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Hiring employees in other countries can be tricky, and managing compliant benefits for employees outside of your home country can be a significant challenge. Employee benefits in Spain include a variety of common statutory leave entitlements and a collection of more specific provisions.
Minimum wage, maternity and paternity leave, paid time off, overtime, illness, and insurance all have their place within Spanish employment law.
In this guide to Spain employee benefits, we’ll explain the mandatory benefits you must provide plus some additional perks you can offer to give your business the edge to acquire and retain top Spanish talent.
Generally, Spanish employment regulations stipulate that permanent and temporary employees are entitled to the same benefits, according to the Spanish Workers’ Statutes (Estatuto de Los Trabajadores). Self-employed workers and contractors are not entitled to benefits in Spain.
From the breakdown we have provided above, you can understand the criteria employees have to meet to qualify for benefits. Here are the statutory and common benefits you should prepare to offer to your Spanish employees.
Spanish employees are guaranteed a minimum of 22 working days of annual leave, equivalent to 30 calendar days. This leave entitlement can be split up to vest at various times of the year as long each duration is at least two weeks long. Note that Spanish leave entitlements cannot be swapped for monetary compensation, so you must encourage employees to take their paid time off as it accrues.
In addition to the month-long leave entitlement, Spanish labor regulations grant national, state, and local public holidays as mandatory paid time off for employees. Spain observes 10 national public holidays and between 20-30 state and local holidays, depending on the locality.
During paid time off, employees are entitled to their normal salary and any benefits that would accrue to them if they were working, including health and life insurance, company vehicles, etc.
While companies cannot pay employees in lieu of providing time off, there are some workarounds. Leave entitlements may be rolled over to vest later. This can come in handy if your Spain-based employee is critical to your operations and agrees to forgo the leave entitlement for the time being. However, you cannot delay leave indefinitely.
Pregnant employees are guaranteed 16 weeks of maternity leave that begins immediately upon delivery. Maternity leave increases by two weeks for each additional child delivered, in case of multiple births or medical complications associated with pregnancy and birth. Assuming there are no incident complications, an employee who gives birth to triplets would be entitled to 20 weeks off work.
In addition to the mandatory 16 weeks of maternity leave, employees can request additional time off if medically necessary.
Employees on maternity leave also qualify for social security benefits in some cases. The employee must have worked for a minimum qualifying period to be entitled to these benefits, depending on age.
Employees under 21 years old have no qualifying period: benefits are effective upon employment.
Employees between 21 and 26 years old have a qualifying period of 90 days paid employment for the past seven years. Alternatively, benefits still apply for employees who have worked a total of 180 days of paid employment in their lifetime.
Employees aged over 26 years old have a qualifying period of 180 days’ paid employment within the last seven years. Benefits will still accrue if the employee in question has worked a total of 360 days of paid employment since they got into the job market.
The partner parent of a newly born child is entitled to two working days’ paid absence, effective immediately after the child is born. Additionally, partners are entitled to 13 days of paternity leave, which increases by two days for each additional child. The parent in question qualifies for social security benefits, provided they have had 180 days of paid employment within the previous seven years.
Social security benefits for both parents are equal to 100% of their respective income. Spanish law permits parents in LGBT partnerships to take leave, as well as adoptive parents.
Spanish employees are entitled to a minimum wage of €1,108.30 per month. The minimum wage should also include benefits such as meal vouchers, medical insurance, and company vehicles (for qualifying employees), all paid by the hiring company, in addition to base pay.
Spanish labor laws stipulate that employees are only expected to work 40 hours a week on average. Overtime is permitted if it does not exceed an 80-hour limit over the course of a year. In return, employees are entitled to payment that is at least 50% more than their normal rate, or compensatory paid time off, earned at the same increased rate.
Both the employer and employee are required to keep a record of overtime worked to ensure fair compensation.
Spanish labor law requires employers to make provisions for employees’ medical insurance. Enrolment with the General Social Security Fund (Tesoreria General de la Seguridad Social - TGSS), the government agency that regulates social security benefits, is compulsory in Spain. Typically, the social security premium stands at 28.3% of an employee’s salary, where the employer is mandated to pay 23.6% while the employee makes up the remaining 4.7%.
Spanish employees are guaranteed sickness benefits under the provisions of Spanish labor regulations, although employees are not entitled to any payments after the first three days they are diagnosed with a common illness. From the fourth day, the employer must provide sickness benefits until the 15th day, when any payments made to the sick employee can be charged to the social security office, provided the employee in question is registered.
After 365 days of making sickness benefits to an employee (and receiving reimbursements on payments to the social security office), the sick employee’s benefits are then paid directly from the social security office.
Social security payments vary based on an employee’s salary and position within their employer’s firm. It is not unusual for employers to match an employee’s sickness benefits to equal the employee’s standard salary.
Spain has one of the highest pension rates in the world, paid by the government at around 80% of an employee’s final gross annual salary before retirement.
Employers are not always required to provide pension benefits, but many choose to do so to attract top talent.
Supplementary pension plans are intended to provide total retirement income (inclusive of Social Security benefits) of between 60% to 80% of a final salary. Pensions are often a percentage of earnings regardless of service.
If service is considered, the maximum pension accumulated after a given number of years (usually 20 or more) and annual percentage of pension credited for each year of service is 1.5% to 2% of earnings.
The maximum pension (inclusive of Social Security) is between 60% and 80% of the final salary after a full career with an employer.
In addition to base wages, Spanish employees are entitled to a 14th-month salary, known as the pagas extraordinarias (extra or special pay). These extra payments are typically made in the summer and around the Christmas holidays, and each payment amounts to 1/14th of the employee’s total annual salary.
Providing benefits to your employees in Spain can be a complicated challenge without a dedicated operational plan. To offer benefits to employees in Spain, you typically have two options.
First, you could set up your own legal entity in Spain. This will allow you to employ workers in the country legally. But to provide benefits to those workers internally, you must find local benefits providers to manage benefits like gym memberships, pensions, and healthcare.
Setting up an entity can be expensive, and managing multiple benefits providers can be expensive, inefficient, and time-consuming. This option is best suited for companies with a sizable team of long-term employees in the country to justify the investment and ongoing commitment.
The simplest and more scalable option is to work with a global employment partner like Remote. Remote makes it easy to onboard your employees in Spain in days while handling payroll, benefits, taxes, and local legal compliance on your behalf. With Remote’s local legal entity in Spain, we can ensure you stay compliant with local labor laws, while still offering your own customized benefits package consistently across the globe.
Hiring a team member in another country might seem complicated, but Remote is here to keep things simple. We help companies of all sizes provide first-class benefits packages to workers in Spain. We can help your company attract top talent while remaining compliant with all applicable Spanish and EU laws.
Need to know more about hiring workers in Spain? Head over to Remote’s Spanish country explorer page for a quick and easy guide to Spain and its labor laws. We would be happy to answer any questions you may have to help you provide the best experience for your Spanish team.
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