Overview: Hiring in Spain as a Foreign or Local Company
Hiring employees in Spain involves compliance with Spanish labor law, social security, and tax obligations. Whether you’re an international company opening a branch or a startup growing locally, understanding the rules is essential to avoid liability.
📌 All employment relationships are governed by the Statute of Workers (Estatuto de los Trabajadores) and sector-specific collective agreements.
📄 Employment Contracts in Spain
✍️ Types of Employment Contracts
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Indefinite Contract (Contrato indefinido): The standard form of employment
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Temporary Contract (Contrato temporal): Must be justified by a valid cause (e.g. project or seasonal work)
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Internship or Training Contracts: For young professionals and recent graduates
📝 Contracts must be in writing and submitted to the SEPE (Spanish Employment Service).
💰 Payroll, Salary, and Tax Withholding
💸 Minimum Wage & Salary Rules
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Spanish Minimum Interprofessional Salary (SMI) is reviewed annually
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Employees often receive 14 payments per year (12 months + 2 bonuses in July and December)
📊 Employer Obligations
| Obligation | Details |
|---|---|
| Income Tax (IRPF) | Withheld at source |
| Social Security (Seguridad Social) | Employer contributes ~30% of gross salary |
| Payslip Issuance | Monthly, with breakdown of deductions |
⚠️ Employers must register with the General Treasury of the Social Security (TGSS) before hiring.
📚 Onboarding & Legal Formalities
✅ Step-by-Step Hiring Process:
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Register the company with TGSS and obtain a contribution account code
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Register the employee with Social Security (if not already)
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Sign and register the employment contract with SEPE
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Enroll the employee in payroll
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Provide mandatory training, especially in occupational risk prevention
📂 Keep a digital or paper copy of all contracts and onboarding documents for at least 4 years.
🕘 Working Hours, Leave & Benefits
| Item | Legal Standard |
|---|---|
| Max Working Hours | 40 hours/week |
| Annual Leave | 30 calendar days |
| Sick Leave | Paid after the 4th day (shared employer/state responsibility) |
| Maternity/Paternity Leave | 16 weeks, fully paid |
📌 Overtime, night work, and shifts are regulated by law and may require extra compensation.
📤 Termination & Severance
📉 Termination Types
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Disciplinary Dismissal
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Objective Dismissal (economic or performance reasons)
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Voluntary Resignation
💵 Severance Pay
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Objective dismissal: 20 days per year worked (capped at 12 months)
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Unfair dismissal: 33 days per year worked (up to 24 months)
⚖️ All dismissals must be documented properly, with notice and justification.
🌍 Hiring Foreign Employees
You can hire non-EU nationals in Spain, but they must:
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Hold a valid residence and work permit
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Be registered with Social Security
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Meet visa requirements (if applicable)
💼 Borderless Lawyers can assist with work permit applications, visa sponsorship, and immigration compliance.
💬 Real Client Example
Case: A Dutch tech company opened a branch in Barcelona and hired 5 local employees and 2 remote workers.
Solution: We handled contracts, payroll setup, and Social Security registration.
Outcome: The team was fully onboarded within 3 weeks with full legal compliance.
👨⚖️ How Borderless Lawyers Can Help
We support international companies with:
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✅ Drafting legal employment contracts
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✅ Employee onboarding & registration
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✅ Payroll setup and compliance
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✅ Work permits for foreign hires
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✅ Termination & dispute resolution
🌐 Bilingual HR legal advisors | 🎯 Industry-specific expertise | 📑 Compliant with Spanish labor law
📞 Need Help Hiring in Spain?
Whether you’re hiring your first employee or expanding a local team, Borderless Lawyers ensures your recruitment process is legal, efficient, and employer-friendly.