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Payroll Services for Your Employees in Spain
We handle Spanish payroll for
international companies, even without a local entity of your own.
Want to hire an employee in Spain without a permanent establishment, but still need Spanish-compliant payroll?
IPS can help you hire and pay employees in Spain in full legal compliance, even without a Spanish branch or permanent establishment. We can take your foreign payroll off your hands entirely.
There are two options:
1. Employer of Record (Spain)
With this option, your employee is formally hired by us and works for you full-time on a leased basis. In Spain, this arrangement is also known as employee leasing.
✓ Fast market entry in Spain
✓ No need for your own local entity
✓ Payroll and administration fully outsourced
2. Direct Employment
Your employee is hired directly by your company, but payroll is processed
under German law by registering your company as a
foreign employer.
✓ Suitable for long-term employment
✓ Employee is hired directly by your own company
✓ Payroll processed by IPS
IPS is your global payroll solution for fast, successful
cross-border payroll — without setting up your own local entity.
Payroll in Spain: What Employers Need to Know
Companies employing staff in Spain need to navigate a number of local specifics around payroll, social security, and labor law. The information below gives you an overview of the key requirements for employers in Spain.
Employer Costs and On-Costs in Spain
Employer on-costs range from 29% to 32% of gross salary, up to the contribution ceiling of €4,070.10.
This is made up as follows:
→ Pension and health insurance: 23.6%
→ Unemployment insurance: 5.5%
→ Vocational training levy: 0.6%
→ Wage guarantee fund: 0.2%
→ Workplace accident insurance: 1.7%
Social Security in Spain
Spain’s social security system provides coverage for illness, injury, and workplace accidents, unemployment, and maternity and paternity leave. It also includes access to a state pension and other retirement benefits.
With IPS’s international payroll services in Spain, you can be confident your employee is paid in full compliance with Spanish law.
Salary Payments and 14 Monthly Payments in Spain
Annual salary is typically paid out in 14 installments, with the two extra payments made in summer and at Christmas. Where the employment contract specifies otherwise, salary can also be paid in 12 monthly installments.
Labor Law in Spain
Collective bargaining agreements are one of the most important sources of law governing Spanish employment contracts. Government-issued templates, updated regularly, are also commonly used for employment contracts. As a result, special contractual arrangements are uncommon, since the templates already cover the employment relationship comprehensively. An employment contract must be registered with the labor authority.
→ Fixed-term employment contracts are only permitted under strict statutory exceptions.
→ The standard work week totals 40 hours, Monday through Friday.
→ Spain has 14 paid public holidays and, as a rule, at least 22 paid vacation days.
→ Additional paid leave entitlements are set out in collective bargaining agreements, commonly covering events such as bereavement, weddings, and hospital stays of close family members.
Termination and Severance in Spain
→ The notice period is 15 days for both parties.
→ Individual dismissals must be based on economic, technical, organizational, or production-related grounds. Exceptions exist for personal grounds and for cases involving a certain level of illness-related absence.
→ In the case of unlawful dismissal, severance of 33 days’ pay per year of service is due, up to a maximum of 24 months’ salary.
→ In the case of lawful dismissal, severance of 20 days’ pay per year of service is due, up to a maximum of 12 months’ salary.
Employ and Pay Your Team in Spain with Full Legal Certainty
Employing staff in Spain means navigating local requirements around payroll, social security, and employment law. IPS handles Spanish payroll for international companies and helps ensure your employees are paid accurately and in full legal compliance.
Your benefits with our payroll service in Spain:
✓ Payroll fully compliant with Spanish law
✓ Calculation and remittance of Spanish social security contributions
✓ Accounting for local specifics such as 12 or 14 salary payments
✓ Support with employer obligations and payroll compliance
✓ Payroll for your employees in Spain, with no local payroll department needed
Looking to hire employees in Spain or outsource your Spanish payroll? We’ll walk you through the right payroll solution for your needs, one-on-one.
Where We Can Support You
Have Questions?
We’re happy to help — quickly and without any hassle!
Just give us a call: +49 2173 2039568
or send us an email!
