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Compensation & Benefits in EsSpain.

Population

48,345,223

Languages

1.

Spanish

Country Capital

Madrid

Currency

Euro (€) (EUR)

Compensation and benefits are vital to both employees and employers. You’ll need a strong Spain benefit management plan that includes both guaranteed and supplemental benefits to bring in top talent. Plus, you must meet the statutory minimums to stay compliant and avoid any fines.

G-P can take the stress out of sourcing benefits. Our Spain benefit outsourcing services allow you to run your company while we find the best benefits for your employees. Through Spain compensation outsourcing, we can also hire employees on your behalf and add them to our compliant payroll.

Spain Compensation Laws

In 2021, Spain’s minimum wage rose to 1,108 EUR per month. However, the actual rate you must pay your workers can change if a collective bargaining agreement (CBA) covers your employees or industry. Overtime can either be compensated monetarily or given through paid time off depending on the employee’s preference.

Guaranteed Benefits in Spain

Spain has numerous guaranteed benefits that employers must provide to employees. For example, employees get a day off during Spain’s 10 public holidays. The country also has provincial holidays that vary based on your community. Employers are required to provide a minimum of 30 calendar days of paid vacation each year.

Another guaranteed benefit is maternity and paternity leave. Female employees receive 16 weeks of paid leave, of which they must take six weeks off before the child’s birth. They can then take up to one year of unpaid leave after their paid leave and still be guaranteed their job when they come back. Fathers receive 30 days of paternity leave with additional time off if the mother or baby has any complications.

Spain Benefits Management

Another significant part of a competitive Spain benefit management plan is providing any additional benefits that employees expect. Health insurance in Spain is funded through social security taxes, but employers often offer additional coverage for high-level employees. Smaller companies may choose to give an allowance for health and life insurance instead of sourcing the benefits themselves.

Spain’s compensation laws do not require a 13th-month or an annual bonus. However, sales employees usually expect a commission or a quarterly bonus plan. Employees also typically receive additional time off for instances such as:

  • Fifteen days off for marriage
  • Two days off for the death of a family member
  • One day off for home relocation

Restrictions for Benefits and Compensation

Before you outline specific compensation and benefits in an employment contract, you’ll need to check for any collective bargaining agreements (CBAs) that could stipulate certain restrictions. A CBA will often detail a different minimum wage or amount of paid vacation time. Your employment contract must meet or exceed the CBA’s restrictions.

Spain Competitive Benefits Planning

Employee benefits planning in Spain can help you establish your new international business and recruit the right professionals to join your team. With a program that sets your employees up for success and balances key compliance and budgetary requirements, you can grow your company faster while engaging your team more effectively.

Spain Employee Benefits Plans

Beyond meeting compliance requirements, you want to demonstrate how much you value your employees by providing benefits that meet their needs. A thoughtful benefits program can improve employee morale and boost your retention rate. Extra benefits can also make your open positions more competitive in the job market.

Consider providing perks and fringe benefits for your workers to help them work more effectively, such as:

  • Pensions
  • Company cars
  • Mobile phones
  • Professional learning resources
  • Business travel reimbursements
  • Relocation assistance
  • Child care and education stipends

Requirements for Employee Benefits in Spain

Under the Spanish Workers’ Statutes (Estatuto de Los Trabajadores), permanent and temporary workers in most situations must receive the same fundamental benefits. Employers must include the following mandatory benefits in their programs:

  • Paid annual leave
  • 16 weeks of maternity leave at a minimum
  • Paternity and partner leave
  • Sick leave
  • 14th-month salary
  • Medical insurance through mandatory social security system enrollment

How to Design Your Employee Benefits Program

Every country’s legal requirements and market standards will differ, but you can follow some fundamental steps to establish your benefits program abroad.

1. Establish Your Goals and Budget

Defining the scope and key objectives of your benefits program early on will help you move forward more efficiently and sustainably. Take the time to evaluate your resources and discuss your company’s goals for growth in Spain. Meet with stakeholders to get a holistic view of your company’s objectives and determine how your benefits program can fit into them. If employee retention is a priority, for example, you might consider offering more benefits and keeping your team small.

2. Research Key Employee Needs

Conducting a needs assessment can help you understand your employees’ perspective on benefits requirements in your new business region. Consider mailing out questionnaires to local workers or conducting one-on-one or group interviews with employees to discuss the benefits they value most.

During your research, you can also spend time assessing the benefits other regional companies offer so you can develop a more competitive plan.

3. Create Your Employee Benefits Plan

Use your research to inform planning decisions, building a program that delivers key benefits for employees and works with your available budget.

As you begin calculating benefits, remember to factor in cost containment features, administration expenses, outsourcing needs, and employee contributions. Keep in mind that you can revisit your plan as your company grows and you have more resources available.

Average Cost of Benefits Per Employee

Benefits costs can vary widely from one business to another. Your company’s industry, size, and location are just a few factors that can influence the cost of your benefits plan. It’s best to focus on your own budget rather than the national average cost of benefits.

How to Calculate Employee Benefits

You must provide social security contributions to support your employees’ health coverage needs. The total premium is typically 28.3 percent of an employee’s salary, with the employee paying 4.7 percent and the employer contributing the remaining 23.6 percent.

Spain’s labor laws outline payment rates for maternity leave, sick leave, and other mandatory benefits.

Calculations for supplemental benefits will vary depending on your offerings. Research comparable rates for your region and industry to identify market standards.

How Are Employee Benefits Taxed in Spain?

The first €500 employees earn in benefits and other similar income is tax-free. Beyond that amount, most types of benefits are taxable, particularly supplemental income. You can consult the national tax service to determine exact income tax rates for your employees’ situations.

Employee Health Benefits Plans

You are required to enroll all employees in the Spanish social security program for health care benefits. You will also need to contribute your percentage of social security payments for all workers.

Spain Competitive Benefits Planning

Employee benefits planning in Spain can help you establish your new international business and recruit the right professionals to join your team. With a program that sets your employees up for success and balances key compliance and budgetary requirements, you can grow your company faster while engaging your team more effectively.

Create an Optimized Employee Benefits Plan With G-P

G-P offers localized expertise and trusted resources to support your growth abroad. Request a proposal to get started.

Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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