Hiring in Spain: Complete Guide 2026
Everything you need to know about hiring and managing employees in Spain
Overview
Spain offers a large, multilingual workforce with strong talent depth in technology, consulting, and professional services — and functions as a gateway to both European and Latin American markets. Madrid and Barcelona are established tech and startup hubs. Employment law is comprehensive and employee-protective: employer social charges reach approximately 30% of gross salary, collective bargaining agreements (convenios colectivos) govern many employment terms, and dismissal procedures are strictly regulated. An EOR handles SEPE and TGSS registration, monthly TC1/TC2 filings, and convenio compliance.
Currency
Primary Language
Payroll Tax
Pay Frequency
Overview
Employer Costs
Employer Social Contributions
Mandatory Benefits
EOR Service Fee
Total Additional Cost
Employee Deductions
Income Tax
Employee Social Contributions
Mandatory Employee Benefits
PAYROLL & SETUP
Setting Up Payroll in Spain
Spanish payroll runs monthly (with 12 or 14 payments depending on the applicable convenio colectivo — many Spanish employees receive extra payments in summer and Christmas). Employer social security contributions total approximately 30% — covering pension (23.6%), unemployment (5.5%), FOGASA (wage guarantee fund, 0.2%), and professional training (0.6%). An EOR handles TGSS (Social Security Treasury) registration, monthly TC-1 contribution filings, payslip issuance in the legally required format, and IRPF (income tax) withholding and quarterly reporting to AEAT. The applicable convenio colectivo for each employee's sector must be identified and applied — it may impose salary minimums above the statutory SMI.
Key Labor Laws &
Requirements
Employment Contracts
- Written contract required for fixed-term
- Indefinite contract is the default
- Probation 2–6 months depending on role
Leave & Time Off
- 22 working days annual leave minimum
- Sick leave covered by Social Security after day 4
- Maternity/Paternity leave 16 weeks each
Termination Rules
- 15 days to 3 months notice based on contract
- Severance 20–33 days per year depending on cause
- Collective dismissals require consultation period
COMPLIANCE
Collective Bargaining and Termination in Spain
Spain's Workers' Statute (Estatuto de los Trabajadores) provides strong collective and individual employment rights. Convenios colectivos — sector-specific collective bargaining agreements — are legally binding and typically set minimum salaries, working hours, and leave entitlements above the statutory floor. Dismissal for objective reasons (e.g. economic, technical, organisational) requires 15 days' notice and severance of 20 days' salary per year of service (capped at 12 months). Unfair dismissal (improcedente) triggers severance of 33 days per year of service (capped at 24 months). An EOR ensures the correct convenio is applied, manages termination procedures, and handles the Fogasa (wage guarantee fund) notifications required for collective dismissals.
Key Challenges
- Among the highest employer social charges in EU (~30%)
- Strict collective dismissal consultation requirements
- Strong trade union influence in many sectors
- High structural unemployment affects talent supply
- FOGASA contribution adds to cost base
Country Highlights
Advantages
- Large multilingual workforce (Spanish, English, Catalan)
- Gateway to Latin American markets
- EU member with strong legal framework
- Strong tech and engineering talent in Madrid and Barcelona
- Competitive vs. UK and Northern Europe costs
Popular Industries & Roles
Technology
Avg. Salary: €38k-€75k
Madrid and Barcelona have fast-growing tech ecosystems with strong engineering and product talent
Tourism & Hospitality Tech
Avg. Salary: €35k-€70k
Tourism, hospitality, and travel tech are major industries where Spain leads Europe in talent and infrastructure
Sales & Business Development
Avg. Salary: €40k-€80k
Sales and business development roles leverage Spain's position as the gateway to Latin American markets
Top 3 Providers in Spain
Based on our analysis of pricing, compliance record, service quality, and customer reviews
Deel
- 150+ countries with owned entities
- Contractor and EOR in one platform
- Rich HRIS integrations including Slack
- AI-powered compliance automation
Remote
- 100% owned entity model globally
- Compliance-first with IP protection
- Strong contractor management at $29/month
- Ranked #1 for compliance on G2
Parakar
- Physical offices in all 10 EU countries
- First licensed EOR in Belgium
- IND Recognised Sponsor (Netherlands)
- Expert in-person European support
Find a better EOR — without risk
Compare EOR providers to gain insights on cost, coverage, and contract flexibility, ensuring compliance and payroll continuity.
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