Hiring in Spain

Spain's employment framework is built on the Workers' Statute (Estatuto de los Trabajadores), which sets baseline rights for contracts, working hours, termination, and pay. The 2022 labor reform (Real Decreto-ley 32/2021) reshaped how companies hire by making the indefinite contract (contrato indefinido) the default and sharply restricting the use of temporary contracts. Temporary contracts are now limited to specific circumstances like production spikes (max 6 months, extendable to 12 by collective agreement) or substitution for absent workers. Fixed-discontinuous contracts (fijo-discontinuo) replaced many old temporary arrangements for seasonal or recurring work. These changes mean any company hiring in Spain needs to understand the new contract rules or risk automatic conversion to permanent status.

Termination in Spain follows strict rules that distinguish between objective dismissal and disciplinary dismissal. Objective dismissal covers economic, technical, organizational, or production-related reasons and requires 15 days' written notice plus severance of 20 days' salary per year of service, capped at 12 monthly payments. Disciplinary dismissal is for serious employee misconduct and carries no severance if the courts rule it justified (procedente). However, if a court finds a disciplinary dismissal unjustified (improcedente), the employer must pay 33 days' salary per year of service, capped at 24 monthly payments. For contracts signed before February 2012, the rate on the pre-reform portion is 45 days per year, capped at 42 months. Employers almost always opt to pay the severance rather than reinstate, making wrongful dismissal costs a significant factor in workforce planning.

Working time in Spain is capped at 40 hours per week on an annual average basis, and collective bargaining agreements often set lower limits. Overtime is capped at 80 hours per year and must be compensated with either pay (at a minimum of the regular hourly rate, though most agreements set a premium) or equivalent time off within 4 months. Employees are entitled to a minimum of 30 calendar days (22 working days) of paid vacation per year, which cannot be replaced with financial compensation except at termination. Spain also has 14 national and regional public holidays, and many collective agreements add local holidays on top of that. Workers get 15 calendar days of paid leave for marriage and varying short leaves for family emergencies, moving, and medical appointments.

Payroll costs in Spain carry substantial employer-side social security contributions. Employers pay roughly 30.5% of gross salary to Social Security, broken down as 23.6% for common contingencies, 5.5% for unemployment, 0.7% for vocational training (FOGASA and professional training), and 0.7% for work accidents (varies by industry risk). Employees contribute about 6.35% (4.7% common contingencies, 1.55% unemployment, 0.1% training). Spain also requires employers to pay workers in 12 monthly installments plus two extra payments (pagas extraordinarias), typically in June and December, though some collective agreements prorate these across 12 months. Income tax withholding (IRPF) is progressive and ranges from 19% to 47% depending on the region and salary level.

Parental leave in Spain is among the most equal in Europe. Each parent gets 16 weeks of fully paid leave (capped at the Social Security maximum base), with the first 6 weeks mandatory and taken immediately after birth or adoption. The remaining 10 weeks can be taken in weekly blocks until the child turns 1. Both parents receive the same entitlement independently, meaning a couple can take up to 32 weeks combined. The Social Security system covers 100% of the regulatory base during this period. Beyond parental leave, employees can request unpaid leave (excedencia) of up to 3 years for childcare, with job reservation guaranteed for the first year and a position in the same professional category for the remaining two years.