Payroll in Spain
With regional differences in tax deductions and various statutory leave requirements, payroll reporting and administration can be more complicated in Spain than in many other countries.
Spanish labor law has strong worker protections, which require great attention to detail, so if you’re looking to administer accurate and compliant payroll in Spain, you’ll need a firm understanding of the local tax and employment regulations that govern payroll processing and reporting.
The euro (EUR) is the official currency of Spain.
Employees must be paid on a monthly basis or shorter. Payments must be made in legal tender, check or bank deposit, and any late payments can accrue interest at a 10% annual rate.
Taxes for payroll in Spain
The current corporate income tax rate in Spain is 28%.
Generally, employee income tax in Spain is assessed on a progressive scale, with rates ranging from 19% to 45% depending on annual income and the autonomous region where the taxpayer resides.
Current tax brackets for both state and federal rates are:
- €0 – €12,450: 19%
- €12,450 – €20,200: 24%
- €20,200 – €35,200: 30%
- €35,200 – €60,000: 37%
- over €60,000: 45%
Employers are required to withhold income tax and pay the tax office on behalf of their employees. Payment for withheld amounts are due by the 20th of each month. Employers must also complete Form 111: IRPF Withholdings at Source and submit it to the Ministry of the Treasury.
Social Security contributions are divided between the employer and employee. The employee contribution rate is 6.35% – 6.40% based on gross salary and employer contribution is around 31% – 33% of gross salary.
Contributions represent the public insurance system for employees in various contingencies such as illness, accident, maternity, retirement and unemployment.
Generally, the unemployment contribution rate for employers is 5.5% and the rate for employees is 1.55%.
Salary Guarantee Fund
Employers, not employees, are liable for a 0.2% contribution rate to the Salary Guarantee Fund (Fondo de Garantía Salarial, FOGASA).
The vocational training contribution rate for employers is 0.6% and the rate for employees is 0.1%.
Employee compensation and benefits in Spain
In Spain, employment contracts are ruled by collective bargaining agreements, known as the convenio colectivo. These agreements regulate labor standards by job type like, legal salary range, working hours and vacation days, and they have a big impact on the structure of payroll in Spain.
When processing Spanish payroll, you’ll need to consider the following employment regulations:
Partner with Safeguard Global for your payroll in Spain
Hundreds of organizations depend on our global payroll experts to ensure their payroll processing is accurate and compliant with local tax and employment requirements.
We support payroll in Spain in various ways: through our employer of record solution, as a local payroll provider for your Spanish operations, and as part of a managed provider solution for your global organization.
As an employer of record in Spain, we handle payroll for your Spanish workers, ensuring accuracy and compliance, while you manage their day-to-day contributions.
As a local provider of payroll in Spain, we can help your Spanish operations:
- Comply with Spanish labor laws and regulations
- Deduct the appropriate tax and Social Security withholdings
- Ensure your employees in Spain are paid accurately and on time
As a Global Managed Payroll provider, we offer centralized multinational payroll in over 150 countries—with streamlined processing across countries, currencies, languages and time zones— to help companies gain global visibility to pay data and make smarter workforce decisions.
Whether you need payroll support in Spain through an employer of record, a local provider or as part of a comprehensive global payroll system, contact us to let our experts find the right solution for you.
The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.
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