Overview

Capital
Madrid
Currency
Euro (€) (EUR)
Date Format
dd/mm/yyyy (ce)

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Taxes

Employer
29.90% - Social Security
Employee
19.00% - 0-12,450
24.00% - 12,451-20,200
30.00% - 20,201-35,200
37.00% - 35,201-60,000
45.00% - 60,000 and above

Minimum Wage

General

Minimum wage is 1,050 EUR per month if the employer pays the employee in 12 installments.  

If the employer pays the employee in 14 installments, the minimum wage is 900 EUR per month.  

Working Hours

General

Fulltime employment is considered 40 hours weekly, and 9 daily hours (maximum unless agreed otherwise). *Workers are entitled to a weekly rest period of 1.5 consecutive days.

Overtime

Overtime may not exceed 80 hours annually.

VAT

General

21% standard rate.

Mandatory Benefits

Pension Fund

Pension contributions are made by:

  • Employer – 23.6%
  • Employee – 4.7%

Pension begins at age 65 after an employee leaves work activity. In order to receive benefits, they must have contributed to social security for at least 15 years, of which 2 have been in the last 15 years before retirement.

Social Security

Employers contribute 29.9% and employees contribute 6.35%.

Payroll

Payroll Frequency

Employees are paid on a monthly basis.  It is common to pay employees in 14 installments; however, this is not mandatory.  If the employer chooses to pay the employee in 14 installments, this is paid out in July and December. 

Pay Date

Employees are paid on the last day of the month.

Working Hours

Fulltime employment is considered 40 hours weekly, and 9 daily hours (maximum unless agreed otherwise).

Overtime Payment

Employees are not allowed to work more than 80 overtime hours annually.

Overtime is either compensated with rest hours or additional pay. Rest time should be equal to the hours worked and payment should be a 75% surcharge on the value of ordinary hours worked.

Termination

Termination Process

Employees dismissed on disciplinary grounds are not required to receive notice of dismissal. In cases of redundancy, dismissal can be on grounds of economic, organizational, technical or productive reasons. Termination notice must be provided in writing, and the notice period is agreed upon in employment contract. In addition, depending on the length and type of employee, the termination process may vary.  

Advance Notice

Employers should provide 15 days of notice, and if notice isn’t given, payment in lieu shall be given.

Severance Pay

Employers should pay 20 days of salary pay per year of service up to 12 months. If the dismissal is declared unfair (a dismissal without cause) by a judge, the employer may reinstate the employee or pay a statutory severance payment. Employees affected by a redundancy will be entitled to receive a legal severance payment and an advance notice in writing of the termination of the contract. A worker who is dismissed for disciplinary reasons is not entitled to severance pay.