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Global Expansion Guide

Spain

Manage and pay your employees easily with BIPO in Spain and 170+ other markets. Build your international teams today with our global Employer of Record service!

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Currency

Euro (EUR)

employment guide_language

Language

Spanish

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Capital

Madrid

Employer of Record Spain

Employment Contract

Statutory Contributions

Minimum Wage

Public Holidays

Working Hours

Leave

Termination and Compensation

BIPO as your Employer of Record

Benefits of BIPO EOR Service in Spain

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  • Global Hiring Guide
  • Spain

Employer of Record Spain

Embark on your business expansion in Spain with BIPO’s Employer of Record (EOR) services. Designed to assist you in navigating the intricacies of local employment laws and regulations, we can help ensure a smooth transition for your business and workforce.

As an Employer of Record (EOR), we act as your legal employment entity, streamlining the process of business expansion. Allowing businesses to focus on their core business operations while the EOR manages all aspects of compliance, payroll, HR, and employee benefits when venturing into the Spanish market. An EOR provider addresses the common challenges associated with local employment laws, payroll regulations, and work permit requirements.

Employment Contract

  • Generally, Spanish Labour Legislation allows verbal or in writing form when drawing up a contract. However, in practice, employers are required to pay insurance and provide a written contract within 10 days of the employee’s employment, so it is almost impossible to entre into an oral contract in Spain.
  • The most common contract type in Spain is indefinite contract.
  • There are strict restrictions on signing fixed-term employment contracts. Fixed-term contracts are divided into structured contracts and training contracts.

Structured Contracts

  1. Productive Contract

    • If there is a temporary imbalance between existing stable positions and required positions due to unforeseeable circumstances, the contract period shall not exceed six months. It may be extended to one year under special provisions of the Collective Bargaining Agreement of the industry.
    • The Company may enter into any number of discontinuous contracts as required to deal with unusual and foreseeable circumstances of shortened or limited duration, not exceeding 90 days in any calendar year.

  2. Alternative Contract

    • In case of job retention of absentees, the period of replacement service may start from 15 days before the absence of the employees and the period shall not exceed the time when the absentees return to work.
    • The duration of the contract for temporary replacement work until the vacancy is permanently filled by a fixed-term contract employee shall not exceed three months or a shorter period agreed upon in a Collective Bargaining Agreement.

Training Contracts

  1. A work-related training contract (formerly known as an apprenticeship contract), which enables a worker to combine work with a training process, which is limited to a period from 3 months to 2 years;
  2. A contract to obtain work experience, applicable to anyone holding the appropriate qualifications for this work within three years of completing the necessary studies. The duration of this type of contract is limited to a period from 6 months to one year.

Statutory Contributions

TypeDetailsEmloyer ContributionEmployee Contribution
Social Security (TGSS)Pension, medical, maternity etc. benefits23.60%4.70%
MEI TaxSupplemental pension0.67%0.13%
Solidarity TaxSupplemental pension fund (Employees who exceed the maximum contribution base)0.77% – 0.98%0.15% – 0.19%
Unemployment InsuranceUnemployment, employment security benefits5.5% or 6.7%1.55% or 1.6%
Other-Training TaxProfessional skills development0.60%0.10%
Salary Guarantee FundProtection of employees against employers go bankrupt0.20%–
 Total of aboveAbout 31.34%About 6.63%

Minimum Wage

The statutory minimum wage of Spain has been adjusted from EUR 37.8 to EUR 39.47 per hour (from EUR 1,134 to EUR 1,184 per month) for general workers and taken effect from 1st of January 2025.

Public Holidays

The Public Holidays in Spain in 2025 is shown as following. Please refer to the announcement of the government of Spain.

Holiday Name Date 
New Year’s Day1 January 2025
Epiphany6 January 2025
Good Friday18 April 2025
Labour Day1 May 2025
Assumption of Mary15 August 2025
Fiesta Nacional de España12 October 2025
All Saints’ Day1 November 2025
Constitution Day6 December 2025
Christmas Day25 December 2025

Working Hours

Normal Working Hours

  • Normally 40 hours per week, the Spain government plans to reduce it to 37.5 hours per week in 2025.
  • According to Spain labour law, employees have the right to (request) flexible working hours. For example, a worker can ask for reduced working hours to care for the sick family member. The law requires employers to seriously consider these requests and only refuse them based on legitimate business reasons.

Rest Time

  • Once the employees have worked continuously for six hours in a working day, they can take a 15-minute break. Minor employees under 18 years of age, whose have worked 4.5 hours, can take a 30-minute break.
  • In addition, employers usually provide employees with a one-hour lunch break, which is unpaid.
  • An employee shall be entitled to 12 hours of rest between the end of one day and the beginning of the next day.
  • Employees will have the right to an uninterrupted 1.5 days of minimum weekly rest. The weekly rest can be accumulated over a maximum period of 2 weeks. Normally, weekly rest consists of Saturday afternoon or, where appropriate, Monday morning and the full day of Sunday.
  • The duration of the weekly rest for minors under eighteen years of age will be at least two uninterrupted days.

Night Work

  • Night working hours are between 11:00 pm one day and 6:00 am the next day.
  • Night shift allowances are implemented in accordance with the relevant Collective Bargaining Agreement.

Overtime

  • Any hours worked in excess of standard working hours are considered overtime.

Restrictions on overtime work:

  1. The number of overtime hours for standard working hour employees may not exceed 80 per year.
  2. For employees who, due to the modality or duration of their contract, work a working day in annual calculation less than the general working day in the company, the maximum annual number of overtime hours will be reduced in the same proportion that exists between such days.

  3. Overtime pay: In the absence of an agreement in this regard, he overtime hours performed by the employees must be compensated as time off in lieu within 4 months once the overtime work is performed.

    • The overtime pay rates are based on the certain amount agreed in the Collective Bargaining Agreements, which is normally 1.75 times employees’ regular pay rates.

Other Regulations

  • In 2025, the Spanish government is expected to draw up a new labour law, which includes a proposal to reduce the weekly work hours to 37.5 without reducing wages. To support this change, the draft law proposes that all companies must use a digital clock-in system to track their employees’ daily working hours.

  • Employment Record

    • For the purposes of calculating overtime, the working hours of each employee will be recorded day by day and will be totaled in the period set for payment of the remuneration, giving a copy of the summary to the employee in the corresponding receipt.
    • This record must include the specific start and end times of each employee’s working day, without prejudice against any flexible hours that may be provided.
    • The working hours of part-time employees will be recorded day by day and will be totaled monthly, giving the employee a copy, along with the pay-slips, of the summary of all the hours worked (both ordinary and complementary work) each month.
    • The employer must keep the monthly summaries of the working hour’s records for a minimum period of four years.

Probationary Period

The probation period is regulated by the Workers’ Regulations, and the exact duration is usually determined by Collective Bargaining Agreements. Generally, the probation period for qualified technical positions may not exceed six months, while the probation period for other positions may not exceed two months. In small enterprises with fewer than 25 employees, the probation period for non-technical positions may be extended to three months.

Leave

Statutory leave in Spain includes:

Type Applicable to Details
Paid Annual Leave Employees who have served at least one year 30 days, or according to the signed collective bargaining agreement
Pregnancy and Maternity Leave Female Employees

16 weeks (post-natal leave: 6 weeks) + 2 weeks (twin) + 2 weeks (Triplets and multi-births)

Expected to be updated to 20 weeks in August according to EU directive
Sick Leave All Employees 12 months, at most 18-24 months, or according to the signed collective bargaining agreement
Breastfeeding Leave Female Employees Twice per day, 30 minutes each
Paternity Leave Male employees

16 weeks

Expected to be updated to 20 weeks in August according to EU directive
Adoption Leave Employees who adopt children 16 weeks
Educational Leave Employees who have served at least one year 20 hours
Parental Leave Employees with children under eight years of age

8 weeks, paid

Expected to be taken effective in August according to EU directive
Family Care Leave All Employees 2 years, unpaid
Marriage Leave All Employees 15 days or according to the signed collective bargaining agreement
Public Duty Leave All Employees Based on needs
Bereavement Leave All Employees 2-5 days, or according to the signed collective bargaining agreement
Relocation Leave All Employees 1 day, or according to the signed collective bargaining agreement
Labour Union Duty Leave All Employees Based on needs
Voluntary Unpaid Leave Employees who have served at least one year 4 months – 5 years (unpaid)

Termination and Compensation

Termination Notice

  • No less than 15 days, however, it could be set longer if there is an agreement in the signed employment contract.

Compensation

1. Fixed-term contract

  • When an alternative contract is terminated, no need to pay any compensation.
  • When any other type of structured contract is terminated, 12 days’ salary will be paid as compensation to the employee for each year of service to the employer.

2. Indefinite contract

  • Dismissal for disciplinary violations

    • Executed based on the special process stated in Article 54 of Workers’ Statute.
    • Those employees are not entitled to unemployment benefits and allowances from the government.

  • Dismissal for objective reasons

    • 20 days’ salary will be paid as compensation to the employee for each year of service to the employer, capped at 12 months; and employees are entitled to 6 hours of paid leave every week to look for new job opportunities.

  • Unlawful dismissal (employer without any reasonable reason)

    • If the employee started working before 2011, 45 days of salary will be paid to him or her as compensation for each year of service to the employer.
    • If the employee started working after 2011, 33 days of salary will be paid to him or her as compensation for each year of service to the employer.
    • Capped at 24 months.
    • Those employees are entitled to unemployment benefits and allowances from the government.

BIPO as your Employer of Record

BIPO’s total HR solutions include our award-winning HR Management System, Global Payroll Outsourcing, Employer of Record service, and Athena BI.

As your EOR partner, our services are designed to provide a comprehensive, hassle-free experience:

  • Initial Consultation: The journey typically begins with an in-depth discussion to understand your specific business needs, ensuring our EOR services perfectly align with your objectives.
  • Payroll Management: We offer a streamlined payroll system that ensures timely and accurate salary disbursement, complete with statutory deductions and contributions in full compliance with Spanish regulations.
  • Contributions and Taxes: Our expertise in managing local social security requirements ensures your business complies with Spain’s financial obligations.
  • Compliance with Working Hours: We guarantee that your employment practices adhere to Spain’s working hours standards, safeguarding your business against potential legal issues.
  • Leave and Paid Time Off Management: Implement and manage leave policies that comply with Spanish laws, ensuring a fair and transparent leave management system for your employees.
  • Regulatory Compliance: Stay ahead of local labour laws and regulations with our up-to-date compliance services, minimising legal risks for your business.
  • Other services: Work visa, permit applications, termination procedures.

Services may vary across countries.

Benefits of BIPO Employer of Record Service in Spain

Unlock your growth potential with BIPO’s Employer of Record service in Spain. Our EOR service empowers businesses with seamless scalability while ensuring regulatory compliance.

From smooth onboarding to risk mitigation, BIPO handles the administrative HR tasks, enabling companies to concentrate on core business functions and accelerating growth. Our local expertise and global reach ensure efficient operations, enhancing flexibility and reducing operational complexities.

Stay up to date with the latest employment regulations.

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Frequently Asked Questions

An Employer of Record (EOR) is a partner company that acts as the official employer for your employees. 

An EOR company handles all the HR aspects and processes, including the legal complexities associated with regulatory and tax compliance.

As your EOR, BIPO supports your organisation by providing a comprehensive range of HR, payroll and advisory services to ensure your business stays compliant. These include end-to-end on/offboarding services for your employees (e.g.: payroll processing, HR and benefits administration, labour contracts, visa applications, payroll/tax compliance, and more).

By engaging BIPO as your EOR, your business benefits from: 

  • Compliance in the global markets where you operate
  • Reduced costs and risk mitigation
  • Overall workforce productivity, effectiveness, and efficiencies

A global EOR benefits organisations regardless of size or industry. It is especially useful for organisations that want to:

  • Scale their global business and be fully operational in foreign markets quickly
  • Reduce financial and HR complexities while expanding internationally
  • Minimise time spent trying to understand local labour laws and foreign tax systems
  • Stay compliant across global markets while reducing HR and administrative workflows
  • Benefit from a centralised and intuitive cloud HR platform to manage international teams

A global EOR enables businesses to fast-track their market entry into international market, and reduce the complexities of setting up multiple foreign entities.

When you partner with BIPO, we take on the the day-to-day administrative tasks, while you maintain full control of the business and delegate HR workflows and hiring needs.

Our vast network of business partners across 170+ markets globally supports your business expansion plans, with in-country HR experts providing localised support. Going global has never been easier!

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