Guide to hiring in Spain

Key takeaways

• Flexible hiring paths for global companies: You can hire talent in Spain by using an Employer of Record (EOR), work with independent contractors, or open a local subsidiary (such as a Sociedad Limitada) to handle direct payroll. 

• Employment contracts are the default requirement: Written contracts are mandatory for all employees in Spain. Indefinite contracts are standard. Fixed-term ones are limited to justified temporary production or worker substitutions.

• High social security contributions and tax rules: Employers face standard social security contributions of 30.57% of an employee's salary, capped at EUR 5,101.20 monthly. Eligible inbound workers can use the Beckham Law (a flat 24% tax rate on employment income up to EUR 600,000 for up to six years).

• Generous leave and standard 40-hour workweeks: The standard workweek is 40 hours. Employees get a minimum of 30 calendar days of paid annual leave, plus 14 public holidays. Each parent also gets 16 weeks of paid birth and childcare leave.

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 everyday practices when hiring employees 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 seven things to know about hiring in Spain. 

1. Employment contracts in Spain

The first thing to know about hiring employees in Spain is that there are specific laws that govern notice periods and termination requirements. You’ve to draft and sign a written contract for every employee and include:

• Employer and employee identification

• Start date

• Workplace/location

• Contract type and duration, if temporary

• Professional group/category

• Working hours and schedule

• Salary, supplements, and payment frequency

• Annual leave

• Notice periods

• Applicable collective bargaining agreement (CBA)

• Remote work terms, if applicable 

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. You can terminate during probation without cause or notice but not for discriminatory or protected reasons, such as pregnancy, maternity/paternity-related protections, illness-related discrimination, or other protected grounds. 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 Contract Generator to help you draft compliant employment contracts that meet all legal requirements and best practices when looking to hire in Spain.

Employers have to:

• Register the employee with Spain’s social security before work begins.

• Communicate contract details to SEPE within the required timeframe.

• Give a copy of written contracts to employee representatives, where applicable.

• Check the CBA before finalizing probation, salary, working time, notice, and job classification terms.

 2. Types of employment contracts in Spain

Spain’s main employment contracts are:

• indefinite contracts

• fixed-term contracts

• training contracts

• part-time contracts

• fixed-discontinuous contracts. 

Indefinite employment is the default. Fixed-term contracts are only allowed for specific justified reasons, mainly temporary production needs or the substitution of another worker.

Training contracts in Spain include alternating work-study contracts and professional practice contracts for recent graduates or qualified workers. Fixed-discontinuous contracts are indefinite contracts used for recurring seasonal or intermittent work. This covers tourism, agriculture, or education. Part-time arrangements are available but have to be documented, including working hours and distribution.

3. Payroll and taxes

In Spain, companies have to pay employer social security contributions for each worker. These generally equal 30.57% of the employee’s salary, up to EUR 5,101.20 per month. A separate solidarity contribution also applies progressively to pay above EUR 5,101.20 per month. This is shared between employer and employee.

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.

Eligible inbound workers in Spain can benefit from the Beckham Law. This gives a special 24% tax rate on employment income up to EUR 600,000 for up to six tax years. 

4. Wages and working hours

The standard workweek in Spain is 40 hours, averaged annually. Many companies shorten it to 37 or 38 hours through CBAs or company policy. Without an agreement, employers can irregularly schedule up to 10% of annual hours with five days' notice, while following rest rules. Some weeks can exceed 40 hours and others can be lower. 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 2026, the minimum wage is EUR 1,221 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. 

5. Time off

Spain has 14 paid public holidays, including national, regional, and two local holidays. 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 have to give at least 30 calendar days of paid annual leave per year. This is often expressed as about 22 working days in CBAs. 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, if an employee can’t work due to illness or injury, they can get a temporary incapacity benefit rather than a separate sick-leave entitlement. For common illness or non-work-related injury, the first three days are unpaid unless of a CBA or company policy. From days 4–15, the employer pays 60% of the employee’s regulatory base directly. From day 16 onward, social security or the relevant mutual insurance entity is responsible for the benefit. Employers can continue paying the employee through delegated payment and offset the amount through social security contributions. From days 16–20, the benefit is generally 60% of the regulatory base, increasing to 75% from day 21. CBAs can improve these amounts. Temporary incapacity can last up to 365 days, with a possible 180-day extension.

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

Spain gives a unified birth and childcare leave framework for both parents. Each parent gets 19 weeks of paid leave, including six mandatory weeks immediately after birth, adoption, or foster placement. The remaining weeks are available for flexible use. 

Unpaid childcare leave, known as excedencia por cuidado de hijo, is available for up to three years per child. This is available to either parent. During the first year of leave, the employee has the right to return to the same position. After the first year, the employee keeps the right to return to a role in the same professional group or an equivalent category. This is separate from Spain’s 8-week unpaid parental leave, which can be used until the child turns eight.

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.

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. 

6. 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

• DisabilityAdditionally, 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.

7. Employer obligations for workplace safety 

Employers have a broad duty under Prevención de Riesgos Laborales to protect workers’ health and safety. This means they’ve to:

• identify and assess workplace risks

• create and keep a prevention plan

• Set up preventive measures

• promote reducing risks at source or using collective protections before relying on personal protective equipment.

 Employers have to organize appropriate prevention resources, such as:

• designated trained workers

• an internal prevention service

• an accredited external prevention service.

Non-compliance can lead to labor inspection action, administrative fines, civil liability, social security benefit surcharges, and criminal liability.

Hiring models for global companies looking to hire in Spain

The best model for hiring in Spain depends on your business goals. 

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.