Last reviewed: October 2026
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To hire employees in Spain in 2026, most companies making a first hire use an employer of record such as Deel or Rippling, then move to a local entity once headcount justifies it. Budget for employer Social Security of 30.65% of the contribution base, plus an accident premium that depends on the activity.
This guide covers contracts, working time, minimum wage, employer contributions, leave, dismissal, and misclassification risk. It is general information, not legal or tax advice, and a qualified Spanish employment lawyer or tax adviser should confirm your specific situation.
One caution before the detail: Spanish labor rules come from the Workers’ Statute plus sector collective agreements (convenios colectivos). The statute’s probation rules, for example, are subject to any limits set in collective agreements. Identify the right agreement for each role before you draft an offer, and have Spanish counsel confirm which agreement applies and what it changes. Several figures in this guide come from secondary sources, and the primary tables are updated every year.
Why companies hire employees in Spain
Companies hire employees in Spain for EU-based talent, a euro payroll, and working hours that overlap with both European and US East Coast teams. The tradeoff is a protective legal framework. Severance accrues from the first day of work, and dismissals need a valid legal ground.
That makes the setup decision and the contract terms more important in Spain than in at-will markets. Get them right at hire, not at termination.
Your three options: EOR, local entity, or contractors
| Option | Best for | Main risk |
|---|---|---|
| Employer of record | First hires, market tests | Ongoing platform fee |
| Local entity | Teams beyond a few hires | Admin and compliance load |
| Contractor | Genuinely independent projects | Misclassification |
Employer of record
An EOR becomes the legal employer in Spain, signs the contract, runs payroll, and handles Social Security filings, while you direct the daily work. If the model is new to you, read our plain-English guide, What Is an Employer of Record?, and compare it with a PEO in EOR vs PEO.
Vendor fees for Spain vary and many vendors do not publish them. Treat any monthly per-employee price as something to confirm in writing before you sign.
Local entity
Setting up your own Spanish company gives you full control and the lowest per-head cost at scale. You then own registration with the Social Security system, payroll, collective agreement compliance, and dismissal procedure. We did not find a reliable primary source for current setup costs or timelines, so we leave them out. Get a quote from a Spanish gestoría or law firm.
Contractors
Contractors work for genuinely independent engagements only. Spanish law looks at the reality of the relationship, not the label on the invoice. We cover the risks below and in our guide to contractor misclassification.
Employment contracts and probation
The Workers’ Statute (official text on the BOE) is the baseline. A probation period must be agreed in writing. Absent a collective agreement rule, the limits are:
- Qualified technicians: up to six months.
- Other workers: up to two months, or up to three months in companies with fewer than 25 employees.
- Short fixed-term contracts: one month maximum for contracts of six months or less, unless a collective agreement says otherwise.
A probation clause is void if the worker already performed the same functions at the company under any contract type. During probation, either side can end the contract without notice or severance, but anti-discrimination rules still apply. Dismissing a pregnant employee during probation is void unless the reason is unrelated.
Fixed-term contracts need a stated cause. When a fixed-term contract is for production circumstances, its duration cannot exceed six months, though a sector-wide collective agreement can extend that to one year. If you plan to hire employees in Spain on a permanent basis, use an indefinite contract from the start. The limits above are the statutory defaults; the collective agreement for the role can shorten or change them, and a probation or fixed-term clause that does not fit the agreement can be void. Have a Spanish employment lawyer or gestoría review the contract before it is signed.
Working hours, overtime, and public holidays
The statutory maximum is 40 hours of effective work per week, averaged over the year, under Article 34.1 of the Workers’ Statute. A 37.5-hour week was proposed, but the bill failed on 10 September 2025, with 178 votes for rejection and 170 against. Some online guides still describe 37.5 hours as law. Check the current status with your adviser, and check whether your collective agreement already sets a shorter week.
Overtime is capped. The statute limits overtime to 80 hours a year, and hours compensated with time off within four months do not count toward that cap. Keep a daily record of hours worked.
Public holidays follow a national calendar plus regional and local days. We did not find a primary source for the 2026 count in every region, so confirm the calendar for the employee’s work location.
Minimum wage and typical salaries
For 2026, the Council of Ministers set the minimum wage (SMI) at 1,221 euros per month in 14 payments, a 3.1% increase. That equals 17,094 euros gross per year, and the increase applies retroactively from 1 January under Royal Decree 126/2026. If extra payments are prorated over 12 months, the monthly equivalent is 1,424.50 euros.
The 14-payment structure matters for offers: salary is commonly quoted as an annual gross figure, and the employee receives two extra payments a year, or has them prorated into 12 monthly payments. State which in the contract.
We did not find a reliable primary source for typical salaries by role, so we do not quote ranges. Collective agreements set minimum pay scales by job group, and those scales often matter more than the national floor.
Mandatory benefits and employer costs
Employers and employees both contribute to the Social Security system. These are the 2026 general-regime rates for a permanent contract:
| Contribution | Employer | Employee |
|---|---|---|
| Common contingencies | 23.60% | 4.70% |
| Unemployment (permanent) | 5.50% | 1.55% |
| Unemployment (fixed-term) | 6.70% | 1.60% |
| FOGASA (wage guarantee) | 0.20% | None |
| Vocational training | 0.60% | 0.10% |
| MEI (pension equity levy) | 0.75% | 0.15% |
| Workplace accidents | Activity tariff | None |
| Total, permanent | 30.65% plus accidents | 6.50% |
The MEI rose to 0.9% in 2026, split 0.75% employer and 0.15% employee. The accident premium is paid entirely by the employer and depends on the activity’s tariff, so office roles cost less than field roles.
Contributions are calculated on a base with a ceiling. The 2026 maximum monthly base is 5,101.20 euros, and an additional solidarity contribution applies to pay above that ceiling. The base includes the prorated share of extra payments.
As an illustration, at the minimum wage’s 12-month equivalent of 1,424.50 euros, a 30.65% employer rate adds roughly 437 euros per month before the accident premium. When you hire employees in Spain at higher salaries, the percentage holds until the base ceiling applies. Ask any EOR whether its quote already includes these contributions or lists them separately. The illustration is our own rounded arithmetic, and the rates in the table mix the official Social Security page with secondary summaries. Confirm the current year’s bases and rates against the Seguridad Social tables or with your payroll provider before you budget or run payroll.
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Annual leave | 30 calendar days minimum |
| Sick leave | Social Security system; confirm details |
| Maternity (each birth parent) | 19 weeks |
| Paternity (other parent) | 19 weeks |
| Single-parent families | 32 weeks |
| Public holidays | National plus regional calendar |
Annual leave is paid and cannot be replaced by a cash payment except when the contract ends. Thirty calendar days works out to roughly 22 working days.
Birth leave changed recently. Since 31 July 2025 it lasts 19 weeks for each parent, and mothers and other parents have had equal durations since 2021. Six weeks are mandatory right after birth, 11 are flexible until the baby is 12 months old, and 2 can be used until the child turns 8. During the leave, the employee receives a Social Security benefit instead of salary, paid at 100% of the regulatory base, so the cash cost to you is mainly cover for the absence.
For sick leave, the common contingencies contribution funds retirement, disability, and common-illness leave. We did not verify the employer-paid portion of sick pay from a primary source, so ask your adviser or EOR how it works in your agreement.
Termination, notice, and severance
You need a valid ground to dismiss. The three grounds are disciplinary, objective (economic or organizational), and collective redundancy. Severance depends on which ground applies and whether a court agrees.
| Dismissal type | Severance per year | Cap |
|---|---|---|
| Fair disciplinary | None | Not applicable |
| Objective | 20 days of salary | 12 months |
| Declared unfair | 33 days of salary | 24 months |
The 33-day rate applies to service accrued from 12 February 2012 onward. Objective dismissal carries a flat 15 days’ notice, and severance must be paid together with the dismissal letter. A procedural slip can push a dismissal into unfair territory, which is the expensive outcome. The severance figures and notice periods here are the general statutory rules; collective agreements, seniority, and the facts of the case change the result, and the calculation and the dismissal letter must be right on the day. Do not dismiss a Spanish employee without local counsel reviewing the ground, the procedure, and the severance computation first.
Employees move fast if they disagree. The right to challenge a dismissal expires after 20 working days. For employee resignations, the default notice is 15 days, and some collective agreements provide 30.
Collective redundancies need a consultation process. That is at least 30 calendar days, or 15 days for companies with fewer than 50 workers. Senior executives and agreement-specific roles can have different rules.
Payroll, taxes, and currency
Payroll runs in euros. The employer registers the employee with Social Security, withholds the employee’s contribution and income tax from pay, and remits both along with the employer’s share. Income tax withholding depends on the employee’s personal circumstances and region, and we did not source rate tables, so we do not quote them.
Use an EOR or a Spanish payroll provider that handles monthly filings, the extra payments, and agreement-specific pay items. If you pay in a currency other than euros, expect conversion costs and confirm who bears them.
Contractor misclassification risk in Spain
Spanish authorities assess substance over form. Fixed hours, company tools, a manager who directs the work, and a single client all point toward employment. If a contractor is reclassified, expect exposure to back Social Security contributions and employment-law claims. If you then end the relationship, it may be treated as a dismissal, with the severance rules above.
We did not find a primary source for current penalty ranges, so we do not quote them. Our misclassification guide explains the general risk factors. If the person works like a team member, hire employees in Spain through an EOR instead. Classification is decided on the facts under Spanish law, and the indicators above are a summary, not a test. If you already have Spanish contractors who look like employees, have local counsel review them before changing anything, since conversion does not by itself resolve past periods.
Best employer of record platforms for Spain
We have not verified Spain-specific pricing, entity ownership, or in-country coverage for any vendor below, so those items are undisclosed in this guide. Ask each vendor for a written Spain quote, the name of the Spanish employing entity, and how it applies your collective agreement. Our Suite Score reviews grade vendors on those points.
- Deel: our first call for a first Spanish hire. It is a broad global platform that covers EOR, contractors, and payroll, which helps if Spain is one of several countries.
- Rippling: a strong fit if you want HR, IT, and payroll in one system and expect to grow headcount in Spain alongside other regions.
Request quotes from both and compare the contract terms on termination costs, who pays severance, and notice to exit the EOR.
Frequently asked questions
Can I hire employees in Spain without a local entity?
Yes. An employer of record employs the person in Spain on your behalf. You manage the work, and the EOR handles the contract, payroll, and filings.
What is the minimum wage in Spain in 2026?
It is 1,221 euros per month in 14 payments, or 17,094 euros per year. Your collective agreement may set higher minimums for the role.
How much do employer contributions add on top of salary?
For a permanent contract, the employer rate is 30.65% of the contribution base, plus an activity-based accident premium. The employee pays 6.50% separately.
How long can a probation period last?
Up to six months for qualified technicians and two months for others, unless a collective agreement says otherwise. Companies under 25 employees can use three months for non-technicians.
Is the 37.5-hour work week law in Spain?
Not as of our research. The bill was rejected in September 2025, so the 40-hour weekly maximum, averaged annually, still applies. Confirm the current status before finalizing contracts.
Can we rely on this guide to draft contracts or run payroll in Spain?
Use it to understand the structure and estimate cost, not to draft, pay, or dismiss. Some figures come from secondary sources, the rates and bases change each year, and collective agreements override several of the defaults above. Have a Spanish employment lawyer, gestoría, or EOR confirm every number for your role, sector, and region before you act.