Managing payroll in Spain requires navigating complex labor regulations, social security systems, and tax withholdings that change frequently. Our specialized payroll services eliminate compliance risks while ensuring your employees are paid accurately and on time. With a wide experience processing Spanish payroll for international companies, our professionals transform this administrative burden into a streamlined, worry-free process that keeps both your business compliant and your employees satisfied.
Understanding payroll complexity in Spain
Spanish payroll involves far more than calculating salaries and taxes. The system encompasses intricate social security contributions, collective bargaining agreements, regional variations, and strict labor law compliance. Recent reforms have added complexity with digital submissions, real-time reporting, and enhanced worker protections.
Key components of Spanish payroll:
- Base salary and complementary payments
- Social Security contributions (employer 29.9%, employee 6.35%)
- Income tax withholdings (IRPF) ranging from 2% to 47%
- 14 annual payments (12 monthly + 2 extra pays)
- Collective bargaining agreement compliance
- Working time registration requirements
- Mandatory insurance and occupational risk prevention
Comprehensive payroll services we provide
Our end-to-end payroll solution covers every aspect of Spanish employment administration, ensuring full compliance while minimizing your administrative burden.
Monthly payroll processing
Accurate calculation of salaries, bonuses, and deductions based on current regulations. We handle complex scenarios including part-time contracts, shift differentials, overtime calculations, and commission structures. Each payslip is generated with detailed breakdowns for transparency.
Social Security management
Complete handling of Social Security registration, monthly contributions, and modifications. We manage employee registrations (altas), terminations (bajas), sick leave processing, and contribution base updates. Our team ensures timely filing through the RED system, avoiding penalties and maintaining compliance.
Tax withholdings and reporting
Precise calculation of IRPF withholdings based on personal circumstances and income levels. We handle quarterly tax form 111 submissions, annual tax form 190 summaries, and provide tax certificates for employee personal tax returns. Special situations like expatriate taxation and stock options are expertly managed.
Cost savings alert: Proper application of Social Security bonuses can reduce employer costs by up to 100% for certain contracts. We automatically identify and apply all available reductions, from youth employment incentives to long-term unemployment programs.
Employee lifecycle management
From hiring to termination, we manage all administrative aspects of the employment relationship in compliance with Spanish labor law.
Onboarding new employees
Swift processing of new hires including:
- Employment contract drafting and registration
- Social Security registration within 24 hours
- NIE assistance for foreign employees
- Occupational risk prevention documentation
- Working time registration setup
- Benefits enrollment and insurance activation
Ongoing employment administration
Continuous support throughout the employment relationship:
- Contract modifications and addendums
- Salary revisions and bonus calculations
- Leave management (vacation, sick, maternity/paternity)
- Disciplinary procedures and documentation
- Performance bonus structuring
- Benefits administration
Termination processing
Compliant handling of employment endings:
- Severance calculation per labor law requirements
- Settlement documentation (finiquito)
- Unemployment documentation
- SEPE notification and certificate issuance
Specialized payroll solutions
Every business has unique needs. Our flexible services adapt to various employment scenarios and industry requirements.
Expatriate payroll services
Complex calculations for international assignees including 7p scheme, Beckham Law applications, tax equalization, split payroll arrangements, and coordination with home country requirements. We ensure optimal tax treatment while maintaining compliance in both jurisdictions.
Multi-province operations
Spain's regional variations affect payroll through different collective agreements and public holidays. We manage payroll across all Spanish regions, ensuring local compliance while maintaining centralized reporting for headquarters.
Compliance and legal requirements
Spanish labor law is among Europe's most protective of workers' rights. Non-compliance can result in significant penalties and reputational damage. Our expertise ensures you meet all obligations.
Working time registration
All Spanish companies must maintain daily records of employee working hours. We assist with the implemenation of compliant systems and manage monthly reporting, ensuring documentation meets labor audits requirements.
Collective bargaining agreements
Most Spanish workers are covered by sector-specific collective agreements (convenios colectivos) that establish minimum conditions beyond general labor law. We monitor applicable agreements, ensuring your payroll reflects current requirements for salaries, benefits, and working conditions.
Data protection compliance
Payroll data requires strict GDPR compliance. Our systems ensure proper data handling, employee consent management, and secure storage with encryption and access controls meeting European standards.
Cost structure and savings opportunities
Understanding Spanish employment costs helps budget accurately while identifying savings opportunities.
True employment costs in Spain
Beyond gross salary, employers face additional costs averaging 32-35% including:
- Social Security: 29.9% of base salary
- Unemployment insurance: 5.5-7.7%
- Occupational accident insurance: 1-3%
- Salary guarantee fund: 0.2%
- Professional training: 0.7%
Available incentives and reductions
Numerous programs reduce employment costs:
- Permanent contract incentives: Up to €6,300 annually
- Youth employment: 100% Social Security reduction
- Long-term unemployed: 50-100% reductions
- R&D personnel: 40% Social Security bonus
- Return of talent: Special reductions for returning emigrants
Example savings: A technology company hiring a young engineer can save €8,000 annually through youth employment incentives and R&D bonuses - effectively reducing employment costs by 25%.
Industry-specific considerations
Hospitality and tourism
Seasonal contracts, split shifts, and tip handling require specialized payroll processing. We manage discontinuous permanent contracts (fijos discontinuos) and ensure compliance with hospitality collective agreements.
Technology sector
Remote work arrangements, flexible hours, and equity compensation need careful structuring. We handle digital nomad contracts and ensure proper tax treatment of international remote workers.
Manufacturing and construction
Complex shift patterns, productivity bonuses, and higher occupational risk rates demand precise calculations. Our systems handle multi-site operations with varying collective agreements.
Getting started with our payroll services
Transitioning to professional payroll management is straightforward:
- Initial consultation: Review current payroll and identify requirements
- Data migration: Secure transfer of employee information
- System setup: Configure calculations and reporting
- Parallel run: Test processing alongside current system
- Go live: Full service commencement with support
