How much does it really cost to hire in Spain in 2026?
Spain pays salaries in 14 instalments a year, not 12. The two extraordinary payments (pagas extraordinarias) are mandatory under the Workers' Statute. Add employer social security at 31.65% of gross, and the real cost of a Spanish hire climbs well above the monthly salary figure on the offer letter.
· Spain guide
Illustration · Barcelona, Spain
Spain uses a 14-payment salary year. Two extraordinary payments are required by law. Many employers spread them across 12 monthly instalments by agreement, but the obligation exists either way.
Employer social security sits at 31.65% of gross salary. That is not a single fixed pot. It covers common contingencies, unemployment insurance, the Intergenerational Equity Mechanism (MEI), and other levies. The minimum monthly salary (SMI) for 2026 is €1,221/month across those 14 payments.
Employees get 22 days working days of paid leave plus 14 public holidays each year. Parental leave is 19 weeks for each parent from 2026. Income tax (IRPF) runs from 19% at the bottom to 47% at the top.
What does an employer pay in Spanish social security?
The employer social security rate in Spain is 31.65% of gross salary. This covers unemployment, common contingencies, professional risk, and the MEI levy. It applies on top of every euro of agreed gross pay.
The employee side sits at 6.48% of gross. Both rates are paid to the Social Security Treasury (Tesoreria General de la Seguridad Social, TGSS) each month via the payroll return.
| Contribution side | Rate | Basis |
|---|---|---|
| Employer social security | 31.65% | Gross salary (typical indefinite contract, office worker) |
| Employee social security | 6.48% | Gross salary |
The 31.65% employer rate is described as corroborated in the compliance cache. The rates are set by the annual Social Security Contributions Order (Orden de Cotizaciones). The 2026 order continues 2025 rates. Rates for professional risk (accidente de trabajo) also vary by sector activity. The figures above represent a typical indefinite-contract office hire. Sector-specific risk premiums or collective agreements may add to the base.
The 14-payment obligation
Spain requires 14 salary payments per year under Workers' Statute Art. 31. Two extraordinary payments (pagas extraordinarias) are due at Christmas and in summer. Collective agreements may allow prorating them across 12 monthly payments instead. Either way, the annual cost is the same. The distinction matters for cash flow planning: a hire quoted at a monthly gross figure carries two months of additional payment unless the agreement explicitly prorates.
The Workers' Statute requires at least two extraordinary salary payments per year, customarily paid at Christmas and in summer. Collective agreements may allow these to be prorated into the 12 regular monthly payments. The obligation exists in both structures.
Source: Real Decreto Legislativo 2/2015, Estatuto de los Trabajadores, BOE
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Identify the applicable convenio
Before modelling cost, confirm which sector collective agreement (convenio colectivo) covers your hire. It sets any floors above the SMI, bonus obligations, and extra leave entitlements.
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Set the gross salary above the SMI floor
The minimum gross is €1,221/month across 14 payments. If your agreement prorates the extraordinary payments, the monthly figure is higher; the annual total stays the same.
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Add employer social security
Apply 31.65% employer social security to the gross salary. File the monthly contribution return to the TGSS alongside the payroll.
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Withhold and file IRPF
Calculate the applicable IRPF withholding rate per employee and deduct it monthly from gross. File the Modelo 111 quarterly within 20 days of each quarter end.
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Budget leave and sector extras
Allow for 22 days paid working days of annual leave plus 14 public holidays. Check the convenio for any supplementary sick pay, insurance, or bonus obligations before finalising the annual budget.
What does a EUR 40,000 hire actually cost?
A EUR 40,000 annual gross salary in Spain carries employer social security at 31.65%. The illustrative totals below are computed from that verified cached rate. They are labelled illustrative and rounded to the nearest euro.
Amounts marked illustrative are computed from cached rates. They are not quoted statutory figures. The actual total depends on the applicable collective agreement, sector risk category, and any agreed benefit obligations.
| Line | EUR 40,000 hire (illustrative) | Basis |
|---|---|---|
| Gross annual salary | EUR 40,000 | Contract |
| Employer social security (31.65%) | EUR 12,660 (illustrative) | 31.65% x EUR 40,000, corroborated rate |
| Annual leave cost (22 days paid working days) | Included in gross | Workers' Statute Art. 38 |
| Teamed fee | from $599/month (USD) | Zero FX mark-up |
| Estimated total employer cost | EUR 52,660 (illustrative) | Approximately 132% of gross (illustrative) |
The EUR 12,660 social security figure is illustrative, computed by applying the corroborated 31.65% employer rate directly to the EUR 40,000 gross. Your actual contribution will vary if the hire falls under a collective agreement that modifies the base or if the sector carries a higher professional risk premium.
Use the Teamed Employer Cost Calculator to model your specific hire before making an offer.
What mandatory leave and benefits add to the total?
Spain requires 22 days paid working days of annual leave per year. That is equivalent to 30 calendar days. Workers also get 14 paid public holidays: 8 national, 2 regional, and 2 local.
From 2026, each parent gets 19 weeks of paid parental leave for births, adoptions, or taking a child into foster care. The Social Security system funds the benefit at 100% of the regulatory base.
| Entitlement | Amount | Who pays |
|---|---|---|
| Paid annual leave | 22 days (working days) | Employer |
| Public holidays | 14 | Employer |
| Parental leave (birth parent) | 19 weeks | Social Security |
| Parental leave (co-parent) | 19 weeks | Social Security |
| Sick pay waiting period | 3 days unpaid | No one pays days 1 to 3 |
| Sick pay days 4 to 15 | 60% of regulatory base | Employer |
How sick pay works in practice
The first 3 days days of sick leave are unpaid. From day 4 to day 15, the employer funds the benefit at 60% of the employee's regulatory base. From day 16 onward, the Social Security system takes over. This structure means short absences are the employer's cost; extended illness shifts to the state.
Collective agreements and sector extras
Spain's collective bargaining system (convenios colectivos) operates at sector and company level. A convenio may require additional leave days, higher sick pay rates, supplementary insurance, or specific bonus obligations. Identify which collective agreement covers your hire before modelling the annual cost. Sector agreements in industries such as banking, insurance, and large retail tend to carry the heaviest extras.
What is the minimum wage and probation cost in Spain?
The statutory minimum monthly salary (SMI) for 2026 is €1,221/month paid over 14 payments. On an annual basis that is €1,221/month multiplied by 14. Every contract must meet or exceed this floor.
Probation periods carry no social security exemption. The same 31.65% employer rate applies from day one. During probation, either party may end employment without notice or compensation under Workers' Statute Art. 14.
| Parameter | Figure | Statute |
|---|---|---|
| Minimum monthly salary (SMI 2026) | €1,221/month | Real Decreto 126/2026 |
| Salary payments per year | 14 | Workers' Statute Art. 31 |
| Standard working week | 40 hours | Workers' Statute Art. 34 |
| Maximum probation (non-technical staff) | 2 months | Workers' Statute Art. 14 |
| Maximum probation (qualified technicians) | 6 months | Workers' Statute Art. 14 |
The SMI floor applies whether pay is expressed as monthly, weekly, or daily. If the collective agreement for your sector sets a higher floor, that applies instead. Always check the applicable convenio before drafting the offer.
Spanish income tax (IRPF) bands in 2026
Spain uses a progressive income tax called IRPF. The rates below are the national (state) scale only. Each of Spain's 17 autonomous communities levies a parallel regional scale on top. Combined state and regional rates vary by region.
The top national rate is 47%. It applies to income above €300,000 a year. Spain withholds IRPF monthly via payroll (retencion). Employers file the Modelo 111 quarterly, within 20 days of the quarter end.
| Income band (national scale, 2026) | IRPF rate |
|---|---|
| Up to €12,450 a year | 19% |
| €12,450 to €20,200 a year | 24% |
| €20,200 to €35,200 a year | 30% |
| €35,200 to €60,000 a year | 37% |
| €60,000 to €300,000 a year | 45% |
| Above €300,000 a year | 47% |
These are national rates only. The autonomous community where the employee lives adds a mirrored regional scale. For example, Catalonia reaches a combined top rate above 50%, while Madrid applies a lower regional scale. The correct withholding rate is set per employee by the tax authority (Agencia Tributaria) based on personal circumstances including family status.
Spain also has a personal minimum (minimo del contribuyente) of EUR 5,550 per year. This works as a tax credit against the lowest rate, not as a zero-rate income band. It is not a personal allowance in the UK or German sense.
Source: PwC Tax Summaries: Spain, taxes on personal income 2026
How does Teamed handle Spain payroll for you?
Teamed becomes your legal employer of record in Spain for from $599 per employee per month, with zero FX mark-up in any currency.
The 14-payment cycle, the IRPF withholding, and the monthly TGSS filings all run on one platform.
Real HR and legal experts manage your Spanish hires from the first contract through every Modelo 111 filing and annual IRPF reconciliation. An actual person, not a pooled queue, manages your account. There is no setup fee and no exit fee. Employer social security contributions passes through at cost, itemised on every invoice so you see every line.
Spain's payroll environment has more moving parts than most clients expect. The 14-payment structure, the convenio colectivo obligations, and the regional IRPF variation all require precise local knowledge. Teamed's experts track each change so you don't have to. You can graduate from EOR to your own Spanish legal entity when the team size justifies it, and EOR is the right model until it isn't. Run the Employer Cost Calculator to model the full picture before you make the offer.
Key sources: Estatuto de los Trabajadores (BOE), Real Decreto 126/2026 SMI, and Ley General de la Seguridad Social (BOE).
Frequently asked questions
What is the total employer cost of hiring someone in Spain?
Add employer social security at 31.65% of gross salary to the agreed annual gross. A EUR 40,000 gross hire carries approximately EUR 12,660 in employer social security, giving a total of approximately EUR 52,660 (illustrative, computed from the corroborated 31.65% rate). The actual figure depends on the applicable collective agreement and sector risk category. Budget 14 salary payments, not 12.
Does Spain require 13th and 14th month salary payments?
Yes. Spain requires 14 salary payments per year under Workers' Statute Art. 31. Two extraordinary payments (pagas extraordinarias) are legally mandatory. They are customarily paid at Christmas and in summer. A collective agreement may allow prorating them into the 12 regular monthly payments instead. Either way, the annual total obligation is the same.
What is the minimum wage in Spain for 2026?
The statutory minimum monthly salary (SMI) for 2026 is €1,221/month, paid over 14 payments per year. This was set by Real Decreto 126/2026 effective from 1 January 2026. If the collective agreement for your sector sets a higher floor, that applies instead.
How does sick pay work for Spanish employees?
The first 3 days days of sick leave are unpaid. From day 4 to day 15, the employer pays 60% of the employee's regulatory base. From day 16 onward, the Social Security system funds the benefit. Short absences are therefore an employer cost. Extended illness shifts to the state.
What is the top income tax rate in Spain?
The top national IRPF rate is 47%, applying to income above €300,000 a year. That is the national scale only. Each autonomous community levies a parallel regional rate on top. Combined rates vary by region. The employer withholds IRPF monthly from the employee's gross salary and files the Modelo 111 quarterly within 20 days of the quarter end.
The question we hear most from clients new to Spain is not about the social security rate. It is about the 14-month salary. They quoted a monthly gross and built a 12-month budget. The two extraordinary payments were not in it. That gap appears on the first December payroll. Get the annual figure, not the monthly one, before you sign the offer.
Spain pays salaries 14 times a year. Build that into your budget from day one.
The 31.65% employer rate is one number. The convenio colectivo that sits on top of it is the one that changes by sector.
Know the annual cost before the offer goes out. The TGSS does not adjust for estimates.
