Spain

Contract Types

In Spain contracts may be temporary (fixed) for a specific service, production contingency or temporary replacement or indefinite duration. Contracts will be governed by the Collective Bargaining Agreement (CBA) in place.

Probation

A probationary period may be agreed upon in accordance with a scale corresponding to the classification of personnel in the different professional groups which may go from 3 to 6 months.

Working Hours

40 hours per week, 8 hours per day. Many companies reduce this to 37 or 38 hours per week. Employees may work a maximum of 1,800 hours per year; the weekly distribution may be agreed with the Legal Representation of the Workers in the company. In any case employees may work no more than 9 hours per day.

It is a legal requirement in Spain to record hours worked via a time sheet system.

Overtime

Maximum 80 hours per year. Unless otherwise agreed, overtime shall be compensated by time off in lieu, increased by at least 75%. Such hours can be combined and given by the first week of January the following year at the latest.

Other Financial

Twelve calendar monthly payments, plus a 13th special payment in July and a 14th payment at Christmas. These payments can be prorated over the twelve calendar months instead, at the choice of the employer. For sales employees, a commission plan or quarterly bonus pay is a common benefit.

Other

All contracts must state salary etc, in local currency. All employees must have an annual medical paid for by the employer as well as safety training as relevant to employment before joining the company, and then every 4 to 5 years thereafter. Contracts must go to the Public State Employment Service within 10 days.

A Remote Working Agreement must be appended to the contract if the employee will be working remotely.

If there is a non-compete clause in the contract then the employee can claim 50% of salary for the period of the non-compete following termination.

Corporation Tax 2024

25%

This is the general CIT rate, other taxes may apply, depending on the type of company and its type of business.

Consumption Tax

21%

Employers’ Social Security

30.4% up to a salary ceiling

Plus a variable rate for occupational accidents

(1.5% for office work)

Employees’ Contributions

6.45%

Income Tax Rates

 Up To 12,450 – 19%

 12,450 – 20,200 – 24%

 20,200-35,200 – 30%

 35,200-60,000 – 37%

 60,000 – 300,000 – 45%

 Over 300,000 – 47%

These rates and ceilings may vary in different regions.

In addition Spanish employees receive a tax free allowance depending on their personal circumstances.

Notice

The notice period will depend on the CBA in place. The employer should give 15 days’ notice or payment in lieu of notice. When dismissal is due to disciplinary reasons, no notice period is required.

At the end of a temporary (fixed term) contract, the employee is given notice as stated in the contract. Employees are entitled to the proportional part of any extra pay and holidays accrued, as well as a termination payment of 12 days’ salary per year worked.

Voluntary Resignation

The employee must give notice according to the employment contract, which must be in writing. If he does not, the employee can be penalised by deducting the payment of wages equivalent to the days without notice. No severance is required in the case of resignation.

Termination Process

No notice is required and no severance pay is due if the termination is for permitted reason or just cause e.g gross misconduct.

If the employer wants to dismiss for other reasons, then 30 days’ notice should be given (or as per the contract) and 20 days of salary for each year worked is paid to the employee 15 days before the end date. A letter should be provided to the employee stating the reasons for dismissal.

In practice, 33 days’ gross salary for each year of employment plus one month’s payment in lieu of notice is usually paid to avoid going to court.

If a dismissal is declared unfair then the employer must pay 45 days’ notice, if employed before 2012, and 33 days thereafter, up to a maximum of 42 months’ salary.

The employee is allowed 6 hours per week during the notice period to look for work.

A termination which takes place when an employee is on sick leave will be null and void and subject to a financial penalty.

During Probation

Allowed without notice. There is no need to prove cause and the employee has no right to any indemnity.

National Public Holidays:

9 statutory holidays plus regional holidays up to 14 days in total.

New Year’s Day – 1st January

No day given in lieu

Epiphany – 6th January

No day given in lieu

Good Friday – 29th March

Day given in lieu N/A

 Labour Day / May Day – 1st May

No day given in lieu

Assumption of the Virgin – 15th August

No day given in lieu

Hispanic Day – 12th October

No day given in lieu

All Saints Day – 1st November

No day given in lieu

Constitution Day – 6th December

No day given in lieu

Christmas Day – 25th December

No day given in lieu

Comments

* While employers are not obliged to give days off in lieu when a holiday falls at the weekend, it is customary practice.

 Each of the autonomous regions choose additional dates according to their own traditions which may differ every year. The total number of public holidays cannot exceed 14.

Paid legal entitlement (working days)

30 calendar days or 23 business days per year. Employers may agree more in the written contract or the CBA. In practice most employers give 23 days plus the period between Christmas and New Year.

Carry over permitted

There is no legal requirement for carry over in Spain, thus generally, annual leave must be taken in the year accrued; exceptions apply when the employee is unable to take holiday, for example through sickness.

Payment in lieu allowed

Annual leave cannot be paid out except when leaving the company.

Sick

The first 3 days of sick leave are unpaid. From the 4th to the 15th day, the employee is entitled to 60% of normal wages from the employer. From the 16th to the 20th day, the employee is entitled to 60% paid by employer, and reimbursed by Social Security. From the 21st day onwards, the employee is entitled to 75% of pay from the employer which is paid back by Social Security. Sick leave can be a maximum of 18 months, after which the situation is reviewed depending on length of service, status of the employee and the collective bargaining agreement.

Depending on the Collective Bargaining Agreement, the employer may supplement sick pay up to 100% of full pay for illnesses over 30 days. This is usually paid from the 5th day of sickness up to 12 months.

Employees cannot be dismissed whilst on sick leave.

Maternity

16 weeks, including a mandatory 6 weeks after the birth. The government pays benefits during maternity leave, capped at Euro 4,070 per month.

Employers often top this amount up to full pay. New mothers are also entitled to one hour off per day for breastfeeding a child under 9 months. This is paid by the employer. These hours can be combined into 15 full days. 18 weeks maternity leave is given for complicated or multiple births.

An employee who has been with the company for at least one year is entitled to be granted the possibility of being placed on unpaid leave for a period of not less than 4 months and no more than 5 years.

Paternity

16 weeks, 6 weeks after the birth must be taken, the remaining 10 weeks are voluntary and can be taken during the child’s first year. This is increased to 18 weeks for complicated or multiple births. Paid for at 100% by the state (capped as for maternity leave) if the father is registered with the social security office and has made 180 days’ contributions during the prior 7 years, or a total of 360 days during his career. The employer remains liable for taxes pertaining to salary.

Only full weeks of leave may be taken.

Adopting parents are entitled to the same leave as natural parents.

Marriage

15 calendar days for marriage.

Bereavement

2 days or 4 if travel is required.

Other

Moving house 1 day, 2 days or 4 days if travel is involved to care for a sick relative, up to 2 years’ unpaid leave to care for a sick family member. More could be stipulated in the CBA.

Medical

Most employers provide medical insurance which is complementary to the state provision. Typical policies will include dental, have no deductibles and a waiting period of 6 months.

Life

Group life policies including an element of long and short term disability plus accidental death are common. Death benefit is typically 4 years’ salary.

Pension

Some employers provide private pensions with typical contributions being 5%.