# Payroll in Spain: employer costs, taxes and compliance

> Machine-readable page from Payroll Overview (https://payrolloverview.com/), the independent index of global payroll providers.
> Canonical page: https://payrolloverview.com/countries/spain/
> Methodology: every figure carries a source and a date in our database; ratings are averages of third-party platforms (https://payrolloverview.com/methodology/).
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> Data updated: January 2026
> Every figure below carries its statutory source and year.

Running payroll in Spain means doing a few things every month without fail: calculating gross salary, deducting employee social security contributions and income tax withholding, adding the employer's own social security contributions on top, and filing everything with the relevant authorities. All of that happens on a monthly cycle, so there is no quarterly shortcut. If you are a foreign company with staff in Spain, you need to be set up to handle each of those moving parts before the first payslip goes out.
This guide walks through what an employee actually costs, how the pay cycle works, what leave and termination rules mean for your payroll runs, and when it makes sense to hand the whole thing to a specialist.

## Employer costs & taxes

| Item | Value | Source |
|---|---|---|
| Employer social security (on top of gross salary) | 30.6% | OECD (2025) |
| Employee social security (withheld from pay) | 6.5% | OECD (2025) |
| Total tax wedge (taxes as share of labor cost) | 41.4% | OECD (2025) |
| Corporate tax rate | 21% | OECD (2025) |

## Pay & payroll operations

| Item | Value | Source |
|---|---|---|
| Payroll cycle | monthly | Perplexity (AI gap-fill) (2026) |
| 13th-month salary | mandatory | Perplexity (AI gap-fill) (2026) |
| Minimum wage (per month) | €1,221 | National government (2026) |
| Average wage (per year) | 54,564 | OECD (2024) |
| Statutory work week | 40 hours/week | Statutory working time (national labour law) (2024) |

## Leave & time off

| Item | Value | Source |
|---|---|---|
| Paid annual leave | 30 days | Perplexity (AI gap-fill) (2026) |
| Public holidays | 10 days | Perplexity (AI gap-fill) (2026) |
| Maternity leave | 16 weeks | OECD Family Database (2024) |
| Paternity leave | 16 weeks | Perplexity (AI gap-fill) (2026) |
| Parental leave | 0 weeks | OECD Family Database (2024) |

## Termination

| Item | Value | Source |
|---|---|---|
| Notice period | 2.1 weeks | World Bank Employing Workers / B-READY (2019) |
| Severance pay (at 1 year tenure) | 15.2 weeks | World Bank Employing Workers / B-READY (2019) |
| Employment protection (OECD EPL, scale 0-6) | 2.4 | OECD (2019) |

## Labor market context

| Item | Value | Source |
|---|---|---|
| Retirement age | 65 | OECD Pensions at a Glance (2024) |
| Unemployment rate | 10.8% | OECD (2025) |
| GDP per capita | $35,327 | World Bank Open Data (2024) |
| Union density | 12.5% | OECD/AIAS ICTWSS (2023) |
| Collective bargaining coverage | 92.1% | OECD/AIAS ICTWSS (2024) |

## Employer contribution breakdown

| Contribution | Rate |
|---|---|
| Pension & disability | 24.18% |
| Unemployment insurance | 6.3% |
| Work injury insurance | 1.5% |

Total: about 31.98% of gross salary, paid by the employer on top of pay.

## Worked example: total employer cost

| Line | Annual |
|---|---|
| Gross annual salary | 55,000 |
| Employer contributions (about 31%) | + 16,814 |
| Total employer cost | 71,814 |

Rounded from the average wage, before benefits, allowances or provider fees.

The gap between what an employee sees on their payslip and what you actually spend is meaningful in Spain. On top of gross salary, employers pay social security contributions that add roughly a third again to the wage bill. That is a significant line item in any headcount budget, so it is worth modelling before you make a hiring decision. The table below shows the exact employer and employee rates.
When you add up employer contributions, employee contributions, and income tax, the total tax wedge, meaning the share of labour cost that goes to the state rather than into the worker's pocket, sits at just over four-tenths of total employment cost. In plain terms, for every euro you spend on an employee, a large slice never touches their bank account. That is useful context when you are setting compensation expectations or comparing a gross offer to a net take-home figure.

Payroll in Spain runs monthly, so you process and pay once per calendar month. There is also a mandatory thirteenth-month payment, meaning employees receive an extra month's salary over the course of the year, typically split across summer and Christmas. You need to account for that in your annual payroll budget from day one, not treat it as a surprise at year end. The statutory minimum wage floor sits at 1,221 euros per month, so any offer below that is not compliant, regardless of what a candidate agrees to.

Employees in Spain are entitled to 30 days of annual leave, plus 10 public holidays, so holiday accrual is a real number to track in your payroll system. When someone leaves, two things hit the final payroll run: a notice period of just over two weeks, and severance of roughly 15 weeks of pay, depending on how the employment ended. Those are not small amounts, and they need to be calculated carefully and paid correctly on exit. Parental leave is also worth knowing about: both maternity and paternity leave run to 16 weeks, paid through the social security system rather than directly by the employer, but you still need to handle the admin side and manage the payroll gap while the employee is out.

If you do not already have a legal entity in Spain, you cannot run payroll there on your own, full stop. Even with an entity, keeping up with rate changes, filing in Spanish, and making sure your processes match current rules is a real ongoing workload. A global payroll provider or employer of record takes on the entity requirement, handles the monthly filings, and absorbs the compliance risk of getting the contributions and withholdings wrong. It tends to make the most sense when you have a small headcount in Spain, when you are moving fast and cannot wait months to set up a local structure, or when your internal team simply does not have Spain expertise on hand.