🇪🇸 Hiring in Spain

💡 Everything you need to know to hire and manage employees in Spain through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 7-10 business days between submitting a new hire and their start date. Your new hire needs to provide their NIE or DNI identification number, and Toku registers them with Social Security before day one and registers the contract with the public employment service. A sector collective agreement (convenio) may apply to the role, which can affect minimum terms; Toku confirms this during setup.

Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.

Employer Costs

On top of gross salary, employers in Spain pay social security contributions on a base capped at EUR 5,101.20 per month (2026):

As a rule of thumb, total cost of employment is roughly 130-132% of gross salary. Note that annual salary in Spain is traditionally structured as 14 payments (12 monthly salaries plus extra payments in July and December); these are part of the agreed annual salary, not an additional cost, and are often prorated into 12 monthly payments.

Employees pay their own share too: roughly 6.5% in social security contributions plus progressive income tax (19-47%, varying by region). These are withheld from gross salary, not charged on top. Toku calculates and remits all of the above.

Compensation & Payroll

Toku runs one payroll per month in Spain, with payment at the end of the month, and employees receive an itemized payslip (nómina) each cycle. The 2026 minimum wage is EUR 1,221 gross per month in 14 payments (EUR 17,094 per year), which equals EUR 1,424.50 per month if prorated over 12 payments. All salaries are paid in EUR.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire.
• Indefinite-term contracts are the default in Spain. Fixed-term contracts are only allowed in narrow cases (short-term production needs, capped at 6 months and extendable to 12 by collective agreement, or covering an absent employee).
• Sector collective agreements (convenios) are widespread and can set pay, hours, and benefits above statutory minimums.
• Probation is set in the employment agreement, up to the statutory maximum: 6 months for qualified technical staff and 2 months for other employees (3 months for non-qualified staff in companies with fewer than 25 employees). During probation, either party may end employment without notice or severance.

Working Hours

The standard working week is 40 hours, averaged over the year, with a daily limit of 9 hours unless a collective agreement provides otherwise. Overtime is capped at 80 hours per year and is compensated either with equivalent paid time off (within 4 months) or with pay as set by the applicable collective agreement, and never below the regular hourly rate. Employees also have a legal right to digital disconnection outside working hours.

Leave Entitlements

Annual leave cannot be paid out in cash except on termination, and unused days generally cannot carry over past the calendar year without agreement. Birth and adoption leave is funded by Social Security at full pay (capped), with the first 6 weeks mandatory immediately after birth or adoption. Collective agreements may add extra leave days.

Public Holidays (2026)

Spain recognizes up to 14 public holidays per year, and the exact calendar varies by autonomous community. The national holidays for 2026 are:

Autonomous communities and municipalities add up to 4 further holidays of their own, so your employee's calendar depends on where they live.

Benefits: Required vs. Common Extras

Statutory (included in employer costs above): Spain's social security system provides public healthcare, pensions, unemployment benefits (up to 24 months depending on contribution history), temporary and permanent disability benefits, and parental leave benefits. Work accident and occupational disease insurance is also mandatory and funded through employer contributions.

Through Toku you can add supplemental private health insurance: see Spain Health Insurance (Sanitas), which gives your team private medical cover with Sanitas, the most valued supplementary benefit in Spain and tax-favored up to certain limits.

Other common extras include meal vouchers (tax-exempt up to EUR 11 per working day), transport cards, supplementary pension plans, life and disability insurance, and flexible remuneration plans that let employees allocate part of gross salary to tax-advantaged benefits. Toku can advise on the cost impact of any of these.

Ending Employment

There is no at-will employment in Spain: every dismissal needs valid grounds and a prescribed procedure, and courts are notably employee-friendly, so involve Toku early if you are considering ending an employment relationship. For the process, see How to Terminate an Employee or Contractor.

Objective dismissals carry statutory severance of 20 days' salary per year of service, capped at 12 months' salary, paid at the time of notice. If a dismissal is ruled unfair, severance rises to 33 days' salary per year of service, capped at 24 months' salary, so budget conservatively and plan any exit with Toku.

Hiring Someone from Overseas?

EU, EEA, and Swiss nationals can work in Spain without a permit. Other nationals need a work and residence permit; the main routes are the Highly Qualified Professional visa, the EU Blue Card, and the Digital Nomad Visa, with processing times of 1 to 6 months depending on the permit. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.