Employer of Record (EOR) Spain - Hire & Pay Employees & Contractors with a Global PEO | Employer of Record (EOR)

An Employer of Record (EOR) in Spain is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.

Discover the key considerations and essential details you should be aware of before you hire your remote team in Spain.

Facts About Spain

Spain has rapidly emerged as a strategic destination for companies looking to tap into highly skilled talent while keeping operating costs under control. With thriving startup ecosystems in major cities, strong governmental support for innovation, and a deep pool of experienced developers, Spain presents a compelling opportunity for global employers hiring through an Employer of Record (EOR) solution.

A Strong Tech and Startup Ecosystem

Spain’s entrepreneurial landscape is centered around four key cities: Barcelona, Madrid, Valencia, and Malaga. Each city offers a unique blend of talent, infrastructure, and industry specialization:

Barcelona leads as Spain’s top startup ecosystem, ranked 6th in Western Europe and 33rd globally. It is especially attractive to international talent and has seen rapid growth in industries like healthtech, energy and environment, and social & leisure. Successful companies such as Wallapop and organizations like Glovo contribute to its vibrant ecosystem.
Madrid, ranked second nationally and 10th in Western Europe, is a hotspot for corporates and venture capitalists. It has strong momentum in areas like marketing & sales and hardware & IoT, with startup success stories such as MyInvestor and support from major institutions like Telefonica.
Valencia ranks third in Spain and 42nd in Western Europe. Known for its focus on Foodtech, Social & Leisure, and Hardware & IoT, it offers a lower-cost environment with rising credibility—bolstered by companies like Voicemod.
Malaga is an emerging innovation hub, growing in popularity among startups and international companies exploring new bases in Southern Europe.

What Sets Spain Apart

Spain’s appeal to international employers lies in several key differentiators:

A high density of experienced developers and technical talent.
Competitive salaries and cost-effective business operations.
Two well-connected startup powerhouses—Barcelona and Madrid—that complement each other: one as a magnet for global talent, the other as a center of corporate and investment activity.

Challenges to Be Aware Of

Despite its growth, Spain’s tech ecosystem faces a few hurdles:

Regulatory complexity and bureaucratic delays can slow down new business operations.
The talent pool, while strong, has a shortage of senior professionals and SaaS specialists.
There’s a lack of major startup exits and limited Series C+ funding rounds, which can impact scaling efforts.

Government Backing and Legal Framework

To support its growing innovation economy, the Spanish government introduced the Startup Law (Law 28/2022) as part of its Entrepreneurial Nation Spain initiative. This law aims to reduce barriers and stimulate entrepreneurship through the creation of the National Entrepreneurship Office (ONE) and its digital platform,one.gob.es.

The ONE Platform, launched by Red.es under the Ministry for Digital Transformation, serves as a national collaboration hub for entrepreneurs, investors, and ecosystem builders. It plays a vital role in accelerating innovative projects, promoting knowledge-sharing, and enhancing the visibility of Spain’s tech capabilities.

Employment Contracts in Spain

Employment contracts in Spain are highly regulated and must follow specific formats and procedures set by Spanish labor authorities. They are governed by the Spanish Labour Act (Estatuto de los Trabajadores) and relevant collective bargaining agreements (convenios colectivos).

Language Requirements

Employment contracts must be written in Spanish.
Bilingual contracts are allowed (e.g., Spanish + English), but the Spanish version always prevails in case of any legal dispute or interpretation issues.

Standardized Format

In Spain, employment contracts are not customized documents created from scratch by employers.
Instead, employers must use standardized templates issued by the Public State Employment Service (SEPE), known as Contrato de Trabajo.
These contracts define the employee–employer relationship and serve as the official record of employment.
Employers may attach annexes for additional clauses (e.g., confidentiality, non-compete), but the core contract must follow the SEPE format.

Types of Contracts & Requirements

SEPE contracts can cover full-time, part-time, and intermittent work.
Contracts can be verbal or written, but any employment lasting more than four weeks must be documented in writing using the SEPE template.
Common contract types include:

Contrato de Trabajo Indefinido (Permanent)
Contrato Temporal (Fixed-term)
Contrato de Formación y Aprendizaje (Training & Apprenticeship)

Contract Registration

All employment contracts must be registered with the Labour Authorities through SEPE’s Electronic Office (Sede Electrónica del SEPE).
After completing the SEPE-issued contract, employers must submit (upload) it within 10 calendar days from the employee’s start date.
This step is mandatory for compliance and legal validation.

Employment Laws in Spain

Spain’s employment laws provide strong worker protections, structured working conditions, and clear employer obligations under the Workers’ Statute (Estatuto de los Trabajadores). Key aspects include:

Minimum Wages

Spain's national minimum wage, known as the Salario Mínimo Interprofesional (SMI), sets the legally required gross monthly income for all full-time workers, regardless of age or contract type. It is typically paid in either 14 or 12 installments. In 2025, the minimum wage is €1,184 per month when paid over 14 payments, which includes two statutory bonuses (summer and Christmas). If these extra payments are prorated into 12 monthly installments, the gross monthly wage increases to €1,381. While this sets the national baseline, sector-specific collective agreements may establish higher minimums. Employers must comply with the SMI, and failure to do so can result in penalties from Spanish labor authorities.

Working Hours

In Spain, the standard workweek is limited to 40 hours on average per year, with a maximum of 9 hours per day, unless otherwise agreed in a collective agreement. Workers must have at least 12 hours of rest between shifts and take a 15-minute break after 6 continuous hours of work. Stricter rules apply to young workers aged 16 to 18 and for night or shift work. Employers can adjust working hours through collective agreements and must keep a daily record of hours worked. Flexible arrangements are also allowed to help employees balance work and family life.

Overtime Pay

In Spain, overtime is regulated by Article 35 of the Workers' Statute. It is generally voluntary, unless a collective agreement states otherwise. Overtime must be compensated either with pay—at least equal to the regular hourly rate—or with equivalent time off taken within four months. The legal limit is 80 hours per year, excluding hours worked in emergencies or to prevent or repair accidents. Employers are required to record overtime daily and reflect it on the employee’s payslip.

Probation Period

The trial period in Spain is regulated either by collective bargaining agreements or, in the absence of one, by Article 14 of the Workers’ Statute (Estatuto de los Trabajadores). These legal limits are in place to ensure fair treatment and job security for employees.

For most white-collar professionals—such as office-based staff, qualified technicians, managers, and specialists—the relevant maximum trial periods are:

Up to 6 months for roles classified as qualified technicians (e.g., engineers, financial analysts, IT professionals).
Up to 2 months for other white-collar roles not considered qualified.
If employed under a temporary fixed-term contract of 6 months or less, the trial period is limited to 1 month, regardless of job type.

If the employment continues after the trial period without termination, the contract becomes fully effective, and the time served during probation is counted toward the employee’s seniority in the company.

While some trial period rules also exist for non-qualified roles and micro-companies, these are generally not applicable to white-collar employees.

Notice Period

Notice periods in Spain are regulated by the Workers’ Statute (Estatuto de los Trabajadores) and, in some cases, by applicable collective agreements. Both employers and employees have obligations to provide notice under specific circumstances. Here's how it works:

Employer Notice to Employees

Disciplinary dismissal: No notice required; applies to serious misconduct (e.g., disobedience, aggression).
Objective (fair) dismissal: 15 days’ notice plus severance pay.
Collective dismissal: 15 days’ notice, similar to objective dismissal but for multiple employees.
Temporary contract end (over 1 year): 15 days’ notice required.
Permanent contract termination: 15 days’ notice, can be longer based on tenure or agreement.
During probation period: No notice required from either party.
Contract changes: 15 days’ notice for individual changes; 7 days for collective changes.
Geographic relocation: 30 days’ notice required if it involves a change of residence.

Employee Notice to Employer

Voluntary resignation: 15 days’ notice is customary (may vary by contract or agreement).
Leave of absence request: No legal minimum, but 15 days’ notice is recommended.
Short-term leave (marriage, bereavement, exams, etc.): No fixed notice period, but advance notice is encouraged.

13th and 14th Month Salary in Spain

In Spain, employees typically receive two extra payments per year—commonly referred to as the 13th and 14th month salaries—on top of their regular monthly wages. These are:

Summer Bonus: Usually paid in June or July, equal to one month of base salary.
Christmas Bonus: Typically paid in early to mid-December, often before 22 December, also equal to one month of base salary.

Together, they form part of the 14-payment salary structure. Some companies prorate these payments over 12 months, meaning the extra pay is spread out and no separate bonus is issued.

Both bonuses are subject to personal income tax (IRPF). If paid as lump sums, monthly tax withholdings may be higher in the bonus months but are adjusted in the annual tax return.

Pensioners also receive the summer and Christmas bonuses, with the summer bonus paid in mid-July, typically equivalent to one month’s pension.

Employees cannot choose between 12 or 14 payments on their own—agreements must be reflected in the employment contract or collective agreement.

Personal Income Tax in Spain

Spain applies two types of personal income tax depending on the individual’s residency status:

Personal Income Tax (PIT): Applies to Spanish tax residents and covers their worldwide income.
Non-Resident Income Tax (NRIT): Applies to non-residents and only covers their Spanish-sourced income.

Taxable Income Types

Income Type	What it Includes
Savings Income	Dividends, interest, capital gains, life/disability insurance, etc.
General Income	Salaries, business income, rental income, non-capital gains (e.g., lottery wins)

PIT – Savings Income Tax Rates (2025)

Taxable Income Bracket (EUR)	Tax Rate
Up to €6,000	19%
€6,001 to €50,000	21%
€50,001 to €200,000	23%
€200,001 to €300,000	27%
Over €300,000	30%

PIT – General Income Tax Rates (2024 Withholding Scale)

Final rates vary by autonomous community. The table below shows state-level progressive rates for general guidance:

Taxable Income Bracket (EUR)	Tax Due (EUR)	Tax Rate on Excess (%)
0 – 12,450	€0	19%
12,451 – 20,200	€2,365.50	24%
20,201 – 35,200	€4,225.50	30%
35,201 – 60,000	€8,725.50	37%
60,001 – 300,000	€17,901.50	45%
Over 300,000	€125,901.50	47%

NRIT – Non-Resident Income Tax Rates

Type of Income	Tax Rate
General (non-EU/EEA residents)	24%
General (EU/EEA residents)	19%
Capital Gains	19%
Interest	19% (exempt for EU residents)
Dividends	19%
Royalties	24%
Pensions	8% – 40% (progressive)

Special Exemption for Work Abroad

Spanish tax residents may claim a PIT exemption of up to €60,100 per year for employment income earned abroad if:

Work is physically carried out outside Spain.
The employer is not Spanish.
The foreign country levies a tax similar to PIT.
The individual remains a Spanish tax resident.

This exemption cannot be combined with the “non-taxable excess amounts” regime for posted workers.

Work Permits in Spain

When hiring through an Employer of Record (EOR) in Spain, the required work permits depend on the employee’s nationality and role.

EU/EEA/Swiss Nationals

No work permit is required. These individuals can live and work in Spain freely, though they must register locally by obtaining a NIE (Foreigner Identification Number) and a Spanish social security number.

Non-EU Nationals

A valid work and residence permit is required. Under the EOR model, the EOR acts as the legal employer and will sponsor the permit. Key options include:

EU Blue Card (Tarjeta Azul UE)
For highly qualified professionals with a university degree and a salary above a set threshold (usually 1.5× the national average).
Duration: Up to 2 years, renewable.
General Work Permit (Cuenta Ajena)
Standard permit for non-EU workers. Requires proving the role can’t be filled locally, unless it appears on Spain’s shortage occupation list.
Duration: Initially 1 year, renewable for 2 years, then permanent after 5 years.
Intra-Company Transfer (ICT) Permit
For employees transferring from a non-Spanish branch of the same company. Often used in multinational structures.
Duration: Typically 1 to 3 years, depending on the role (executive, specialist, or trainee), and renewable.
Digital Nomad Visa
For remote workers employed by companies outside Spain. Not commonly used in EOR models but relevant for independent contractors.
Duration: 1 year, renewable for up to 5 years with the possibility of permanent residency later.

Employee Benefits in Spain

When hiring through an Employer of Record (EOR) in Spain, employers are required to comply with Spanish labor law and provide the following statutory and common employee benefits:

Statutory Benefits

1. Paid Time Off

Annual Leave: Minimum of 22 working days of paid vacation per year.
Public Holidays: Up to 14 national and regional public holidays.
Special Leave: Additional paid leave for life events such as marriage, bereavement, moving house, or family emergencies.

2. Sick Leave

Days 1–3: Typically unpaid unless covered by a collective agreement.
Days 4–15: Paid at 60% of the salary by the employer.
Days 16–20: Paid at 60%, reimbursed by Social Security.
Day 21 onward: Paid at 75%, also reimbursed by Social Security.
Injury/Occupational Illness: Paid at 75% from day one.
Duration: Paid sick leave can last up to 12 months, extendable to 24 months in certain cases.

3. Parental Leave

Maternity and Paternity Leave: 16 weeks of paid leave for each parent at 100% of salary.
Additional Weeks: 2 extra weeks in the case of multiple births.
Flexibility: 6 weeks must be taken immediately after birth; the rest can be used flexibly.

Additional Benefits Commonly Offered by Employers

1. Health & Wellness

Private Health Insurance: Not mandatory, but commonly offered to supplement the public healthcare system.
Mental Health Support: Increasingly included, with access to therapy or coaching sessions.
Wellness Programs: May include gym memberships, yoga classes, or mindfulness tools.

2. Retirement & Pensions

State Pension: Funded through mandatory Social Security contributions.
Voluntary Pension Plans: Some employers offer additional retirement plans, often co-contributed by the employee and employer.

3. Insurance

Life Insurance: Often included in employee packages, typically covering 2–6× the annual salary.
Disability Insurance: May include long-term or permanent disability coverage.

4. Flexible Compensation & Tax Savings

Meal Vouchers: Tax-efficient benefits often provided through salary sacrifice.
Childcare Support: Contributions toward kindergarten or childcare expenses.

Modern & Remote Work Benefits

1. Home Office Support

Provision of equipment or stipends for setting up a home office.

2. Co-Working Space Reimbursement

Monthly reimbursement for employees who prefer working from shared office spaces.

3. Learning & Development

Annual budgets for courses, training, certifications, or professional development.

4. Team Engagement

Some employers offer virtual social experiences or team bonding allowances.

In Spain, leveraging the services of an Employer of Record (EOR) is essential for businesses venturing into the local employment landscape. The EOR takes charge of intricate compliance matters, manages payroll intricacies, and handles administrative complexities, allowing companies to focus on their core objectives without being burdened by regulatory intricacies. This collaborative approach ensures that employees are onboarded with contracts aligning with Spain's labor laws and practices. As the Spanish business environment evolves, the role of an EOR becomes increasingly vital, offering businesses a streamlined entry and growth path in Spain while maintaining compliance and fostering a conducive work environment.

Southern Europe: EOR Greece | EOR Italy | EOR Spain | EOR Portugal

Contribution Group	Category	Minimum Base	Maximum Base
1	Engineers and Graduates. Senior management excluded from Article 1.3(c) of the Workers' Statute	€1,847.40	€4,909.50
2	Engineers, Technicians, Experts, and Qualified Assistants	€1,532.10	€4,909.50
3	Administrative and Workshop Managers	€1,332.90	€4,909.50
4	Non-qualified Assistants	€1,323.00	€4,909.50
5	Administrative Officers	€1,323.00	€4,909.50
6	Subordinates	€1,323.00	€4,909.50
7	Administrative Assistants	€1,323.00	€4,909.50

Employer of Record (EOR) Spain - Hire & Pay Employees & Contractors with a Global PEO