🇪🇸 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 the new hire through the Toku platform for the employment agreement, statutory registrations and payroll setup. See Onboard Contributors as a Client Admin in Toku for the steps. Toku will confirm the expected onboarding timing for your hire.

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

Spanish employees are covered by the public system (Seguridad Social) through the mandatory payroll contributions shown in Employer Costs above. Toku adds fully employer-paid private health insurance with Sanitas at a flat monthly rate, with no cost to the employee. Private health insurance is the most valued supplementary benefit in Spain and is tax-favored up to certain limits.

Benefits at a Glance

Statutory Benefits

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. All of these are included in the employer costs above.

Supplemental Health Through Toku: Sanitas

The Sanitas plan is private cover through the Sanitas network. It doesn't cover care delivered through the public system, but gives employees fast private access alongside it. Coverage includes: GP, paediatrics, specialists, psychiatry, and podiatry at full cover; psychology up to 15 sessions/year; physiotherapy and rehabilitation; speech therapy up to 80 sessions/year; hospital stays including ICU; all surgery groups including robotic surgery (Da Vinci, Mako, Rosa); transplants; full maternity and delivery cover with newborn care; emergency assistance and ambulance; and travel healthcare abroad up to €12,000/year (max 90 consecutive days). The plan includes the Blua digital health platform (video consultations) and a 24-hour medical helpline.

Standard exclusions apply, including high-risk sports injuries, care through the public system, non-accepted pre-existing conditions, cosmetic treatments, and bariatric surgery.

Costs & Who Pays

The premium is billed to you. The plan covers the employee only; spouses and children can't be added.

Enrollment & Waiting Periods

Coverage is effective from the employee's start date, activated through the Toku platform (Benefits tab). Employees may opt out, but opting out during the cooling-off period means re-enrollment may only be possible at the next annual renewal (the policy renews each April 1). Maximum enrollment age is 75.

Waiting periods from enrollment: 3 months for basic surgery; 6 months for psychology and complex diagnostics; 8 months for childbirth/C-section; 10 months for hospitalisation and major surgery groups.

What You Need to Know About Benefits

• Social security contributions are statutory and can't be opted out of; budget for them as shown in Employer Costs above.
• The Sanitas premium is a flat, age-based monthly cost billed to you, with no employee deduction.
• Dependent cover is not available on the Sanitas plan.
• Questions about the plan can go to [email protected]. For the full employee-facing detail of the plan, see Spain Health Insurance (Sanitas), which gives your team private medical cover with Sanitas.

Common Extras

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.

Annual Leave at Termination

This section describes statutory annual leave. Any additional contractual or company-provided leave above the statutory minimum may follow different carryover, expiry, or payout rules under the employee's agreement or applicable policy, subject to local law.

Statutory leave termination payout: Generally required. Outstanding statutory annual leave is included in final settlement when it cannot be taken before employment ends.

Statutory carryover / look-back: Annual leave is ordinarily intended to be used in the relevant year, but sickness and other protected circumstances can extend the period in which it remains usable.

Admin responsibility: Actively schedule annual leave during the year and track protected-absence carryover separately from ordinary unused leave.

Important exceptions: Sickness, parental or other protected leave can preserve entitlement beyond the ordinary calendar-year framework. Toku should review those balances before termination.

See the Annual Leave / PTO Carryover & Termination Payout Guide for the cross-country framework.

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 updated November 5, 2026 (onboarding link and annual leave guidance only). Last verified October 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.