If you’re setting up a business in Spain, you may need to hire local or international employees. But the process is heavily regulated, and non-compliance can result in serious fines.
This guide covers everything foreign employers need to know about contracts, payroll, social security, and more when hiring staff in Spain.
📋 Types of Employment Contracts in Spain
Spain has a wide variety of employment contracts, but these are the most common:
| Contract Type | Description |
|---|---|
| Indefinite (Contrato indefinido) | Permanent, open-ended employment |
| Fixed-term (Contrato temporal) | For temporary or seasonal work |
| Internship/Training | For students or recent grads |
| Part-time | Reduced weekly hours, proportionate salary |
🖊️ All employment contracts must be in writing and registered with SEPE (Spain’s public employment service).
💶 Minimum Wage & Salary Rules
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Minimum wage in Spain: around €1,134/month (gross)
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Salaries must be paid monthly (or bi-weekly in some industries)
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Additional two bonus payments are usually required in June and December
Many industries also have collective agreements (convenios colectivos) that set minimum salaries, working hours, and benefits.
🧾 Payroll Obligations for Employers
When hiring in Spain, your business must:
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Register with the Social Security system as an employer
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Obtain a contribution account code (CCC)
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Enroll each employee into the system
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File and pay monthly payroll taxes
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Submit pay slips (nóminas) that show gross/net pay and deductions
Common Deductions:
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Social security contributions (~6.4% from employee, ~30% from employer)
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Income tax withholding (IRPF)
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Other deductions (union dues, pension plans if applicable)
🧑💼 Employers must submit these via the RED system and submit IRPF declarations (Modelo 111 & 190) to the tax agency.
🩺 Social Security Contributions
Both employers and employees contribute to the Spanish Social Security system. It covers:
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Healthcare
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Pensions
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Disability benefits
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Unemployment insurance
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Maternity/paternity leave
| Contribution Type | Employer % | Employee % |
|---|---|---|
| General (total) | ~30% | ~6.4% |
All payments must be made to Tesorería General de la Seguridad Social (TGSS).
🔐 Legal Protections for Employees
Spain strongly protects workers’ rights. Employers must comply with:
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Working hour limits (max 40/week)
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Paid vacation (30 days per year)
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Sick leave and maternity/paternity rights
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Notice periods for termination
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Anti-discrimination laws
Wrongful dismissal or non-compliance with labor laws can lead to legal claims and fines.
🌎 Hiring Non-Spanish or Foreign Workers
You can hire:
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EU/EEA citizens without restrictions
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Non-EU nationals only if they have a valid Spanish work permit
To sponsor a non-EU worker, your business must:
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Prove the position can’t be filled by a local
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Offer a salary above minimum thresholds
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Comply with Spain’s foreign labor quota system (except for exempt professions)
🧠 What About Hiring Freelancers?
Instead of hiring staff, you can engage autónomos (self-employed) as contractors. This reduces tax and social security obligations, but:
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You cannot treat freelancers like employees
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Freelancers must be truly independent (own schedule, multiple clients, etc.)
If misclassified, you may face labor inspections and fines.
⚖️ Borderless Lawyers: Full Hiring Support for Foreign Companies
We help foreign business owners:
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Draft compliant employment contracts
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Register your business for payroll & Social Security
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Handle monthly filings and withholdings
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Structure legally compliant freelancer relationships
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Manage cross-border employment and sponsorships