is one year old.
• Sick leave: Employees can take up to 18 months of sick leave. The payment during this time comes from social security. For the first 3 days, the employee is not paid. From day 4 to 20, they receive 60% of their regular pay, and from day 21 onwards, this increases to 75%.

Public holidays & regional holidays

Spain has a number of national public holidays, and each autonomous community also has its own regional holidays. In total, employees receive about 14 paid public holidays each year.

Typical supplemental benefits

While the statutory benefits in Spain are comprehensive, many companies offer additional perks to stand out.

How an EOR can help with setting up benefits

Setting up a benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you. We handle the administrative and legal requirements of managing employee benefits in Spain.

An EOR can:

• Ensure your benefits package complies with Spanish labor laws.
• Administer both statutory and supplemental benefits for your employees.
• Manage payroll and social security contributions.
• Provide local expertise on competitive benefits packages.

By partnering with an EOR, you can offer your Spanish employees a comprehensive and compliant benefits plan without the need to establish a local legal entity. This allows you to focus on growing your business while we take care of the HR details.

Ending a working relationship in Spain involves clear, specific steps. You must follow legal procedures to ensure a fair and compliant process. This involves providing written notice, justifying the termination, and paying the correct severance. The process depends on the reason for the dismissal, which can range from disciplinary issues to economic reasons.

Notice periods

When you terminate an employee for objective reasons, such as economic or organizational changes, you must provide at least 15 days' notice. You need to give this notice in writing, clearly stating the reasons for the termination and the effective date. If you prefer, you can pay the employee their salary for the notice period instead of having them work.

For disciplinary dismissals due to serious misconduct, you do not have to provide a notice period. However, you still need to deliver a written termination letter explaining the reasons for the dismissal.

Severance pay

The amount of severance pay depends on the type of termination.

It is important to calculate and provide the severance payment at the time of giving the notice for an objective dismissal.

How Rivermate handles compliant exits

When you partner with us, we manage the entire offboarding process for you. We make sure every termination is handled in a compliant and professional manner.

Here’s how we help:

• Documentation: We prepare and handle all necessary legal documents, including the termination letter.
• Compliance: We ensure that every step follows Spanish labor laws, from notice periods to severance calculations.
• Communication: We help you communicate the decision clearly and respectfully to your employee.
• Final Settlement: We manage the final payment, known as the finiquito, which includes any outstanding salary, unused vacation days, and severance.

We take on the administrative and legal burdens so you can focus on your business. We help you navigate the complexities of Spanish employment law to ensure a smooth and fair exit process for everyone involved.

Navigating the world of visas and work permits in Spain can feel complicated. Put simply, if you are not a citizen of the European Union, Iceland, Liechtenstein, Norway, or Switzerland, you will need a permit to legally work in the country. For citizens of these countries, the process is more straightforward, only requiring registration with the local authorities if you plan to stay for more than three months. For everyone else, securing the right authorization before you start working is essential. The Spanish government offers several pathways to employment, depending on your situation.

Employment visas & sponsorship realities

When it comes to hiring talent from outside the EU, you have a few options. An Employer of Record (EOR) can simplify this process significantly.

An EOR can sponsor visas for non-EU nationals, which is a great solution if you don't have a legal entity in Spain. This typically works best for certain types of visas:

• Highly Qualified Professional Visa: This is for specialists with a qualified job offer.
• EU Blue Card: This is an option for professionals with advanced qualifications.

An EOR takes on the legal responsibilities of employment, including payroll, taxes, and compliance with Spanish labor law. This means you can hire talent in Spain without the headache of setting up a local company.

However, there are some routes an EOR typically can't support, such as the self-employment visa, which is designed for freelancers and entrepreneurs who want to start their own business in Spain.

Business travel compliance

If you need to travel to Spain for short-term business activities, you might not need a visa. For stays of up to 90 days in a 180-day period, you can typically attend meetings, conferences, and negotiations without a permit.

However, it is crucial to understand that these short-term visits do not allow you to engage in any paid work. The activities are limited to things like:

• Attending business meetings
• Visiting clients
• Going to trade shows
• Receiving training

If your activities in Spain go beyond this, you will likely need a specific short-term work visa. Always check the specific requirements before you travel to ensure you are compliant with Spanish immigration rules.