Employer of Record (EOR) in Spain: How to Hire, What It Costs, and How to Stay Compliant

An Employer of Record (EOR) in Spain lets a foreign company hire Spanish employees legally without setting up a local entity. The EOR becomes the legal employer — running payroll, withholding IRPF income tax, and paying social security — while you keep operational control. Two things surprise first-time employers: salaries are paid in 14 instalments a year, and total employer cost is roughly 131% of gross salary.

Spain offers a skilled workforce, strong infrastructure, and a strategic position bridging Europe, Africa, and Latin America. Managing local payroll and employment law can be complex, so an EOR is a practical way to hire quickly and compliantly while your company focuses on operations and growth.

Key benefits of hiring in Spain through an EOR

• Hire employees without establishing a legal entity
• Full compliance with Spanish labour, payroll, and tax laws
• Streamlined onboarding, payroll, and HR administration
• Simplified exit strategy if operations change
• Faster market entry with minimal administrative burden

Why choose an EOR in Spain?

An EOR is ideal for testing the market, building sales or service teams, or managing distributors locally without incorporating a subsidiary. It acts as the legal employer while you direct daily work, and it carries compliance with Spanish labour and tax law.

How much does it cost to employ someone in Spain in 2026?

On top of the gross salary, a Spanish employer pays around 30.65% in fixed social security, plus a variable occupational-accident rate (about 1.5% for office work) — roughly 31–32% all in. The employee’s gross is then reduced by ~6.5% in contributions and progressive IRPF to reach net pay. The breakdown below uses a €3,000/month gross example.

Spain at a glance

Employment framework

Employment contracts

All contracts must be written, signed, and in Spanish, with salary and payments stated in euros, and must define duration, benefits, and notice terms. Since the 2022 labour reform, fixed-term contracts require clear justification, and indefinite contracts are the standard and preferred form.

Probation period

Probation follows the applicable Collective Bargaining Agreement (CBA). In its absence: up to 6 months for specialists/technical roles and 2 months for other employees.

Working hours, overtime & rest

The standard work week is 40 hours, typically Monday to Friday. (A proposed reduction to 37.5 hours was debated in 2024–2025 but rejected by Congress, so 40 hours remains the legal maximum in 2026.) Overtime cannot exceed 80 hours per year, excluding hours compensated with rest. Employees are entitled to a minimum of 12 hours’ rest between shifts and at least 1.5 consecutive days off per week.

Minimum wage (SMI) 2026

The 2026 SMI is €1,221 gross per month across 14 payments (€17,094 per year), a 3.1% increase effective from 1 January 2026. Salary at SMI level is exempt from IRPF. Note the 14-payment structure: 12 monthly salaries plus two extra payments (pagas extraordinarias) in summer and December — many collective agreements set higher minimums than the SMI.

Payroll & taxation

Personal income tax (IRPF)

IRPF is progressive and split between the state and the autonomous communities, so actual rates vary by region (Madrid is among the lowest, Catalonia and Valencia among the highest). The general combined reference brackets are:

Social security contributions (2026)

Employers contribute about 30.65% (common contingencies 23.6%, unemployment 5.5%, FOGASA 0.2%, training 0.6%, and the MEI 0.75%), plus a variable accident rate. Employees pay about 6.5%, including the 0.15% MEI. Both are calculated on a base capped at €5,101.20/month; on the portion above that cap, a progressive solidarity contribution (1.15–1.46% in 2026) now applies.

Employee benefits & leave

• Annual leave: a statutory minimum of 30 calendar days (about 22 working days) per year.
• Public holidays: up to 14 per year (national, regional, and local).
• Sick leave: generally 60% of the base from day 4 to 20 and 75% from day 21, paid via the employer then social security, for up to 365 days (extendable to 545).
• Birth & childcare leave: 19 weeks per parent, individual and non-transferable, paid at 100% by social security (raised from 16 weeks under Royal Decree-Law 9/2025). Single-parent families receive up to 32 weeks.
• Additional parental leave: up to 8 weeks (unpaid) usable until the child turns 8.
• Other statutory leave: marriage 15 days, bereavement 2 days (more with travel), relocation 1 day.
• Remote-work allowance: home-based employees are entitled to have work expenses covered, as set by the collective agreement.

Termination & severance

Termination is regulated and employee-protective, and must be in writing. Options include mutual agreement, employer-initiated dismissal (only for legal reasons), or employee resignation observing notice.

• Notice: typically up to 15 days for objective dismissal (or per the CBA for resignations).
• Severance — objective dismissal (e.g. redundancy): 20 days’ salary per year of service, capped at 12 months.
• Severance — unfair dismissal: 33 days’ salary per year of service, capped at 24 months.

Employees can challenge a dismissal before the labour courts. A reform of unfair-dismissal compensation is under negotiation in 2026 following European Social Charter scrutiny, so this cost may rise. Your EOR manages the process end to end.

Visa & work permits

Hiring non-EU citizens requires work authorisation. Common routes include the Highly Qualified visa, the Temporary Residence & Research visa, the Intra-Company Transfer visa, the Self-Employed visa, and the EU Blue Card. Processing typically takes 4–6 months, and permits are usually valid for one year, renewable for up to two more. Because Spain prioritises resident and EU candidates, an EOR is valuable for navigating permit procedures.

NDA & IP protection

NDAs and confidentiality clauses are enforceable where they protect legitimate business interests. Non-competition clauses must offer financial compensation and can last up to 2 years. Intellectual property created during employment generally belongs to the employer.

What changed for 2026

• Higher minimum wage: the SMI rose 3.1% to €1,221/month (14 payments), retroactive to 1 January 2026.
• Longer parental leave: birth and childcare leave increased from 16 to 19 weeks per parent (100% paid), with the final flexible weeks claimable from 1 January 2026.
• Higher social security: the MEI rose to 0.90% (employer 0.75% / employee 0.15%), and the maximum contribution base increased to €5,101.20/month, with the solidarity surcharge on higher salaries rising.
• Working week unchanged: the proposed 37.5-hour week was rejected by Congress, so 40 hours remains the legal maximum.
• Dismissal-cost reform under review: unfair-dismissal compensation is being renegotiated and may increase.

Frequently asked questions