Guide to hiring in Spain

Spain is a top tourist destination and an attractive business hub. The country offers commercial connections to major markets across the Middle East, northern Africa, and Latin America. Spain also has favorable time zones, affordable hiring costs, and labor-friendly laws for non-EU professionals. 

Before expanding into Spain, you’ll need a solid understanding of contract requirements, taxes, wages, benefits, and other employment considerations. Our guide will tell you everything you need to know about hiring in Spain.

What to know before hiring in Spain

If you’re expanding your business into Spain for the first time, there are important legal requirements to be aware of. These norms and laws influence hiring practices in Spain and many aspects of the employer-employee relationship.

If you’re unsure where to begin, G-P Gia™ , our AI-powered global HR agent, can answer your toughest compliance questions across 50 countries — including Spain — and all 50 U.S. states. Reduce your reliance on outside counsel and cut the time and cost of compliance by up to 95% with Gia.

Let’s take a look at five things to know about hiring in Spain.

1. Employment contracts in Spain

The first thing to know about hiring in Spain is that there are specific laws that govern notice periods and termination requirements. You must draft and sign a written contract for every employee that includes the following sections:

• Job position

• Compensation

• Benefits

• Probationary period, if any

• Grounds for dismissal

• Termination requirements

Spanish law allows a two-month probationary period for general employees and a six-month probationary period for qualified technicians. During these probationary periods, you can terminate an employee if their performance doesn’t meet your standards.

There are certain rules that limit the way you can terminate indefinite contracts that don’t have a probationary period. You can generally terminate a contract under these circumstances:

• Employee voluntarily resigns

• Employer and employee mutually agree to the separation

• The reason for termination is listed in the contract as grounds for dismissal

• The company has grounds for a justified disciplinary dismissal

• The company is dismissing employees collectively on technical, economic, production, or organizational grounds

• Another objective, legally permissible cause

Companies generally come to a mutual agreement with the underperforming employee to dissolve the contract. Severance pay for wrongful termination is 33 days' salary per year of service, capped at 24 months. There's also a penalty for not giving employees the required notice (typically 15 calendar days). Employers must pay the employee for these days in lieu of notice.

G-P EOR has an Employment Contact Generator to help you draft compliant employment contracts that meet all legal requirements and best practices in Spain.

2. Payroll and taxes

In Spain, companies must pay a social security tax for each worker. That tax generally equals 30.57% of the employee’s salary, up to EUR 4,909.50.

Businesses operating in Spain must also pay local and national taxes, including:

• Branch profit tax

• Capital tax

• Corporate income tax

• Real property tax

• Transfer tax

• Value-added tax (VAT)

• Miscellaneous local taxes

The VAT rate is 21%, and the corporate tax rate is 25%.

Spain has a progressive income tax system, which increases with a worker’s salary. Non-residents are also subject to withholding tax requirements that range from 19% in dividends and interest to 24% in royalties.

Non-nationals can benefit from the Beckham law . This gives international workers a fixed rate of 24% for the personal tax income (IRPF) for up to six years. 

3. Wages and working hours

The standard workweek in Spain is 40 hours. Many companies shorten it to 37 or 38 hours. Employers can distribute that time as they wish throughout the year. Some weeks can include more than 40 hours, and some may include less, as long as the relevant Collective Bargaining Agreement (CBA) sanctions the arrangement. As of May 2025, the Spanish parliament is reviewing a bill to officially reduce the workweek to 37.5 hours. 

Paid overtime is generally limited to 80 hours per year. This limit doesn’t include overtime hours that are compensated with equivalent paid rest within four months. 

As of 2025, the minimum wage is EUR 1,184 per month. CBAs may mandate higher minimum wages in specific industries.

Spain doesn’t require specific annual or 13th-month bonuses, though many sales contracts include bonuses and commissions.

4. Time off

Spain has eight national public holidays that are non-replaceable and observed across the entire country. Each of Spain's 17 autonomous communities can establish up to four regional holidays, and municipalities typically declare two local holidays annually. Provincial holidays are also important. Be sure to research your region and find out what extra days are celebrated.

Employers in Spain must provide 22 working days as annual paid time off. This is established in each applicable CBA. These days can’t be paid out as extra compensation, so employees have an extra incentive to take their full paid time off.

In Spain, there is no special category called sick leave. If an employee can't work due to illness or injury, they instead receive a benefit called temporary incapacity. If employees can’t work because of illness or injury, they get at least 60% of their usual wages. The specific amount may vary depending on the industry, terms of the applicable CBA, and the employee’s position. Companies pay the employee directly, and then receive social security reimbursement. A period of sick leave may last for up to 18 months before undergoing further review.

Employees in Spain may also take paid time off for various family circumstances:

• Up to 15 days for marriage

• Two days for a death in the family

• One to two days for moving

• Three to four days for illness of a family member

Pregnant employees may take 16 weeks of paid maternity leave in Spain. Employees must take the first six weeks immediately after the birth or adoption. The remaining ten weeks can be taken consecutively or in installments until the child is one year old. 

Unpaid parental leave, known as "excedencia por cuidado de hijo," is also available for up to three years per child. This applies to both parents. The employee is guaranteed the right to return to the same position during the first year of parental leave. If the leave extends beyond the first year, the employee retains the right to return to a job of equivalent professional group or category, but not necessarily the same position. 

Spain also has breastfeeding or nursing leave. Employees are entitled to daily one-hour breaks until the child is nine months. Mothers can take this hour continuously, split it into two half-hour periods, or reduce the working day at the start or end of the shift. Since May 2024, employees have the right to accumulate breastfeeding leave hours into full working days without needing CBA or employer approval.

Fathers may take 16 weeks of paid paternity leave. This leave is non-transferable and aims to promote gender equality in caregiving responsibilities.

You can easily administer benefits plans with G-P EOR . Our in-house experts continuously monitor employment laws to meet country-specific regulations and norms. Build and manage benefits plans through our platform to provide a smooth employee experience. 

5. Anti-discrimination laws and restrictions

Spanish law forbids discrimination in hiring and employment. You can’t discriminate against job candidates for any of the following reasons:

• Age

• Gender

• Race

• Ethnicity

• Sexual orientation

• Marital status

• Social status

• Religion

• Political opinion

• Union membership

• Disability

Additionally, if an employer has more than 50 team members , 2% of those employees must be people with disabilities.

Part of Spain’s efforts against discrimination include restricting companies from performing criminal background checks on job applicants. Access to the Central Registry of Convictions is limited to specific sectors and roles that are legally justified. These positions involve work with minors, public administration, law enforcement, and specific financial roles. You can’t access this registry without explicit legal authorization. Candidates can voluntarily disclose their criminal record information if they choose.

Top hiring hubs in Spain

Some Spanish cities are known for particular industries. Knowing what each city has to offer can help you channel your hiring efforts to the right place and fill roles faster. 

The top talent hubs in Spain are:

• Madrid has excellent infrastructure, making it attractive for established companies and startups. As the capital, the city also benefits from proximity to government institutions and regulatory bodies. Madrid is home to several top universities and research centers, providing a steady pipeline of graduates.

• Barcelona is recognized as one of Europe's leading startup ecosystems, making it an attractive location to fill IT, engineering, and digital roles. The city draws professionals from across Europe and offers a multilingual and multicultural workforce.

• Valencia is Spain's third-largest city. Its growing economy is based on logistics, manufacturing, and technology. The city's port is one of the busiest in the Mediterranean, supporting trade and related industries. Compared to Madrid and Barcelona, Valencia offers lower living and operating expenses.

• Seville is the largest city in southern Spain and a major economic driver in the region. It has a growing technology scene and established renewable energy, aerospace, and logistics sectors.

• Bilbao has a strong industrial base, especially in steel, shipbuilding, and manufacturing. The city also has a vibrant finance, technology, and services sector.

• Malaga is home to the Malaga Tech Park , which hosts many national and international technology companies. This has positioned the city as a leading IT, engineering, and digital hub. 

Key industries in Spain

Understanding Spain’s main industries helps you benchmark salaries and benefits. You can use this insight to make smart choices about where to invest and grow your workforce. The main industries in Spain include:

• Automotive: Spain is a major car manufacturer, hosting production plants for several global brands. Many vehicles produced in Spain are exported, contributing to the country’s trade balance. The sector is a major employer, and supports many direct and indirect jobs across manufacturing, engineering, logistics, and related services.

• Agriculture and food processing: Spain is one of Europe's leading producers of fruits, vegetables, olive oil, wine, and cereals. The country's climate and geography allow for various agricultural products. Spain exports worldwide, but the EU is the #1 market . The country's food processing sector is highly developed, encompassing everything from canning and packaging to producing processed meats, dairy products, and ready-to-eat foods. Specialist talent includes farm managers, horticultural specialists, and food scientists.

• Renewable energy: Spain is a European leader in wind and solar energy production. The country consistently ranks among the top in Europe for installed capacity and generation from renewables. Wind energy accounts for a significant share of Spain's electricity generation. Specialist talent includes engineers, project managers, and smart grid experts.

• IT and digital services: Spain produces many IT graduates annually. The industry covers various services, including software development, cybersecurity, cloud computing, artificial intelligence, fintech, e-commerce, and digital marketing.

• Financial services: Madrid and Barcelona are important economic centers, hosting banks, insurance companies, and investment firms. Spain is home to some of Europe's largest and most influential banks, such as Banco Santander, BBVA, and CaixaBank. These institutions have a large international footprint, particularly in Latin America and Europe. Specialist talent includes financial analysts, accountants and auditors, and credit and risk analysts. 

Cost of hiring an employee in Spain

Whether you’re hiring one employee or an entire team in Spain, expenses are inevitable. Budget for the following:

• Job advertisements

• Labor hours spent on applicant review and interviews

• Payroll

• Taxes

• Salaries

• Benefits

• Bonuses

• Insurance

Most employees in Spain get their core health insurance through the national health insurance program. Employers often provide supplemental health insurance. Most executives, for instance, receive supplementary health and life insurance from their employers. 

The costs to hire employees in Spain vary by industry because of the various CBA requirements in different sectors. According to Gia , the total annual employer burden rate in Spain, which includes costs triggered on top of salaries, is around 30%. 

What does a company need to hire in Spain?

Hiring in Spain may be similar to your usual hiring process, but there are certain practices that are unique to the country:

• Use the local language and currency: 98.9% of the population speaks Spanish. The next most common language is Catalan. Only about 11.7% of people speak English. Use Spanish in your hiring communications to show that your company values new employees and wants to make them feel included. Use euros in your contracts and offer letters.

• Avoid personal questions: Ask questions that are objective, reasonable, and applicable to the position. Questions that touch on personal matters could trigger discrimination claims. Gia can help you create questions that follow antidiscrimination laws in Spain, so you can find the best fit for the role while complying with local regulations. 

• Double-check regulations: Spanish employment law is highly regulated. Minor missteps could be costly. Do your research to make sure you follow all applicable laws, or work with an Employer of Record (EOR) to ensure compliance. 

• Prepare for numerous applicants: Spain has the highest unemployment rate in the EU: 10.4% as of January 2025 . So you may receive more job applicants than you’re used to.

• Take advantage of Spain’s linguistic diversity: Top cities in Spain are home to large communities of international workers. If you need bilingual employees, you have a high chance of finding qualified candidates.

Make sure you cover these essentials before expanding your team in Spain: 

• Set up an entity or partner with an EOR.

• Pay your minimum investment capital of EUR 3,000 (if you choose private limited liability).

• Obtain certification from the Mercantile Register.

• Obtain a provisional tax ID number (NIF).

• Open a Spanish bank account.

• Submit a declaration against money laundering and terrorist financing.

• Sign a public deed and have it notarized.

• Register with the Commercial Registry.

• Name three to 12 directors, who must file annual financial statements with the Mercantile Register.

Use G-P EOR to hire full-time employees in Spain without setting up your own entity. Build your team in Spain at a lower cost and with peace of mind that you’re doing so compliantly. 

Hiring contractors in Spain

Working with independent contractors in Spain can be a cost-effective way to test the market and build a presence without the commitment of full-time employees. Contractors based in Spain understand local consumer behavior, rules, and business practices. They’ll be ready to start working quickly with their own equipment and established work processes. 

Hiring contractors allows you to easily adjust your workforce based on your business needs, without the complexities and costs of employment. 

Before you enter an agreement with an independent contractor in Spain, consider the following:

1. Employees vs. independent contractors

In Spain, employees work under the employer's direction and supervision, follow set schedules, and receive benefits. They’re integrated into the company's core operations and culture. Contractors aren’t subject to the same control. They operate independently and have autonomy over how, when, and where they perform their work. Employees are entitled to statutory benefits such as paid leave, health coverage, and unemployment benefits. Contractors must arrange their own insurance and retirement plans.

2. Penalties for misclassification

Classifying someone as a contractor when they’re not can lead to severe penalties. If misclassification occurs, you may need to:

• Pay administrative fines ranging from EUR 3,750 to EUR 12,000 per misclassified worker. These fines can escalate based on the severity and persistence of the violation.

• Face imprisonment of up to six years under Article 311 of the Spanish Penal Code.

• Pay back social security contributions that weren’t withheld, with surcharges ranging from 100% to 150% of the owed amount.

3. How to pay contractors in Spain

G-P Contractor ™ takes away the messy, time-consuming process of hiring and paying international contractors. You can create and issue contracts and pay contractors with just a few clicks, all while ensuring a compliant process.

Hire employees and contractors in Spain with G-P

Our SaaS and AI-powered products – EOR , Contractor , and Gia – help companies of all sizes build and manage global teams. 

With more than a decade of experience, the largest team of HR, legal, and compliance experts, and a global proprietary knowledge base, G-P is the recognized leader in global employment .

Make your expansion to Spain easier with G-P. Contact us or book a demo today. 

Frequently asked questions (FAQs)