Employer of Record in Spain: 2026 Cost and Compliance Guide

Spain is one of Europe's deepest talent markets for engineering, sales and customer-facing roles, with strong hubs in Madrid, Barcelona, Valencia and Málaga. Salaries sit below the Western European average, but employer social security is among the highest in the EU at roughly 32% of gross pay. Contributions stop at a monthly ceiling, so the percentage falls for senior salaries.

Without a Spanish company, an Employer of Record (EOR) can employ your hire under a Spanish contract, register them with Social Security (Seguridad Social), run payroll and handle mandatory time recording. You direct the day-to-day work.

Spain also has a legal wrinkle that matters for EOR arrangements: the prohibition on cesión ilegal de trabajadores (illegal transfer of workers). This guide explains it, along with the full cost picture, the rules that drive it, how providers compare on published pricing, and when a Spanish Sociedad Limitada (S.L.) makes more sense. Figures link to official sources. We do not test or use the providers listed; see our methodology.

An Employer of Record is a company with a legal entity in Spain that employs staff for foreign businesses. It signs the Spanish employment contract, registers the employee with the Seguridad Social and the tax agency (Agencia Tributaria), withholds income tax (IRPF), pays social security contributions, applies the relevant collective agreement (convenio colectivo), keeps the mandatory daily working-time record, and manages leave and terminations under the Workers' Statute (Estatuto de los Trabajadores).

You pay the EOR a monthly invoice covering salary, employer contributions and its fee. The employee works in your team and follows your direction, while the EOR carries the formal employer obligations.

Spanish law restricts placing workers at another company's disposal except through a licensed temporary work agency (ETT). Article 43 of the Workers' Statute prohibits illegal transfers of workers, and the consequences can include joint liability and the employee's right to become a permanent employee of either company. EOR providers in Spain address this in different ways, for example by operating a licensed ETT or by structuring the service carefully. Ask each provider how its Spanish model complies, and get local advice for long-term hires.

Spanish employment cost has three layers: gross salary (commonly paid in 14 instalments), employer social security (about 32% up to the contribution ceiling) and the EOR fee.

Because contributions stop at a monthly ceiling of €5,101.20 (about €61,200 a year), employer costs as a share of salary fall sharply for senior hires. The tables and estimator below apply that ceiling.

Annual cost at example salaries

What these figures include and exclude

• Contributions are calculated on a monthly base capped at €5,101.20, so earnings above roughly €61,200 a year attract no further standard employer contributions.
• A small solidarity contribution applies to earnings above the ceiling from 2025 and rises gradually. It is not included in these estimates.
• Employee social security (about 6.5% including the employee MEI share) and IRPF income tax are deducted from gross pay and are not employer costs.
• Fixed-term contracts carry a higher unemployment rate (6.70% instead of 5.50%), and very short contracts carry an extra fixed contribution.
• Collective agreements can add costs, such as extra payments above two, seniority bonuses or allowances.

Estimate your own cost

Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive.

The Workers' Statute sets minimums, and the applicable collective agreement (convenio colectivo) for the sector or company often improves them. Your EOR should confirm which agreement applies to your hire.

Employment contracts

Open-ended contracts are the default since the 2021 labour reform. Fixed-term contracts are limited to specific, justified circumstances.[3]Verify

Using fixed-term contracts for permanent needs risks conversion to an open-ended contract. Contracts must be registered with the public employment service (SEPE).

Probation period

Up to 6 months for qualified technical staff and up to 2 months for other employees (3 months in companies with fewer than 25 employees), unless the collective agreement says otherwise.[3]Verify

Working time

Maximum 40 hours a week on an annual average, with at least 12 hours' rest between working days.[3]Verify

A proposal to reduce the legal week to 37.5 hours was rejected by Congress in September 2025. Many collective agreements already set shorter weeks.

Mandatory time recording

Employers must record each employee's daily start and finish times and keep the records for four years.[3]Verify

Required since 2019. A regulation requiring digital, tamper-proof systems has been in preparation.

Extra payments

At least two extra salary payments a year, normally one at Christmas and one in summer. They may be prorated monthly by agreement.[3]Verify

Annual leave

At least 30 calendar days of paid leave a year (equivalent to about 22 working days).[3]Verify

Public holidays

Up to 14 paid public holidays a year: a mix of national, regional and local days, so the calendar varies by location.[3]Verify

Sick and parental leave

Sick pay is partly funded by the employer (from day 4 to day 15 of sickness) and then by Social Security. Birth and childcare leave is paid by Social Security.[2]Verify

Collective agreements often require the employer to top sick pay up to 100% of salary.

Termination by the employer

Dismissal must be disciplinary or for objective grounds. Objective dismissal pays 20 days' salary per year of service (max. 12 months' pay) with 15 days' notice.[3]Verify

If a court finds the dismissal unfair, compensation rises to 33 days per year of service (max. 24 months), unless the employer chooses reinstatement. Most dismissals are settled at conciliation.

Resignation notice

Set by the collective agreement or contract, commonly 15 days.[3]Verify

These EOR providers publish information about employing in Spain. Prices are their own published starting rates in USD. Quote-only providers are marked.

In Spain, the delivery model matters even more than usual because of the rules on worker transfer. Ask each provider whether it employs through its own Spanish entity, a licensed temporary work agency (ETT) or a partner, and get the answer in writing.

For Spain-specific selection criteria and a shortlist, see best EOR providers in Spain. For each provider's products and pricing model, see the provider directory.

The main alternative is to set up a Sociedad Limitada (S.L.), Spain's private limited company, or to register a branch of your foreign company. Since the 2022 Crea y Crece law, an S.L. can be formed with a minimum share capital of €1 (subject to reserve conditions). Formation still involves a notarial deed, tax numbers (NIF), registration with the Mercantile Registry and Social Security employer registration.

Ongoing costs come from the accounting and payroll adviser (gestoría or asesoría), corporate tax filings, annual accounts deposits, a registered address and banking. The company is subject to Spanish corporate income tax (general rate 25%).

For a step-by-step version of this calculation, see EOR vs local entity: a break-even framework.

1. 1

   Define the role and annual salaryDay 0

   Agree an annual gross salary, decide whether it will be paid in 14 or 12 instalments, and confirm the role justifies an open-ended contract.

2. 2

   Identify the collective agreement

   Ask the EOR which convenio colectivo applies. It can set minimum pay by job category, extra payments, working hours and allowances.

3. 3

   Compare itemised quotes1–3 days

   Request Spain-specific quotes covering the fee, deposit, benefits, FX margin and offboarding. Ask how the provider complies with the worker-transfer rules. Use the estimator to sanity-check totals.

4. 4

   Sign the service agreement

   Review liability for dismissal costs, IP assignment, data protection (GDPR) and the provider's Spanish employment structure.

5. 5

   Contract and onboarding documents2–7 days

   The EOR issues a Spanish contract and registers it with SEPE. The employee provides their NIE/DNI, Social Security number (NUSS) and bank details.

6. 6

   Social Security registration before day one

   The EOR registers the employee with the Seguridad Social (alta) before the start date and sets up time recording.

7. 7

   Payroll and ongoing administrationMonthly

   Monthly payroll with IRPF withholding and social security. The EOR pays the extra payments, files quarterly and annual tax returns, and keeps time records.

Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.

1. 1
   Bases y tipos de cotización 2026 (Régimen General)

   Seguridad Social

   Official 2026 contribution rates and the minimum and maximum contribution bases.

2. 2
   Seguridad Social: employer obligations and benefits

   Seguridad Social

   Employer registration, employee registration (alta) and sickness, birth and childcare benefits.

3. 3
   Workers' Statute (Estatuto de los Trabajadores), consolidated text

   Boletín Oficial del Estado (BOE)

   Contracts, probation, working time, extra payments, leave, worker transfer (Art. 43) and dismissal.

4. 4
   Real Decreto 126/2026: minimum wage (SMI) for 2026

   Boletín Oficial del Estado (BOE)

   Sets the 2026 minimum wage at €1,221 a month in 14 payments (€17,094 a year).

5. 5
   Contratos de trabajo (employment contracts)

   Servicio Público de Empleo Estatal (SEPE)

   Contract types and the registration of employment contracts.

6. 6
   Income tax withholding (IRPF) for employers

   Agencia Tributaria

   Withholding calculation and employer tax filings.

7. 7
   Collective agreements and labour regulations

   Ministerio de Trabajo y Economía Social

   Labour regulation updates and collective agreement information.

An Employer of Record is the quickest way to hire in Spain without forming a company. Plan for an all-in cost of roughly 1.45–1.5× gross salary for mid-level roles, falling to about 1.3× for senior salaries as the contribution ceiling applies.

Spain's rules on worker transfer make provider structure an important question, so get a clear written answer on how each provider employs in Spain. Also confirm the collective agreement and how dismissal costs are handled.

For long-term teams of three to five or more, compare the numbers against setting up an S.L. using our EOR vs local entity guide.