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Payroll - hiring in Spain

Euro economy

Our firm offers complete payroll preparation and payroll tax reporting services. We prepare all returns and offer full magnetic media and electronic filing capabilities.

  • Full laboral consulting.
  • Fulfilment of all salary form and Social Security form.
  • Laboural Inspections: Representation and defense of the company in any possible laboural inspection that may arise from the State Laboural Court, Regional and/or local authorities.
  • Assistance on the legal systems of Laboural Risk Prevention.
  • Advisement and fulfillment of any application form for retirement salary.
  • Advisement on Subventions for employees contracting.
  • Paycheck Processing
  • Quarterly & Year-end Payroll Tax Filing

Bare in mind in Spain wages are paid monthly.

Payroll / Social security FAQ's

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How much does the employee cost the company?

Employee gross annual salary       33.000,00 €
Employee Social Security 6.35%:     2.095,50 €
Company Social Security 24%:        7.920,00 €
Employee income tax 18%:             5.940,00 €
Employee annual net salary:         24.964,50 €
Company annual employee cost:  40.920,00 €

Salaries vary according to the sector, the professional category, the location of the business, the size of the business, etc. Labor costs in Spain are below EU and USA average.

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Labor regulations

The regulation of work relationships is basically contained in the Workers Statute (Estatuto de los Trabajadores) , collective agreements and work contract.
Collective agreements are those concluded either within a company or group of companies or one or more company organizations, or within one or more worker syndicates or representative organizations. Collective agreements, in their application, are binding. Collective negotiation can be carried out at different levels: agreements in companies, state sectors, provincial sectors, etc.

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Salary is determined in collective negotiation or individual contracts. Collective agreements agree a minimum professional salary level. This minimum can be increased with an individual contract.
Failing a decision in collective agreements or work contracts regarding minimum salary for professionals, the government annually sets a minimum inter-professional salary for the legal working day.
2006 minimum inter-professional salary:

Daily:..............................18,03 €
Monthly:.......................540,90 €
Yearly:...................... 7.572,74 €

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Working days/Holidays

The average duration of the ordinary working day is 8 hours, 40 hours a week, and about 1.800 hours a year. It can be irregularly distributed if business activity requires it.
Employees can take at least 30 calendar days  of paid holidays for a year period, which cannot be substituted with economic compensation.
Also there are 12 publics holidays, along the year.

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Work relationship termination

Company can terminate the work contract for disciplinary reasons in this case not severance payment is due to the employee.
If the company can not accredit the reason for the disciplinary termination, or breaches the formal and procedural communication requisites, it will have to opt to either pay the employee severance pay equivalent to 45 days salary per year worked, up to a maximum of 42 monthly payments, or to readmit the employee under the conditions in place prior to dismissal.
If a permanent contract that is terminated due to objective causes is considered to be an unfair dismissal, then severance pay will be equivalent to 33 days salary per year of service, up to a maximum limit of 24 monthly payments. In these cases, the process for terminating contracts is more efficient, given that it is not necessary to request prior administrative authorisation for individual dismissals. However, such permission it is still necessary for collective dismissals.
A dismissal will be declared null and void if it is due to any of the discriminatory causes prohibited by the Constitution or legislation, or if it violates fundamental rights and collective rights of the employee. An annulled dismissal will result in the immediate readmission of the employee, and payment of any outstanding salary.
Employers can also dissolve a contract for objective reasons, such as economic, technical, organizational or production motives. If these motives are accredited, the severance paid to the employee should be equivalent to 20 days salary per year worked, up to a maximum of one year’s pay. If a dismissal is declared to be unfair or null and void, it will result in the same conditions as those indicated for a disciplinary dismissal.

Type of contracts in Spain:
 - Indefinite contract
 - Training contracts
 - Fixed-length contracts
 - Part-time contracts

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Can foreign Staff work in Spain?

Foreigners who wish to work in Spain, either for themselves or for others, will have to obtain a work permit.
Citizens of European Union Member States and legal immigrants can accept offers of employment and move freely for this purpose within Spain.

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What is Social Security (Seguridad Social)?

Social security guarantees people, families and regularized immigrants suitable protection with regard to eventualities and situations that, due to sickness, accidents or unemployment, require medical attention or economic aid to substitute the lack of income. Employees and employers are required to contribute to Social Security funds.
The Social Security system covers the following aspects: medical attention and medicines, benefits for temporary disability, risk during pregnancy, maternity, provisions for permanent, partial, total or long-term disability, retirement, death of a spouse, orphanage, provisions for unemployment, death and family protection.

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