Employer of Record (EOR) Services in Spain
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Hiring in Spain at a glance
Spain is one of Europe’s most dynamic economies, known for its highly educated workforce, competitive labor costs, and strategic position within the EU market. With strengths in technology, renewable energy, automotive manufacturing, finance, and tourism, Spain offers access to both skilled local professionals and international talent.
Madrid and Barcelona serve as Spain’s leading business hubs. Madrid excels in finance, consulting, and professional services, while Barcelona has become a global center for tech startups, life sciences, and creative industries. Valencia, Seville, and Bilbao are also growing talent markets, particularly in engineering, logistics, and renewable energy.
Spain’s workforce is well-educated, supported by world-class institutions such as the University of Barcelona, Complutense University of Madrid, and IE Business School, producing talent in STEM, business, and finance. English proficiency is improving, especially among younger professionals in global-facing industries.
At the same time, Spain’s labor laws are highly protective of employees. Employers must navigate complex requirements around employment contracts, collective bargaining agreements (CBAs), working hours, overtime, and termination, making compliance a critical challenge. Setting up a local entity requires registration with the Mercantile Registry, Tax Agency, and Social Security, which can take months.
With Gloroots as your Employer of Record (EOR), you can hire employees in Spain in just weeks. Gloroots manages contracts, payroll, social security contributions, and statutory benefits, allowing you to focus on building high-performing teams while ensuring global compliance.
What are the key facts about Spain’s economy and workforce?
Spain has the 4th largest economy in the Eurozone and is a strategic hub for international business within Europe. Traditionally strong in tourism and manufacturing, Spain has been rapidly diversifying into technology, renewable energy, life sciences, and finance. The country is home to multinational corporations such as Santander, Telefónica, Iberdrola, and Inditex (Zara’s parent company), alongside thriving startup ecosystems in Madrid and Barcelona.
The Spanish government is investing heavily in digital transformation and green energy, making the country a leading EU destination for innovation. Spain also benefits from EU membership, offering companies seamless access to the European single market.
Spain’s workforce is highly educated, with over 40% of young adults holding tertiary education degrees. Universities such as University of Barcelona, Complutense University of Madrid, and IESE Business School produce graduates skilled in STEM, finance, and international business. While Spanish is the primary language, English proficiency is rising, particularly in multinational sectors like IT and finance.
For employers, Spain’s labor market combines deep talent pools with strong employee protections under collective bargaining agreements (CBAs) and national labor law. This makes global compliance essential when hiring directly. Many companies use an Employer of Record (EOR) like Gloroots to simplify hiring and payroll.
Data Snapshot: Spain’s Workforce
Ready to access Spain’s highly skilled workforce? Hire employees in Spain with Gloroots to ensure fast, compliant hiring.
What is the work culture and talent pool like in Spain?
Spain’s work culture blends collaboration, flexibility, and strong interpersonal relationships with increasing internationalization. While some traditional sectors still reflect hierarchical management styles, modern industries such as tech and finance often emphasize teamwork, innovation, and flatter structures.
Work-life balance is highly valued, with cultural emphasis on family time, holidays, and flexible working arrangements. The pandemic accelerated Spain’s adoption of remote and hybrid work, particularly in IT, consulting, and digital services.
Spain’s workforce is a mix of well-educated local professionals and expatriates drawn to its global hubs. Barcelona has become a magnet for international talent in tech, biotech, and creative industries, while Madrid remains the financial and consulting powerhouse. Valencia and Bilbao also contribute specialized talent in engineering, logistics, and renewable energy.
For white-collar hiring, Spain offers deep expertise in STEM, finance, life sciences, and international business. Employers should also note that many roles are covered by collective bargaining agreements (CBAs), which define pay scales, working hours, and benefits at sector or regional levels.
Data Snapshot: Spain’s Talent Pool
Looking to build teams in Spain? Hire employees in Spain with Gloroots for fast, compliant access to the country’s diverse talent pool.
Q: What is the process of setting up an entity in Spain?
Setting up a legal entity in Spain requires navigating multiple registrations, government approvals, and compliance obligations. The most common structure for foreign companies is a Sociedad Limitada (SL), equivalent to a Private Limited Company. Incorporation involves steps with the Mercantile Registry, Tax Agency (Agencia Tributaria), and Social Security Authority, as well as obtaining a corporate bank account.
The process typically takes 2–3 months, depending on documentation and administrative efficiency. Employers must also register as an employer with the General Treasury of Social Security to make mandatory contributions. Furthermore, Spain’s strong reliance on collective bargaining agreements (CBAs) means employers must comply with sector- or region-specific labor rules from the outset.
For companies looking to hire quickly, entity setup can be costly and time-consuming. By contrast, Gloroots as an Employer of Record (EOR) enables you to hire employees in Spain in just weeks, while we manage payroll, contracts, and compliance.
Step-by-Step Process of Entity Setup in Spain
- Obtain a Foreigner’s Identification Number (NIE)
- Required for all foreign directors or shareholders.
- Reserve a Company Name
- Apply to the Mercantile Registry for name approval.
- Open a Corporate Bank Account
- Deposit the required minimum share capital (usually €3,000 for SL).
- Draft Articles of Association
- Outline governance, shareholder rights, and business scope.
- Public Deed of Incorporation
- Sign before a Spanish notary.
- Register with the Mercantile Registry
- Official incorporation approval.
- Obtain a Tax Identification Number (CIF/NIF)
- Register with the Spanish Tax Agency (Agencia Tributaria).
- Register for Social Security
- Employer must register with the General Treasury of Social Security to make contributions.
- Employment Compliance
- Draft compliant contracts in Spanish.
- Apply collective bargaining agreements (CBAs).
- Register employees with Social Security.
Q: What are the main benefits of using Gloroots as an Employer of Record in Spain vs setting up your own entity?
Setting up a local entity in Spain requires company incorporation, employer registrations with tax and social security authorities, and compliance with collective bargaining agreements (CBAs). Employers must also manage ongoing obligations such as payroll, social security contributions, and termination rules. While this route gives full independence, it demands significant time, cost, and ongoing legal oversight — especially if you plan to hire only a small team.
By contrast, Gloroots as an Employer of Record (EOR) allows you to hire employees in Spain quickly without setting up a legal entity. Gloroots becomes the legal employer, managing contracts, payroll, CBAs, social contributions, and statutory benefits, while you retain control over day-to-day employee responsibilities.
This solution ensures speed, cost savings, and compliance with Spain’s employee-protective labor laws, making it ideal for companies testing the market or scaling teams flexibly.
Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s employment framework is heavily regulated and employee-protective, with strong collective bargaining obligations and strict compliance requirements. Direct entity setup adds delays and costs, particularly for smaller teams.
With Gloroots as your EOR in Spain, you can:
- Hire employees in weeks, not months.
- Avoid entity setup costs and administrative burdens.
- Stay compliant with Spanish labor law and CBAs.
Gloroots makes expansion into Spain fast, compliant, and risk-free.
Q: What are the key employment laws in Spain that employers should know?
Spain has some of the most employee-protective labor laws in Europe, governed by the Workers’ Statute (Estatuto de los Trabajadores) and collective bargaining agreements (CBAs). Employers must issue written contracts, respect working hours, pay overtime correctly, and provide statutory leave entitlements.
Employment conditions such as minimum wage, working hours, annual leave, and overtime pay are regulated at the national level, while CBAs often add stricter or more generous provisions. Employers that fail to comply risk fines, employee claims, and reputational damage.
With Gloroots as your EOR in Spain, you avoid these risks. Gloroots issues compliant contracts in Spanish, applies relevant CBAs, and ensures payroll and benefits meet all statutory and collective requirements.
Key Employment Law Provisions in Spain
- Employment Contracts
- Must be in writing and in Spanish.
- Can be indefinite, fixed-term, or temporary (strict conditions apply).
- CBAs often regulate contract types and probation periods.
- Working Hours
- Standard: 40 hours per week, with a daily cap of 9 hours (unless CBA allows more with breaks).
- Minimum 12 hours rest between workdays.
- Overtime
- Maximum 80 hours per year, unless compensated with time off.
- Overtime pay rates are set by CBAs.
- Minimum Wage (SMI 2023)
- €1,080 per month (14 payments per year) = €15,120 annually.
- Many CBAs set higher wage floors by sector.
- Maternity & Paternity Leave
- Both parents entitled to 16 weeks of fully paid leave.
- 6 weeks must be taken immediately after childbirth.
- Annual Leave
- Minimum 30 calendar days (22 working days) paid leave per year.
- Sick Leave
- Paid through social security after the 4th day of illness.
- Employer covers days 1–3 (if required by CBA).
- Probation Period
- Typically 6 months for qualified workers, 2 months for others.
- CBAs may reduce these limits.
Employment Law Compliance: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s labor system places employee rights at the center, with CBAs adding extra complexity for employers. Missteps in contracts, overtime, or leave can trigger disputes and penalties.
With Gloroots as your EOR in Spain, you can:
- Guarantee contracts and benefits comply with Spanish law and CBAs.
- Ensure accurate payroll for overtime, leave, and social contributions.
- Avoid disputes and penalties with fully compliant HR processes.
Gloroots makes employment law compliance in Spain seamless and low-risk.
Q: What are the types of work visas in Spain, and how can Gloroots help with immigration?
Spain is a leading destination for global professionals, particularly in technology, life sciences, finance, and academia. However, non-EU nationals require a valid work visa and residence permit to work legally in Spain. EU/EEA and Swiss citizens can work freely without a visa, but employers hiring global talent must navigate Spain’s immigration system, which involves applications through Spanish consulates abroad and approvals from the Spanish Ministry of Labor and Immigration.
The process is compliance-heavy, requiring proof of employment contracts, company registration in Spain, and adherence to labor market tests in some cases. Mistakes in sponsorship or delays in applications can lead to visa denials or penalties for both employer and employee.
With Gloroots as your Employer of Record (EOR), immigration is simplified. Gloroots sponsors eligible employees under compliant work permits, manages residence registrations, and ensures that foreign workers remain legally employed in Spain while staying aligned with labor laws and collective bargaining agreements (CBAs).
Common Work Visa Types in Spain
- Work Permit for Highly Qualified Professionals (HQP)
- For managers, executives, and skilled professionals in specialized sectors.
- Streamlined process for roles requiring advanced expertise.
- EU Blue Card
- For highly qualified non-EU nationals with higher education and a binding job offer.
- Provides mobility across EU member states.
- General Work Permit (Cuenta Ajena)
- For standard employment contracts.
- Requires labor market test to ensure no EU candidate is available.
- Intra-Company Transfer (ICT) Visa
- For employees transferring from a multinational company’s foreign branch to its Spanish subsidiary.
- Entrepreneur & Startup Visa
- For entrepreneurs establishing innovative businesses in Spain.
- Seasonal Work Permits
- For temporary or seasonal employment (common in agriculture, hospitality).
How Gloroots Supports Immigration
- Visa Sponsorship: Acts as the legal employer, enabling work permit sponsorship.
- Immigration Compliance: Ensures applications meet Spanish labor ministry and consular requirements.
- Residence Permits: Supports foreign employees in registering for residence cards (NIE/TIE).
- Renewals & Extensions: Tracks visa expiration dates and manages renewals.
- Integration with EOR: Combines immigration support with payroll, CBAs, and HR compliance.
Why This Matters
Spain’s immigration process can be bureaucratic and time-sensitive, with multiple approvals required before employees can legally work. For non-EU nationals, direct sponsorship requires a Spanish entity, which delays hiring.
With Gloroots as your EOR in Spain, you can:
- Sponsor and onboard global talent compliantly.
- Ensure timely visa applications and renewals.
- Combine immigration with payroll, CBAs, and HR compliance for seamless workforce management.
Gloroots makes immigration to Spain faster, compliant, and employee-friendly.
Q: What are the risks of misclassification in Spain?
Spain strictly regulates the distinction between employees and independent contractors. Misclassification — treating an employee as a contractor to avoid paying social security, taxes, or benefits — is a major compliance risk. Spanish courts and the Labor Inspectorate (Inspección de Trabajo) look beyond contracts to assess the real nature of the working relationship.
If a contractor works under the same conditions as an employee (set hours, company tools, ongoing tasks, subordination), they may be reclassified as an employee. This exposes companies to back payments of social security contributions, fines, unpaid benefits, and even criminal charges in cases of fraud.
With Gloroots as your Employer of Record (EOR), you eliminate this risk. Gloroots ensures workers are classified correctly, issues compliant contracts, and manages payroll and social contributions in line with Spanish law.
Criteria That Lead to Misclassification in Spain
A contractor is likely to be considered an employee if they:
- Work under the company’s supervision and control.
- Follow a fixed schedule set by the company.
- Use company-provided equipment, systems, or premises.
- Provide services exclusively to one client.
- Are integrated into the company’s core business activities.
- Receive a fixed monthly payment instead of project-based compensation.
Penalties for Misclassification in Spain
- Back Payment of Social Security Contributions (including employer and employee shares).
- Fines ranging from €3,000 to €10,000+ per worker.
- Payment of Benefits & Leave (holiday pay, severance, overtime).
- Criminal Liability in severe fraud cases.
- Reputational Damage that can affect government relations and CBAs.
Misclassification Risk: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain enforces strict worker classification rules to protect employees. Misclassification exposes employers to heavy financial and legal liabilities.
With Gloroots as your EOR in Spain, you can:
- Avoid misclassification risks entirely.
- Guarantee correct social security and benefit compliance.
- Protect your business from fines, disputes, and reputational damage.
Gloroots makes hiring in Spain safe, compliant, and risk-free.
Q: How does an EOR help you run payroll in Spain?
Payroll in Spain is governed by national labor law, collective bargaining agreements (CBAs), and social security regulations. Employers must calculate gross salaries, apply deductions for income tax (IRPF), social security contributions, and employee benefits, and issue payslips in Spanish. Salaries are typically paid monthly in 12 or 14 installments, depending on CBAs, with extra payments often due in July and December.
Employers are also required to make employer social security contributions, which cover pensions, unemployment insurance, healthcare, and occupational risk funds. Payroll compliance also includes filing reports with the General Treasury of Social Security and the Spanish Tax Agency (Agencia Tributaria) on a monthly basis.
Failure to comply with payroll rules, CBAs, or reporting deadlines can result in penalties, employee claims, or blocked operations. With Gloroots as your Employer of Record (EOR), payroll is managed end-to-end: from calculating wages and deductions to filing social contributions and ensuring compliance with CBAs.
Key Payroll Compliance Requirements in Spain
- Payroll Cycle: Monthly (12 or 14 payments depending on CBAs).
- Currency Requirement: All salaries must be paid in euros (EUR).
- Payslips: Must include gross salary, deductions, and employer contributions.
- Tax Withholding (IRPF):
- Progressive income tax deducted at source.
- Employer responsible for remitting to Agencia Tributaria.
- Social Security Contributions:
- Employer: ~30% of gross salary.
- Employee: ~6.35% of gross salary.
- Includes pensions, unemployment, healthcare, training, and accident insurance.
- CBAs Impact: CBAs may set additional salary components, overtime pay, and extra allowances.
- Reporting: Monthly filings with Social Security and Agencia Tributaria.
Payroll Management: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Payroll in Spain is complex due to high employer contributions and CBA rules. Mistakes in calculations or late filings can result in fines, employee claims, or reputational risks.
With Gloroots as your EOR in Spain, you can:
- Guarantee accurate tax and social security contributions.
- Ensure salaries comply with CBAs and statutory laws.
- Eliminate payroll compliance risks while focusing on growth.
Gloroots makes payroll in Spain accurate, compliant, and stress-free.
Q: How does tax compliance work in Spain?
Tax compliance in Spain is multi-layered, involving income tax (IRPF), corporate tax, and social security contributions. Employers are legally required to withhold personal income tax from employees’ salaries and remit it monthly to the Spanish Tax Agency (Agencia Tributaria). They must also make significant employer social security contributions to the General Treasury of Social Security, covering pensions, unemployment, training, and healthcare.
Tax rules in Spain are progressive and complex, with different rates across regions (especially in Catalonia, Madrid, and the Basque Country). Mistakes in withholding or late filings can lead to penalties, interest charges, and disputes with employees.
With Gloroots as your Employer of Record (EOR), all tax withholdings, filings, and contributions are handled accurately and on time, ensuring compliance across Spain’s evolving tax landscape.
Spain Income Tax Brackets (IRPF, 2023)
Note: Regions may apply surcharges, so effective tax rates vary.
Social Security Contributions (Approximate)
- Employer: ~30% of gross salary.
- Pensions: ~23.6%
- Unemployment: ~5.5%
- Training & risk insurance: ~1%
- Employee: ~6.35% of gross salary.
- Deducted at source by employer.
Corporate Tax (Direct Entities Only)
- Standard corporate tax: 25% of profits.
- Reduced rates for new companies (15% for first 2 years).
- Additional regional taxes may apply.
Tax Compliance: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s tax system is progressive, region-specific, and compliance-heavy. Employers must navigate both national and regional rules for income tax and social security.
With Gloroots as your EOR in Spain, you can:
- Guarantee correct IRPF withholdings and filings.
- Ensure accurate employer/employee social security contributions.
- Avoid corporate tax registration and reporting obligations.
Gloroots makes tax compliance in Spain transparent, compliant, and stress-free.
Q: What benefits and entitlements do employees in Spain receive?
Spain provides employees with generous statutory benefits, among the strongest in Europe. These include paid annual leave, sick leave, maternity and paternity leave, and public healthcare coverage. Employers are also required to contribute to social security, which funds pensions, unemployment, healthcare, and other social protections.
Many employment terms, including salaries, bonuses, and leave arrangements, are regulated by collective bargaining agreements (CBAs), which often set higher standards than statutory minimums. In addition, employers competing for top talent often provide supplemental benefits, such as private health insurance, meal vouchers, childcare allowances, and flexible working arrangements.
With Gloroots as your Employer of Record (EOR), you can ensure that your employees in Spain receive all statutory entitlements plus competitive supplemental benefits, while staying compliant with CBAs.
Statutory Benefits in Spain
- Annual Leave
- Minimum 30 calendar days (22 working days) per year.
- CBAs may grant additional days.
- Public Holidays
- 14 days annually (including national, regional, and local holidays).
- Sick Leave
- Paid through social security after day 4.
- Employer may cover days 1–3 if required by CBA.
- Maternity & Paternity Leave
- Both parents entitled to 16 weeks of fully paid leave.
- Leave can be extended for multiple births or adoption.
- Public Healthcare
- Universal healthcare funded by social security contributions.
- Pension & Unemployment Insurance
- Covered through employer and employee social security contributions.
Supplemental Benefits (Market Practice)
- Private health insurance (common for multinationals).
- Meal vouchers or stipends.
- Transport allowances.
- Childcare and family support benefits.
- Flexible working and hybrid arrangements.
Benefits & Entitlements: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s benefits system is statutory-heavy and CBA-driven, requiring employers to go beyond minimum entitlements. To remain competitive, supplemental benefits are also essential.
With Gloroots as your EOR in Spain, you can:
- Guarantee compliance with statutory benefits and CBAs.
- Offer competitive supplemental perks to attract talent.
- Streamline administration of payroll and benefits.
Gloroots ensures your employees in Spain receive fair, compliant, and attractive benefit packages.
Q: What’s involved in hiring and onboarding employees in Spain?
Hiring in Spain is governed by the Workers’ Statute (Estatuto de los Trabajadores) and collective bargaining agreements (CBAs), which regulate many aspects of employment, including salaries, probation periods, working hours, and termination conditions. All employment contracts must be issued in Spanish and in writing, specifying salary, working conditions, and probation terms.
Probationary periods are allowed but capped: 6 months for qualified professionals and 2 months for other employees, unless CBAs impose stricter limits. Employers must also register all new employees with the Spanish Social Security system before their first working day and ensure tax withholdings are set up with the Agencia Tributaria (Tax Agency).
Onboarding typically includes verifying employee identity and work authorization, enrolling employees in payroll and benefits, and providing orientation on company policies and workplace safety. For expatriates, visa sponsorship and NIE (foreigner identification number) registration may also be required.
With Gloroots as your Employer of Record (EOR), you can onboard employees in Spain quickly and compliantly. Gloroots manages contracts, applies relevant CBAs, registers employees with social security, and ensures payroll and benefits setup.
Hiring & Onboarding Steps in Spain
- Employment Contracts
- Written in Spanish; must include job role, salary, working hours, probation, and benefits.
- CBAs may add mandatory clauses.
- Probation Periods
- Maximum 6 months for skilled roles.
- Maximum 2 months for other employees.
- CBAs may impose shorter periods.
- Employee Documentation
- National ID (for Spanish citizens).
- NIE (Foreigner Identification Number) for expatriates.
- Work permits/visas if applicable.
- Social Security Registration
- Employer must register employees before day one.
- Ensures eligibility for healthcare, pensions, and unemployment insurance.
- Tax Setup
- Register employees with Agencia Tributaria for IRPF withholding.
- Onboarding Orientation
- Company policies, workplace safety, and CBA entitlements.
- Equipment and IT setup.
Hiring & Onboarding: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s hiring process is CBA-driven and compliance-heavy, requiring employers to issue proper contracts, register employees before day one, and apply strict probation rules. Errors in compliance can result in fines or disputes.
With Gloroots as your EOR in Spain, you can:
- Hire employees in weeks with fully compliant contracts.
- Ensure correct registration with social security and tax authorities.
- Deliver a professional, seamless onboarding experience.
Gloroots makes hiring in Spain fast, compliant, and employee-friendly.
Q: How do you successfully manage a workforce in Spain?
Managing a workforce in Spain requires balancing strict labor compliance with building a culture that motivates and retains employees. Spain’s labor laws and collective bargaining agreements (CBAs) define many aspects of employment, from salary structures and overtime pay to leave entitlements and termination. Employers must closely follow these agreements to avoid disputes.
Culturally, Spanish workplaces value collaboration, interpersonal relationships, and work-life balance. Flexible schedules and hybrid work arrangements are increasingly common, especially in knowledge industries such as IT, consulting, and finance. At the same time, employees expect transparency in pay and career progression, with strong interest in training and professional development.
Retention strategies in Spain often combine statutory entitlements with supplemental perks, such as private healthcare, meal vouchers, or flexible work models. For expatriates, support with relocation and integration is important to boost long-term retention.
With Gloroots as your Employer of Record (EOR), you can ensure compliance with Spanish labor law and CBAs while creating attractive compensation and retention strategies tailored to the Spanish workforce.
Best Practices for Managing a Workforce in Spain
- Ensure Compliance with CBAs
- Review sector-specific CBAs for salary scales, working hours, and benefits.
- Apply updates promptly to avoid disputes.
- Support Work-Life Balance
- Flexible schedules and hybrid work are valued.
- Encourage employees to take full annual leave.
- Offer Competitive Benefits
- Beyond statutory entitlements, offer supplemental perks such as health insurance, meal vouchers, and flexible work arrangements.
- Invest in Professional Development
- Provide training and career progression opportunities.
- Encourage language learning for international operations.
- Foster Inclusive Culture
- Respect Spain’s regional diversity (Catalonia, Basque Country, Galicia).
- Emphasize equal opportunities and non-discrimination.
Workforce Management: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s workforce is highly skilled, culturally diverse, and strongly protected by labor law and CBAs. Non-compliance risks disputes, while weak retention practices may increase turnover costs.
With Gloroots as your EOR in Spain, you can:
- Stay fully compliant with CBAs and labor laws.
- Provide competitive, attractive benefits and perks.
- Focus on employee engagement and retention while Gloroots manages compliance.
Gloroots makes workforce management in Spain compliant, culturally aligned, and retention-focused.
Q: What are the key steps and requirements in terminating employees in Spain?
Termination in Spain is strictly regulated by the Workers’ Statute and collective bargaining agreements (CBAs), making it one of the more complex areas of Spanish employment law. Employers must follow lawful grounds for termination — such as redundancy, poor performance, misconduct, or mutual agreement — and ensure correct notice periods, severance pay, and documentation.
Probationary employees may be dismissed with less formality, provided the dismissal respects contract terms and anti-discrimination laws. For regular employees, termination often requires just cause and, in redundancy cases, advance notice to employees and authorities. Severance pay is mandatory for most dismissals except in cases of proven misconduct.
Failure to comply exposes employers to unfair dismissal claims, with courts often awarding reinstatement or higher severance payments. With Gloroots as your Employer of Record (EOR), you can terminate employees in Spain smoothly and lawfully, with all severance and notice obligations met.
Key Termination Rules in Spain
- Notice Periods
- Standard: 15 days’ notice for most employees.
- CBAs may extend notice requirements.
- Probationary Termination
- Allowed without severance, provided within the probationary period (max 6 months for skilled roles, 2 months for others).
- Severance Pay
- Objective dismissal (economic/organizational reasons): 20 days’ salary per year of service (capped at 12 months).
- Unfair dismissal: 33 days’ salary per year of service (capped at 24 months).
- Misconduct dismissal: No severance, but employer must prove just cause.
- Final Settlement
- Must include all outstanding wages, unused vacation, overtime, and prorated extra salary payments (if 14-pay system applies).
- Unfair Dismissal Protections
- Courts can reinstate employees or increase severance if dismissal is deemed unjustified.
Termination: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s termination process is employee-protective and litigation-prone, making compliance essential. Missteps in notice, severance, or documentation often lead to unfair dismissal claims.
With Gloroots as your EOR in Spain, you can:
- Terminate employees lawfully and fairly.
- Guarantee accurate notice and severance pay.
- Avoid costly disputes and legal risks.
Gloroots ensures employee exits in Spain are compliant, fair, and low-risk.
Q: What is the offboarding process in Spain?
Offboarding in Spain is a formal, compliance-heavy process governed by the Workers’ Statute and collective bargaining agreements (CBAs). Employers must ensure that employees receive their final settlement (finiquito), which includes unpaid wages, accrued vacation, prorated extra payments (if 14-pay structure), and severance where applicable.
Employers must also deregister employees from the Spanish Social Security system and update tax records with the Agencia Tributaria (Tax Agency). CBAs may impose additional requirements, such as providing termination certificates or settlement breakdowns.
Non-compliance in offboarding — such as late severance or incorrect deregistration — can result in legal claims, fines, or unfair dismissal rulings. With Gloroots as your Employer of Record (EOR), offboarding is handled end-to-end, ensuring all statutory and CBA requirements are met.
Key Phases of the Offboarding Process in Spain
- Notice & Termination Compliance
- Confirm termination grounds (resignation, dismissal, redundancy, retirement).
- Apply correct statutory or CBA notice period.
- Final Settlement (Finiquito)
- Pay outstanding wages, unused vacation, overtime, prorated extra salary payments, and severance (if applicable).
- Provide written settlement breakdown to the employee.
- Social Security Deregistration
- Employer must deregister the employee from the social security system (Sistema RED).
- Tax Reporting
- Update Agencia Tributaria records.
- Ensure correct IRPF withholdings on final settlement.
- Benefits & Insurance
- End private health insurance or other supplemental benefits.
- Provide pension documentation where applicable.
- Exit Clearance
- Return company assets (laptops, phones, ID cards).
- Revoke access to systems and accounts.
- Employee Documentation
- Provide employment certificate or reference letter (if requested).
Offboarding: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s offboarding process is employee-protective and documentation-heavy, requiring strict compliance with notice, severance, and reporting rules. Errors or delays can lead to claims of wrongful dismissal or fines.
With Gloroots as your EOR in Spain, you can:
- Guarantee correct and timely final settlements.
- Ensure compliant deregistration from social security and tax systems.
- Provide employees with a professional, dispute-free exit.
Gloroots makes offboarding in Spain smooth, compliant, and low-risk.
Q: What costs and financial planning do you need with an Employer of Record in Spain?
Hiring in Spain comes with significant employer costs beyond gross salaries. Employers must budget for social security contributions (~30% of salary), payroll taxes, and benefits administration. Many employment terms are further defined by collective bargaining agreements (CBAs), which may establish higher minimum salaries, extra pay periods, or sector-specific allowances.
Employers must also plan for redundancy liabilities, as Spanish law mandates severance pay for most dismissals. Combined with high social contributions, this creates a long-term financial obligation for companies hiring in Spain.
Direct entity setup in Spain adds further costs, including incorporation fees, minimum share capital deposits, legal translations, payroll software, and ongoing accounting services. By contrast, with Gloroots as your Employer of Record (EOR), you avoid these upfront costs and instead pay a predictable monthly fee per employee, covering payroll, contributions, and compliance.
Key Cost Considerations in Spain
- Entity Setup & Maintenance
- Minimum share capital: €3,000 (for Sociedad Limitada).
- Notary, legal, and translation fees.
- Ongoing accounting and tax filings.
- Employer Contributions
- ~30% of gross salary for social security.
- Covers pensions, unemployment, healthcare, and training funds.
- Employee Contributions
- ~6.35% of gross salary, withheld by employer.
- CBAs & Payroll
- CBAs may require 14 salary payments (with July and December bonuses).
- Additional allowances (e.g., transport, meals).
- Redundancy Liabilities
- Severance typically 20–33 days per year of service, depending on reason for termination.
- EOR Fees
- Predictable monthly fee per employee.
- Covers payroll, benefits, compliance, and social contributions.
Costs: Direct Entity vs Gloroots EOR (Spain)
Why This Matters
Spain’s labor system creates high employer costs and long-term obligations, especially with social contributions and severance pay. Direct entity setup adds to these burdens, making it less efficient for companies testing the market or hiring small teams.
With Gloroots as your EOR in Spain, you can:
- Avoid high upfront setup costs.
- Accurately budget with predictable monthly fees.
- Ensure compliance with payroll, CBAs, and redundancy obligations.
Gloroots makes financial planning in Spain transparent, compliant, and scalable.
Q: What challenges might you face, and how do you solve them using an EOR in Spain?
Spain offers a skilled workforce and strategic EU access, but its employment framework is complex and employee-protective. Employers must navigate high social security contributions (~30%), collective bargaining agreements (CBAs), strict termination rules, and multi-layered payroll compliance.
CBAs create additional complexity by setting sector- or region-specific rules on wages, overtime, bonuses, and leave, which employers must monitor and apply. Payroll is further complicated by 14 salary payments (12 monthly + 2 extra in July and December), mandatory severance obligations, and progressive regional tax rates.
Entity setup takes months and involves minimum share capital, notary approvals, and multiple government registrations. These hurdles can delay hiring and increase compliance risks.
With Gloroots as your Employer of Record (EOR), companies bypass these challenges. Gloroots provides a ready-to-use local entity, handling contracts, payroll, CBAs, benefits, and compliance, so you can hire in weeks instead of months.
Common Challenges & EOR Solutions in Spain
Why This Matters
Spain’s employment framework is bureaucratic, compliance-heavy, and employee-centered. Missteps in CBAs, payroll, or termination can quickly escalate into disputes or fines.
With Gloroots as your EOR in Spain, you can:
- Hire in weeks without entity setup delays.
- Stay compliant with CBAs, payroll, and tax rules.
- Reduce employer costs and compliance risks.
Gloroots makes hiring in Spain fast, compliant, and risk-free.
Conclusion
Spain is a strategic gateway to the European market, offering access to a highly educated workforce, strong STEM talent, and sector expertise across technology, finance, life sciences, automotive, and renewable energy. Business hubs such as Madrid and Barcelona attract both local and international professionals, while Valencia and Bilbao strengthen Spain’s industrial and energy sectors.
At the same time, employers must navigate high social contributions, collective bargaining agreements (CBAs), strict termination rules, and multi-layered payroll compliance. Entity setup is resource-intensive, requiring notary approvals, capital deposits, and registrations across tax and social security systems.
With Gloroots as your Employer of Record (EOR) in Spain, you can hire employees in Spain in weeks instead of months. Gloroots handles payroll compliance, employee benefits, and global compliance, so you can scale quickly while minimizing risk.
Gloroots makes expansion into Spain compliant, cost-efficient, and scalable.
Frequently asked questions
