🇪🇸 Understanding Payroll in Spain as a Foreign Company
Running payroll in Spain is highly regulated. Whether you’re hiring one local employee or building a team, you must comply with Spanish labor law, tax withholding, and social security contributions.
✅ Mandatory payroll structure
✅ Monthly filings required
✅ Fines for delays or errors
✅ Often handled through legal/accounting partners
💡 Our legal team manages payroll for SLs, startups, and remote founders operating in Spain.
📄 What Payroll in Spain Must Include
Each monthly payslip (nómina) must contain:
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Employee name, NIE, and job title
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Gross salary
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Social security contributions (employee + employer)
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IRPF withholding (personal income tax)
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Net salary paid
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Accrued vacation and bonuses if applicable
📎 Most companies use software + legal/HR advisors to generate legally valid payslips.
📊 Social Security Contributions Breakdown
| Contribution Type | Employer % | Employee % |
|---|---|---|
| General Social Security | ~23.6% | ~4.7% |
| Occupational Risk Insurance | ~1.5%–7% | – |
| Unemployment Fund | ~5.5% | ~1.5% |
| Training, Wage Guarantee | ~0.7% | ~0.1% |
| Total Approximate | ~30% | ~6.35% |
✅ Employer pays the full amount monthly to TGSS
✅ Employee share is withheld from salary
💡 Foreign founders should budget an additional 30% on top of gross salary to cover mandatory contributions.
📅 Payroll Timeline & Filing Requirements
| Task | Frequency | Where to File |
|---|---|---|
| Generate payslip | Monthly | Internal / payroll system |
| Pay employee salary | Monthly | Bank transfer |
| Submit social security (TGSS) | Monthly | Sistema RED (TGSS) |
| Submit IRPF withholding (Modelo 111) | Quarterly | Agencia Tributaria (AEAT) |
| Annual summary (Modelo 190) | Yearly | AEAT |
💡 Delays in TGSS payments generate automatic penalties and can block hiring.
⚠️ Common Mistakes to Avoid
⛔ Missing employer registration (CCC)
⛔ Incorrect IRPF withholding
⛔ Failing to notify TGSS before employee starts
⛔ Not filing Modelo 111 / Modelo 190 correctly
⛔ Hiring remote staff without proper registration (even if part-time)
🧾 Payroll for Remote Companies in Spain
Many foreign-owned companies:
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Hire remote Spanish staff from abroad
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Set up an SL or use EORs (Employer of Record services)
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Delegate payroll to legal or fiscal reps (like our firm)
We offer turnkey payroll solutions, including:
✅ TGSS + AEAT registration
✅ Bilingual payslips
✅ IRPF calculations and filings
✅ End-of-year summaries (Modelo 190)
🛡️ Labor Inspections & Audits
Spain has active labor inspections. Risk triggers include:
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Missing IRPF or TGSS payments
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Hiring freelancers instead of employees
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Employee complaints (e.g. unpaid overtime)
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Lack of written contracts or payslips
📌 Penalties can exceed €3,000+ per infraction.
🧑💼 Our Payroll & Social Security Services
At Borderless Lawyers, we support:
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Employer registration (CCC)
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Employee onboarding
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Monthly payroll & payslips
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IRPF & social security filing
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Audit protection and labor compliance
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Residency-linked payroll strategy
📞 Simplify Payroll in Spain with Legal Confidence
Running a team in Spain? We handle the entire payroll process — from hiring to compliance — so you can focus on your business.
👉 Contact us to manage payroll and social security filings with full legal support.