Global PEO Services (GPS) helps companies hire employees in Spain without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by our Spain PEO, while the new hires and headquarter teams focus on your business goals. Using a Spain PEO is the fastest and most efficient way to develop a workforce in Spain.
When hiring employees in Spain, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Spanish labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Spain. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Spain - Country Overview
Spain is the second-largest country in the European Union and also one of the largest economies in the world. Structural reforms, transparent judicial/regulatory systems, and sound economic institutions facilitate Spain’s economy. The country’s GDP (PPP) is $38,286 per capita. Steady modernization has helped the Spanish economy grow continually, with the industry sector contributing nearly 27% to the country’s GDP. The total value of imports and exports is equal to 65.5% of GDP.
Employment Contracts in Spain
In Spain, an employment contract can be either in writing or verbal. However, during the period of a verbal agreement, either party may necessitate that it be replaced with a written contract.
Some of the details typically mentioned in the written employment contract in Spain include:
- Shift work schedule
- Remuneration structure
- Work and performance system
- and more
The different types of employment relationships are:
- Permanent Employment: In the absence of a formal contract, indefinite employment is the default option. However, those employed under more than two temporary contracts for more than 24 months in 30 months are deemed permanent employees in Spain.
- Fixed-Term Contracts: There are three types of usual fixed-term employment agreements in Spain:
- Contracts for a specific, limited service or job
- Contracts for very high output demands
- Temporary agreements
- Temporary Employment: Per Spanish legislation, employees hired by temporary agencies to third-party user companies are entitled to the same basic employment standards as if they were directly employed by the company for which they work.
A probationary period typically lasts up to 6 months for skilled technicians and 2 months for other workers. Additionally, the period may not exceed 3 months for workers who are not qualified technicians.
Working Hours in Spain
Spain’s work regulations state that employees are not allowed to work more than 9 hours a day and an average of 40 hours a week, averaged over a reference period of 12 months.
Employee Leave in Spain
Employees in Spain are entitled to the following leaves:
- Annual leave in Spain: Per the labor law, employees receive paid annual leave for up to 30 calendar days, which is equivalent to 22 business days of leave.
- Sick leave in Spain: Employees in Spain typically receive sick leave for a maximum period of 12 months (365 days). It can, however, be prolonged for another six months (180 days) if a cure is expected within such time.
- Maternity leave in Spain: Female employees are eligible for 16 weeks of maternity leave (plus two additional weeks for each additional child in the case of multiple births).
- Paternity leave in Spain: Male employees receive 16 weeks of paid paternity leave, up from 12 weeks previously.
The following are the statutory national holidays in Spain:
- January 1 – New Year’s Day
- January 6 – Epiphany
- April 15 – Good Friday
- August 15 – Assumption of Mary
- October 12 – Hispanic Day
- November 1 – All Saint’s Day Holiday
- December 6 – Constitution Day Holiday
- December 8 – Immaculate Conception
Employee Termination in Spain
Individual dismissals on an objective basis are subject to a 15-day notice period, whereas disciplinary dismissals do not require notice. The notice period in Spain typically runs from 15 days to one month, while some collective bargaining agreements require a three-month notice period.
Global Mobility in Australia
There are typically the following categories of visas in Spain:
- Schengen visa for Spanish tourists (valid only up to 90 days)
- Spain visa for business needs (may necessitate an employer to provide an agreement)
- Visa for medical requirements
- Visa for religious purposes, sports, cultural, or film crew
- Visa for associates of official delegations
- Visa for study, research, training, or other types of internships
- Visa for the spouse of a Spanish citizen
- Spanish airport transit visa
- Visa for underage children
For work permits in Spain the Labor Authorities issue Work and Residence Permits to employers who wish to recruit outside the European Union (EU). The employee can apply for a Work Visa in person after receiving the Work and Residence Permit from their employer.
Employee Benefits in Spain
The legal retirement age is 65 for 36 years and 3 months of employment and 65 years and 5 months for those with lesser tenure. Service requirements and age will gradually increase to 65 years for those with 38 years and 6 months of service and 67 for those with lesser service duration by 2027. The social security system provides benefits including medical care, workers’ compensation, retirement pensions, hospitalization, unemployment compensation, and disability payments. The Spanish social security system generally covers the following:
- Loss of ability to work due to an employment-related accident, an occupational disease, or maternity
- Old age
- Loss of job
- Family requirements (assistance for children aged less than 18 or disabled)
All employees including non-Spanish nationals who work in the Spanish territory are required by law to register with the social security system.
The Social Security system in Spain includes the state pension scheme. The pension scheme is financed by a payroll tax on salaries where employees pay 4.7% of their salaries while employers pay amounts equal to 23.6% of employees’ salaries.
Employees registered to work in Spain who makes social security contributions are covered by the state healthcare. Those who are not registered to work in Spain but have been in Spain before April 2012 and earn less than EUR 100,000 can register for the healthcare as a Spanish resident via the local Instituto Nacional de la Seguridad Social (INSS). Individuals can also access state healthcare by contributing each month to ‘pay-in’ public health insurance schemes which are run by autonomous regions. The monthly fee is EUR 60 for those aged less than 65 and EUR 157 for those above 65.
There are 2 types of unemployment benefits in Spain: contributory and non-contributory.
- Contributory Unemployment Benefit
Both employers and employees are required to make contributions to a contingency fund. The benefit is based on the number of contributions and previous average wages. To qualify, individuals are required to register with the employment office as available to work and they must make contributions for a minimum of 360 days over the last 6 years.
- Noncontributory Unemployment Benefit
This benefit is conditional and applies to individuals who are not entitled to contributory benefits whether due to a lack of contributions or an extended period without work.