Employer of Record in Spain

An Employer of Record in Spain acts as the legal employer on your behalf, managing payroll, contracts, and compliance so you can hire without a local entity.

Spain's Workers' Statute and collective bargaining agreements (CBAs) create layered obligations across contracts, working hours, and termination. Hiring without local expertise exposes companies to significant legal and financial risk.

• EOR hiring typically takes 2 to 4 weeks; setting up a Sociedad Limitada takes 2 to 3 months.
• Employer social security contributions run approximately 30.98% of gross salary.
• The standard statutory notice period is 15 days for employees with under one year of service.
• Spain's SMI (minimum wage) is €1,134 per month in 2024, paid over 14 instalments annually.

This page covers Spain's legal employment framework, payroll obligations, visa options, termination rules, EOR costs, and how to select the right provider for your situation.

Gloroots is an EOR provider operating in Spain. This guide is written to help you understand all available hiring paths, not only to promote Gloroots as a solution.

What Is an Employer of Record in Spain?

An EOR becomes the registered employer under Spanish law, taking on responsibility for employment contracts, payroll processing, social security filings, and statutory compliance on behalf of the client company.

Foreign companies hiring Spanish talent without a local entity are the primary users of this model.

In practice, the client selects the candidate and defines the role. The EOR then issues a compliant Spanish employment contract, registers the employee with Social Security before their first day, runs monthly payroll with the correct IRPF (income tax) withholding, administers CBA-mandated benefits, and manages offboarding when the employment ends. To understand the full model, see how does EOR work.

Clear global hiring pricing

See country-specific EOR pricing before you plan your next international hire.

Check our pricing

Your Hiring Options in Spain: EOR vs. Entity vs. PEO vs. Contractor

Companies hiring in Spain can choose from four paths: an EOR, a wholly-owned Sociedad Limitada (SL), a Professional Employer Organization (PEO), or an independent contractor arrangement. Each path carries different compliance ownership, setup timelines, and cost structures.

An EOR fits companies testing the Spanish market, hiring a small team, or needing to place employees quickly without entity overhead. For EOR services that cover Spain, Gloroots operates through a wholly-owned local entity.

Entity setup makes sense for long-term, large-scale operations where full operational independence justifies the incorporation cost and ongoing administrative burden.

Later sections on payroll, termination, and costs refer back to this table rather than repeating the comparison.

How to Hire in Spain Through an EOR: Step by Step

Hiring through an EOR in Spain follows six practical steps, from the initial hiring decision through to the first payroll run.

Step 1: Decide Whether an EOR or Own Entity Is Right for Your Spain Hire

Assess your team size, market-entry timeline, and long-term Spain strategy. Use the hiring-options comparison table in the section above to match your situation to the right path.

Step 2: Select and Vet Your EOR Provider

Confirm the EOR operates through a wholly-owned Spanish entity rather than a third-party partner. Verify CBA expertise for your sector and review data processing agreements for GDPR compliance.

Step 3: Issue a Compliant Spanish Employment Contract

The EOR generates a written contract in Spanish covering the role, salary, working hours, probation period, applicable CBA, and termination conditions.

Step 4: Register the Employee with Spanish Social Security

The EOR registers the employee with the Tesorería General de la Seguridad Social via the Sistema RED platform before the employee's first working day.

Step 5: Run Compliant Monthly Payroll

The EOR calculates gross-to-net salary, applies IRPF withholding, remits employer contributions (~30.98%) and employee contributions (~6.35%) to Social Security, and issues a Spanish-language payslip.

Step 6: Manage Offboarding and Exit Compliantly

The EOR issues the finiquito (final settlement), deregisters the employee from Social Security via Sistema RED, and closes IRPF records with the Agencia Tributaria.

Start hiring with Gloroots

Set up compliant employment in your target country without building a local entity first.

Sign up for Gloroots

How to Choose the Right EOR in Spain

Choosing an EOR in Spain requires evaluating six factors before signing a contract. The right provider must demonstrate local legal knowledge, not just general EU employment familiarity.

Spain's labor framework includes sector-specific collective bargaining agreements, strict termination rules, and monthly Social Security filing obligations. A provider that cannot show direct experience with these requirements creates compliance risk from day one.

When assessing providers, review their track record in Spain specifically. Ask how they handle CBA identification, IRPF withholding, and employee deregistration at offboarding. Pricing transparency and dedicated account ownership also matter. For a broader comparison of providers, see the best employer of record guide.

Local Legal Knowledge and CBA Expertise

Verify the EOR has demonstrated expertise in Spain's sector-specific CBAs and the Workers' Statute, not just generic EU employment law.

Own Entity vs. Partner Network

Confirm whether the EOR employs workers through a wholly-owned Spanish Sociedad Limitada or routes employment through a third-party partner, which increases cesión ilegal risk.

Support Model and Response Times

Assess whether the EOR assigns a dedicated account manager or routes requests through a shared queue, and confirm whether Spanish-language HR support is available for employees.

Pricing Transparency

Request a per-employee monthly fee, confirm what is included (payroll, benefits, compliance), and check for hidden costs such as termination fees or currency conversion charges. Review pricing before committing.

Data Security and GDPR Compliance

Confirm the EOR signs a Data Processing Agreement (DPA), complies with Spain's LOPDGDD (Organic Law 3/2018), and has appointed a Data Protection Officer where required.

Platform Integration Capability

Verify the EOR's platform integrates with your HRIS, expense management, and equity administration tools, and supports Spanish-language payslip generation.

Workforce and Talent Pool in Spain

Spain has approximately 23 million active workers, with a median age of around 43. The workforce is aging, but universities such as Complutense Madrid and the University of Barcelona produce a strong pipeline of STEM graduates.

Madrid leads in finance and consulting. Barcelona dominates tech and life sciences, drawing both local professionals and international talent.

Spanish workplaces value collaboration and work-life balance. English proficiency is rising in tech and finance sectors. Labor costs are competitive within Western Europe, though employer social security contributions add approximately 30.98% on top of gross salary, making total employment cost a key planning factor.

Employment Law Essentials in Spain

Spain's employment framework is governed by the Workers' Statute (Estatuto de los Trabajadores) and a dense network of collective bargaining agreements (CBAs). Employers must comply with statutory rules on contracts, working hours, wages, and leave. CBAs often set stricter or more generous conditions than national law, and compliance with both layers is mandatory. For a comparable European framework, see employer of record Germany.

Employment Contracts

The Workers' Statute requires all employment contracts to be issued in writing and in Spanish. Contracts may be indefinite, fixed-term, or temporary, though the 2022 labour reform (Royal Decree-Law 32/2021) significantly restricted fixed-term and temporary contracts, making open-ended contracts the default. CBAs regulate probation periods and permissible contract types by sector. Gloroots issues fully compliant Spanish employment contracts that reflect current statutory requirements and applicable CBA terms.

Working Hours and Overtime

The Workers' Statute caps ordinary working time at 40 hours per week, with a daily maximum of 9 hours. A mandatory 12-hour rest period between workdays applies to all employees. Gloroots ensures all employment arrangements respect these statutory limits.

Minimum Wage

Spain's statutory minimum wage (SMI) is €1,134 per month in 2024, paid over 14 instalments, totalling €15,876 per year. Many CBAs set higher sector-specific wage floors that employers must also meet. Gloroots ensures all salaries meet or exceed the current SMI and applicable CBA wage floors.

Leave and Statutory Benefits in Spain

Spain's Workers' Statute sets minimum entitlements for annual leave, public holidays, maternity and paternity leave, and bereavement leave. CBAs frequently extend these entitlements. Employers must also comply with remote work obligations introduced under Royal Decree-Law 28/2020.

Public holidays total 14 days per year: 10 national holidays, 2 set by each autonomous community, and 2 set by the local municipality. Employees are entitled to all 14 days as paid leave.

Bereavement leave under the Workers' Statute is 2 days for the death of a close family member, extendable to 4 days when travel is required.

Royal Decree-Law 28/2020 requires a written remote work agreement for employees working remotely on a regular basis. Employers must cover the employee's internet and electricity costs attributable to remote work.

Annual Leave

The Workers' Statute grants employees 23 working days of annual leave, equivalent to 30 calendar days. CBAs may grant additional days above this statutory floor. Gloroots ensures all employment contracts reflect the correct statutory and CBA-mandated leave entitlements.

Sick Leave

Social security pays 60% of the regulatory base from days 4 to 20, rising to 75% from day 21 onward. Gloroots manages sick leave filings and payroll adjustments in full compliance with Spanish law.

Maternity and Paternity Leave

Since 2021, paternity leave equals maternity leave at 16 weeks, a significant legislative change. Both entitlements extend for multiple births or adoption. Gloroots ensures leave entitlements are correctly applied and payroll is adjusted accordingly.

Public Holidays

Spain observes 14 public holidays annually: 10 national, 2 regional (varying by autonomous community), and 2 local or municipal holidays.

Payroll, Tax and Statutory Contributions in Spain

Payroll in Spain runs monthly. Employers must withhold IRPF (personal income tax), remit social security contributions, and issue payslips in Spanish.

Spain's 14-payment salary structure (12 monthly payments plus July and December bonuses) is governed by collective bargaining agreements. Payroll must reflect this structure correctly, as errors expose employers to employee claims and regulatory penalties.

Employers must also account for the remote work allowance under Royal Decree-Law 28/2020, which requires a separate payroll line item for employees working from home. The employer social security contribution rate is approximately 30.98%.

Tax slabs (2024)

Employer and employee social security contributions

Gloroots manages IRPF withholding, social security remittance, the 14-payment payroll structure, and WFH allowance tracking, ensuring full compliance with Spanish payroll obligations.

Work Visas and Permits in Spain

Non-EU nationals require a work visa and residence permit to work in Spain. EU, EEA, and Swiss citizens may work freely without a permit.

An EOR can sponsor non-EU employees under compliant work permits, but the EOR must be the registered employer in Spain. This requirement makes own-entity EOR structures essential for lawful sponsorship.

Spain's Digital Nomad Visa, introduced under the Startup Law (Ley de Startups, 2023), allows remote workers and freelancers employed by foreign companies to live and work in Spain. Applicants must earn a minimum of 2,160 EUR per month. Applications are submitted through Spanish consulates abroad or the Large Business and Strategic Economic Sectors Unit (UGE-CE) within Spain.

Visa types

Gloroots acts as the registered employer in Spain, supporting work permit sponsorship and ensuring visa-related employment obligations are met.

Equity and ESOP Consulting in Spain

Equity compensation is increasingly common in Spain's tech and startup sectors, particularly in Madrid and Barcelona.

Spain's Startup Law (Law 28/2022, in force from 2023) introduced favourable tax treatment for stock options. Up to 50,000 EUR in stock options is exempt from income tax at the point of grant, with tax deferred to the point of sale. This reduces the immediate tax burden on employees and lowers administrative complexity for employers offering equity packages.

For companies hiring in Spain through Gloroots, equity plan structures can be aligned with local tax rules to ensure compliant grant documentation and correct payroll treatment at the time of exercise or sale.

Misclassification Risk in Spain

Spain's Workers' Statute presumes an employment relationship when indicators of subordination and dependency are present between a worker and a company.

A separate but related risk is cesión ilegal de trabajadores under Article 43 of the Workers' Statute. If a Spanish court determines that an EOR is acting as a labour-leasing intermediary rather than the genuine legal employer, both the EOR and the client company face joint liability for all employment obligations. This risk is distinct from contractor misclassification and applies even when workers hold formal employment contracts.

Key misclassification indicators Spanish courts examine:

• The company controls working hours, methods, and tools used by the worker on a daily basis.
• The worker performs tasks that form part of the company's core business activity.
• The worker is economically dependent on a single client for the majority of income.
• The relationship has continued for an extended period without a genuine commercial justification.

Penalties for misclassification or cesión ilegal:

• Back payment of all social security contributions, including employer and employee shares, plus interest.
• Fines from the Labour Inspectorate ranging from minor infractions to serious penalties under the LISOS framework.
• Automatic conversion of the contractor relationship to an indefinite employment contract by court order.
• Joint and several liability between the EOR and the client company for all outstanding employment obligations.

An EOR that is the genuine legal employer, not a labour-leasing intermediary, eliminates both contractor misclassification risk and cesión ilegal exposure.

Plan your hiring route

Talk through your country-specific employment requirements with the Gloroots team.

Book a demo

Hiring, Onboarding, Termination and Offboarding in Spain

Hiring in Spain requires written employment contracts in Spanish, registration with Social Security via Sistema RED, and application of the relevant collective bargaining agreement (CBA) from day one. Employers must also set up IRPF withholding with the Agencia Tributaria before the first payroll run.

The sections below cover each phase of the employment lifecycle: onboarding steps before and after the employee starts, the legal framework governing termination, and the offboarding obligations that apply when employment ends.

Onboarding

Before day one

• Collect NIE or TIE documentation for all non-EU nationals before the start date.
• Issue a written employment contract in Spanish that references the applicable CBA.
• Register the employee with Social Security via Sistema RED prior to the first working day.
• Set up IRPF withholding with the Agencia Tributaria to ensure correct tax deductions from payroll.

Day one

• Provide a written summary of CBA entitlements, including pay scale, leave, and working hours.
• Complete the mandatory workplace safety briefing required under Ley 31/1995 (Prevention of Occupational Risks).
• Issue equipment and grant system access in line with the agreed role and tools policy.

First week

• Confirm and sign a remote work agreement if applicable, as required by Royal Decree-Law 28/2020.
• Enroll the employee in any supplemental benefits, including private health insurance and meal vouchers.

Beyond

• Confirm probation period terms in writing, referencing the applicable CBA or statutory default.
• Schedule the first payroll run to execute within 30 days of the employment start date.

Termination

Notice periods in Spain are set by the applicable CBA or the Workers' Statute, with objective dismissal requiring 15 days written notice and disciplinary dismissal taking immediate effect. Collective redundancies affecting 10 or more employees within 30 days trigger the ERE (Expediente de Regulación de Empleo) process, which requires consultation with employee representatives and authority notification. Gloroots manages termination documentation, severance calculations, and Social Security deregistration to keep the process compliant.

Offboarding

Settlement

• Calculate the finiquito, covering outstanding wages, accrued but unused vacation days, prorated July and December bonuses, and any applicable severance.
• Confirm the payment timeline with the employee and process within the agreed period to avoid late payment claims.
• Apply the correct severance rate based on dismissal type: 20 days per year for objective dismissal, 33 days per year for unfair dismissal.

Documents

• Provide a written settlement breakdown (recibo de finiquito) signed by the employee as acknowledgment of final payment.
• Issue an employment certificate (certificado de empresa) if the employee requests it for unemployment benefit purposes.

Exit

• Deregister the employee from Social Security via Sistema RED on the last working day to stop contribution obligations.
• Update IRPF records with the Agencia Tributaria to reflect the end of the employment relationship.
• Close all supplemental benefits, including private health insurance and any occupational pension arrangements, on the termination date.

What's New: Recent Regulatory Changes in Spain

Spain's 2022 labour reform, enacted through Royal Decree-Law 32/2021 and effective 30 March 2022, made indefinite contracts the default employment form and restricted fixed-term contracts to genuine short-term operational needs.

Key changes employers must account for:

• Fixed-term contracts are now limited to six months (extendable to one year by CBA), replacing the previous two-year maximum for production-based contracts.
• Part-time contracts require written records of all hours worked, with stricter rules on converting part-time roles to full-time arrangements.
• The Ley de Startups (Law 28/2022) introduced favourable tax treatment for employee equity compensation, including stock options and restricted stock units.
• Spain's Digital Nomad Visa, launched under the same law, allows non-EU remote workers to reside and work legally in Spain for up to five years.
• Employers with remote workers must provide or reimburse the cost of equipment and connectivity under Royal Decree-Law 28/2020, with amounts often specified by CBA.

Employers that used fixed-term contracts before March 2022 and did not convert them face reclassification of those contracts as indefinite employment by Spanish labour courts.

[REVIEW QUARTERLY: assign to Gloroots Spain compliance lead]

Costs and Financial Planning for Hiring in Spain

Costs beyond gross salary include employer social security contributions of approximately 30.98%, CBA-mandated allowances, and potential severance liabilities that must be provisioned from day one.

Several costs catch employers off guard. Under Royal Decree-Law 28/2020, remote workers are entitled to reimbursement for internet and electricity expenses. Spain's 14-payment salary structure requires provisioning for July and December bonus payments throughout the year. If a collective redundancy (ERE) is triggered, consultation process costs add further financial exposure.

Entity setup in Spain carries significant first-year costs: legal fees, notary charges, accounting, share capital deposit, and ongoing compliance typically total approximately €77,145 in year one. By contrast, employer of record cost through Gloroots runs approximately €6,195 per worker per year at market rates. For companies hiring one to ten employees, the EOR model produces a measurable cost advantage before accounting for internal HR overhead.

Review the full pricing breakdown to model your Spain hiring budget accurately.

Common Challenges and How Gloroots Solves Them in Spain

Practical challenges in Spain extend well beyond payroll. CBA navigation, cesión ilegal compliance, and WFH allowance obligations catch many employers off guard before they hire their first employee.

Each challenge below reflects a distinct legal or operational risk specific to Spain. Gloroots addresses each through its Spanish entity structure, compliant contracts, and dedicated account management.

Why Gloroots Is a Strong EOR Partner in Spain

Gloroots is best suited for companies hiring one to fifty employees in Spain without a local entity, particularly those in tech, finance, and life sciences that need fast, compliant access to Spanish talent.

Spain-specific strengths include CBA complexity management, accurate administration of the 14-payment salary structure, and full compliance with the 2022 labour reform's restrictions on fixed-term contracts. These are not generic payroll tasks; they require country-specific employment expertise.

Companies can hire a Spanish employee in two to four weeks without incorporating a Sociedad Limitada or depositing share capital. That removes the primary barrier to market entry for smaller teams.

Gloroots is a practical fit for market-entry teams, project-based hires, and companies scaling distributed teams across the EU. For broader European hiring, see the employer of record UK page.

Before signing, ask Gloroots to confirm its Spanish entity structure and share its DPA template. This verifies cesión ilegal compliance and GDPR readiness before the employment relationship begins. Full details on EOR services are available on the Gloroots platform.

Start hiring with Gloroots

Set up compliant employment in your target country without building a local entity first.

Sign up for Gloroots

Conclusion

Spain's 2022 labour reform made indefinite contracts the default employment form, raising the compliance bar for every employer entering the market.

Evaluate EOR providers against Spain's cesión ilegal doctrine, confirm the provider's entity structure, and request a DPA before committing. The right EOR removes the compliance complexity that makes direct hiring in Spain resource-intensive, and lets your team focus on building headcount rather than managing filings.

Frequently Asked Questions About Employer of Record in Spain

The questions below cover the most common decision points for companies considering an Employer of Record in Spain, from legal compliance to cost, hiring timelines, and visa sponsorship.

Is an Employer of Record legally compliant in Spain?

An Employer of Record is legal in Spain, but it must comply with the cesión ilegal de trabajadores doctrine under Article 43 of the Workers' Statute. The EOR must be the genuine employer, not a labour-leasing intermediary. This means the EOR must hold its own Spanish legal entity, issue employment contracts directly, and bear full employer liability. Providers that operate through a third-party entity or a commercial agent structure do not satisfy this requirement and expose client companies to illegal labour supply claims.

Before signing with any EOR provider, ask them to confirm whether they operate through a wholly-owned Spanish Sociedad Limitada. This single question determines whether the arrangement is legally sound under Spanish law.

How long does it take to hire an employee in Spain through an EOR?

Hiring through an EOR in Spain typically takes 2 to 4 weeks from contract generation to first payroll run. Setting up a Sociedad Limitada takes 2 to 3 months by comparison.

The main variables are NIE availability for non-EU nationals and the time needed to identify the applicable collective bargaining agreement (CBA).

What does an EOR in Spain cost?

EOR providers in Spain typically charge $299 to $599 per employee per month, covering payroll, social security administration, contract management, and compliance. Entity setup costs in Spain are estimated at around €77,145 in the first year.

Gloroots' pricing for Spain is available on its pricing page. Request a quote for an exact figure based on your team size.

What employee benefits are mandatory in Spain?

Mandatory benefits in Spain include 23 working days of annual leave, 16 weeks of fully paid maternity and paternity leave, sick leave paid by social security from day 4, 14 public holidays, and 2 days of bereavement leave (extendable to 4 days if travel is required).

Employees working remotely more than 30% of the time are entitled to a written remote work agreement and reimbursement of internet and electricity costs under Royal Decree-Law 28/2020.

What is the difference between an EOR and setting up an entity in Spain?

Setting up a Sociedad Limitada in Spain takes 2 to 3 months, requires €3,000 minimum share capital, and creates ongoing obligations for payroll, CBA compliance, tax filings, and eventual dissolution. An EOR lets you hire under its existing Spanish entity, with compliance managed on your behalf.

Entity setup suits companies planning to hire 20 or more employees long-term. An EOR is more cost-effective for smaller teams or market-entry phases.

Can an EOR sponsor work visas in Spain?

Yes. An EOR with a registered Spanish entity can act as the sponsoring employer for non-EU nationals applying for work permits, including the General Work Permit (Cuenta Ajena), EU Blue Card, and Intra-Company Transfer Visa. The EOR must be the registered employer in Spain for sponsorship to be valid.

EU, EEA, and Swiss nationals do not require a work permit and can be onboarded directly without visa sponsorship.

Do employees hired through an EOR in Spain receive the same rights as directly employed workers?

Yes. Employees hired through a compliant EOR in Spain receive the same statutory rights as directly employed workers, including CBA entitlements, social security coverage, annual leave, sick leave, maternity and paternity leave, and severance protections under the Workers' Statute.

The EOR is the legal employer of record, so all employer obligations, including social security contributions and IRPF withholding, are fulfilled in full.