Country Guides
Hiring Employees in Spain with an EOR
A beginners' guide comparing the cost, complexity and process of hiring through an Employer of Record (EOR) vs. setting up an entity in Spain.
How to Hire Employees In Spain
Last updated: January 20, 2025
You've got three options when it comes to hiring employees in Spain:
Assuming you are looking to hire employees in Spain rather than freelancers, let's compare your two options head-to-head in more detail.
Using an EOR vs an Entity in Spain
| Aspect | EOR Services | Setting up an Entity |
|---|---|---|
| Setup Time | 1-2 business days | 2-3 months |
| Initial Cost | €0 | €25,000-45,000 |
| Ongoing Costs | €499-699/month per employee | Legal, accounting, compliance fees |
| Legal Responsibility | Managed by EOR | Internal responsibility |
| Employment Compliance | Managed by EOR | Internal responsibility |
| Benefits Management | Managed by EOR | Internal responsibility |
| Tax Filing and Contributions | Managed by EOR | Internal responsibility |
| Penalties for Non-compliance | Managed by EOR | Up to €150,000 per violation |
| Scalability | Highly flexible | Requires additional investment |
| Exit Process | Simple contract termination | Complex entity dissolution |
What are the best EOR Services in Spain?
Not all EOR services have an entity established in Spain, and some rely on third parties. These three operate Spanish entities, as well as having 24/7 (human) support and a comprehensive offering.
These services handle all aspects of employment including payroll, benefits, and compliance, acting as the legal employer while you maintain day-to-day management of your team.
From $599/month
- Owns an entity in Spain
- Payroll
- Benefits management
- Legal Compliance
- Tax management
- Employee onboarding
Recommended
From $499/month
- Owns an entity in Spain
- Payroll
- Benefits management
- Legal Compliance
- Tax management
- Employee onboarding
From $599/month
- Owns an entity in Spain
- Payroll
- Benefits management
- Legal Compliance
- Tax management
- Employee onboarding
Some links above may be affiliate links. We may receive a commission for purchases made through these links at no additional cost to you.
Recommended EOR Service
OysterHR
OysterHR
Taxes in Spain
Spain has a comprehensive tax system that affects both corporations and individuals. Here are some of the key taxes to be aware of:
Corporate Taxes
- Corporate Income Tax: 25%
- Reduced Rate for SMEs: 15%
- VAT (Standard Rate): 21%
- Social Security Contribution: 29.9%
- Work Accident Insurance: 1.5%
- Professional Training: 0.6%
Individual Taxes
- Personal Income Tax: Progressive 19-47%
- Social Security: 6.35% for employees
- Capital Gains Tax: 19-26%
- Wealth Tax: 0.2-3.5% (varies by region)
Note: Tax rates and regulations are subject to change. This information is for general guidance only. Please consult with a qualified tax professional for specific advice.
Mandatory Benefits
Vacation Leave
- Minimum 30 calendar days/year
- 14 paid public holidays
Health Coverage
- Public healthcare system access
- Work accident insurance
- Disability coverage
Parental Leave
- 16 weeks paid maternity leave
- 16 weeks paid paternity leave
- Job protection guaranteed
Employee Rights in Spain
Basic Rights
- Written Contract: Required for all employees
- Compensation: 14 monthly payments per year (including extra payments in July and December)
- Safe Working Environment: Guaranteed health and safety measures
- Union Rights: Freedom of association and collective bargaining
Additional Protections
- Non-discrimination: Protected against all forms of discrimination
- Privacy: Strong data protection rights
- Digital Disconnection: Right to disconnect after working hours
- Remote Work: Right to request flexible working arrangements
Hours of Work
Standard Working Hours
- Weekly Hours: 40 hours maximum
- Daily Hours: 9 hours maximum
- Break Periods: 15 minutes for 6+ hour shifts
- Rest Periods: 12 hours between workdays
Overtime Regulations
- Maximum Overtime: 80 hours annually
- Compensation: As agreed in contract or collective agreement
- Night Work Premium: 25% increase
- Holiday Rate: 75-100% increase
End of Employment
Notice Periods
- Standard Notice: 15 days minimum
- Senior Positions: 30 days notice
- Collective Dismissals: 30-45 days
- During Probation: No notice required
Severance Pay
- Standard Rate: 20 days per year
- Maximum Cap: 12 months' salary
- Unfair Dismissal: 33 days per year
- Maximum for Unfair: 24 months' salary
Labor Laws in Spain
Key Labor Laws
- Working Hours: 40-hour week, 9 hours per day
- Employment Contracts: Written contracts mandatory
- Notice Periods: 15-30 days minimum
- Probation Period: 2-6 months depending on position
Special Protections
- Discrimination: Protected characteristics include gender, age, race, religion
- Harassment: Zero tolerance policy
- Health & Safety: Strict workplace safety requirements
- Work-Life Balance: Right to request flexible arrangements
Frequently Asked Questions about Hiring in Spain
When using an Employer of Record (EOR) service in Spain, you can typically onboard an employee within 1-2 business days. This includes:
- Setting up the employment contract in Spanish (required by law)
- Registering with Spanish Social Security
- Setting up payroll and tax withholding
- Arranging mandatory insurance coverage
Spanish law requires employers to provide:
- 30 calendar days of paid vacation annually
- 14 paid public holidays
- 16 weeks paid maternity leave
- 16 weeks paid paternity leave
- Social security coverage
- Work accident insurance
- 14 monthly payments per year (including extra payments in July and December)
The main employment taxes in Spain include:
- Employer Social Security contributions: 29.9% of salary
- Employee Social Security contributions: 6.35% of salary
- Personal Income Tax (IRPF): Progressive 19-47%
- Work Accident Insurance: 1.5%
- Professional Training: 0.6%
Spanish employment termination requires:
- Minimum notice period: 15 days (30 days for senior positions)
- Severance pay: 20 days per year worked (capped at 12 months)
- Unfair dismissal compensation: 33 days per year (capped at 24 months)
- Written notification in Spanish
- Valid cause for termination
Required documents include:
- Written employment contract in Spanish
- Employee's NIE (tax identification number)
- Social security registration
- Bankaccount details for salary payments
- Work permit (for nonEU citizens)
- Professional qualifications (if required for the role)