Employer of Record guide for Spain: Contracts, payroll, and compliance in 2026

Hiring in Spain is rarely complicated because of the employment contract itself. The complexity sits in everything around it: collective agreements, Social Security registration, payroll withholding, contract formalities, immigration requirements, and dismissal rules that can materially affect cost and compliance. A single hire can trigger obligations under the Workers’ Statute and sector-specific rules that many foreign employers have never had to navigate before.

Spain also applies close scrutiny to worker-assignment structures and employment classification, making it important to understand who carries employer obligations in practice and how payroll, contracts, and statutory filings are managed. For foreign employers, hiring successfully in Spain often depends less on finding talent and more on structuring the employment relationship correctly from the outset.

Under this model, a locally registered company becomes the legal employer on paper, while the client company directs day-to-day work and keeps strategic control over the role. The person engaged this way is a regular Spanish employee for legal purposes, not a separate category, and enjoys full protection under the Workers’ Statute and the applicable collective agreement. The formal employer obligations and the client’s retained responsibilities fall into two distinct columns.

The licensed local employer typically handles:

• Employer registration and Social Security affiliation with the Tesorería General de la Seguridad Social (TGSS), including contribution account codes and ongoing filings.
• Payroll calculation and withholding, applying IRPF income-tax withholding, and employee Social Security contributions to arrive at net pay.
• Employer Social Security contributions under the General Scheme, covering common contingencies, unemployment, FOGASA, vocational training, work-accident premiums, and the Intergenerational Equity Mechanism (MEI).
• Contract drafting and filing in Spanish, compliant with the Workers’ Statute and the relevant convenio, communicated to public employment services within statutory deadlines.
• Time, leave, benefits, and inspection response, tracking working time, statutory leave, and mandatory records.

The client company keeps recruitment and selection, role definition and performance management, internal policies and intellectual property, and strategic decisions on promotions, pay changes, and termination strategy. Those decisions are made by the client but implemented through the local employer under Spanish law. This is where understanding how compliance works in an engaged-employer structure saves later friction: the day-to-day management is yours, the statutory employer duties are not.

In Spain, collective agreements sit above statutory minimums and often carry as much practical weight as the Workers’ Statute itself, particularly for office, retail, and industrial roles. A convenio can define salary scales, working time, overtime premiums, leave above the statutory floor, and procedural rules for specific contract types. Getting the convenio wrong is not a cosmetic error: misalignment can trigger underpayment claims, back pay, and Social Security adjustments.

Common areas governed by convenios include fixed base salaries by category and seniority, allowances such as transport and lunch, the structure of 13th and 14th month payments, weekly hours (usually around 40), overtime limits, annual leave (often beyond the statutory minimum of 30 calendar days equivalent), and probation lengths within the legal maximums.

Identifying the correct convenio follows a repeatable path:

1. Determine the economic activity (CNAE code): Convenios are often linked to CNAE groupings such as offices and professional services, trade, or hospitality.
2. Check the territorial scope: Some agreements are nationwide, others apply per autonomous community or province, so the work location matters.
3. Check for a company-specific convenio: Larger employers and some local entities register company-level agreements with the Ministry of Labour or regional authorities.
4. Reference the convenio in the Social Security registration and the contract: TGSS has required the collective agreement to be indicated in affiliation records since July 2015, and the contract should name it.

A practical due-diligence step for HR leaders is to request the mapping of job families to convenios and pay groups, then cross-check it against the official text published in the BOE or regional bulletins.

Before a first payroll run, several identifiers and registrations have to be in place. For foreign workers, the paperwork gates the start date more than any other single factor.

• NIF (Número de Identificación Fiscal): The tax identification number. Spanish nationals use their DNI as their NIF; foreigners use an NIE that also functions as their tax ID.
• NIE (Número de Identificación de Extranjero): A unique number assigned to foreigners, required for employment registration and Social Security affiliation.
• Social Security number (NUSS / Número de Afiliación): Required to contribute and access public healthcare and benefits. Government guidance is explicit that employees must have a social security number before they can be registered as workers.
• Código de Cuenta de Cotización (CCC): The employer’s contribution account code. When engaging talent through a licensed local employer, that entity’s CCC is already in place, so the client does not need its own.

The written contract must, at minimum, cover the parties’ identities, job title and category per convenio, place of work and any telework arrangement, working hours, gross salary structure (monthly base plus prorated 13th and 14th month payments and allowances), probation period if any, contract type, and the applicable collective agreement. Article 8 of the Workers’ Statute requires written form for specific contracts, and in cross-border arrangements almost all contracts are documented in writing.

Contracts also have to be communicated to the Public Employment Services. Regional guidance confirms that contracts must be communicated within ten working days of signature, regardless of whether written form is otherwise mandatory. The national Contrat@ platform lets authorised representatives submit contract data, extensions, and fixed-discontinuous call-ups electronically, which is how an outsourced provider files on the client’s behalf.

The path below assumes the local employer is already registered and the worker is either an EU citizen or a non-EU national with a suitable permit in process. For EU citizens with an existing NIE and NUSS, this can move in days; a non-EU work permit typically stretches the timeline to several months.

1. Define the role and benchmark salary (1–2 weeks): Set the level and approximate gross salary against Spanish market data and the convenio pay tables, and confirm the figure clears convenio minimums and any immigration salary threshold.
2. Issue the offer and start onboarding (about 1 week): The client sends a conditional offer, and the local employer collects personal data, bank details, and family status for IRPF, then checks the NIE/NIF and initiates NUSS assignment if needed.
3. Draft and sign the contract (1–2 weeks): The Spanish contract references the correct convenio, contract type, probation, salary, and benefits, and the employee signs.
4. Complete immigration if applicable (1–3 months): For non-EU nationals, the employer applies for the work permit, the employee collects a visa from the consulate, and on arrival, registers fingerprints to receive the TIE residence card.
5. Register with Social Security and communicate the contract (within 10 days of start): The employer files the alta with the CCC, NUSS, contract type, contribution group, and convenio, and submits the contract via Contrat@ within ten working days of signature.
6. Run the first payroll (end of the first month): The employer calculates payroll on gross salary plus prorated extra payments, applies IRPF and employee Social Security contributions, pays net wages, and remits withholdings and contributions to TGSS and the tax authorities in the month following accrual.

Registration must occur before work starts, and the obligation to contribute begins when work commences and continues throughout the relationship, including probation and certain protected leaves.

Spanish Social Security contributions are calculated on the contribution base, essentially monthly remuneration plus proportional extras, subject to minimum and maximum limits. For 2026, the General Scheme sets a minimum monthly base of 1,424.40 euros for most groups and a maximum monthly contribution base of 5,101.20 euros. Remuneration above that ceiling is subject to a separate solidarity contribution rather than regular contributions. Employer Social Security costs typically land at roughly 30 to 36 percent of the contribution base, depending on the accident-insurance classification and any applicable reductions.

The table below sets out the main General Scheme rates for 2026 under the 2026 contribution order (Orden PJC/297/2026).

Employees also pay personal income tax (IRPF) through payroll withholding. There is no single national rate; the applicable percentage depends on income level, family situation, and region, calculated from tax-agency tables and remitted monthly or quarterly. Boundless keeps a running breakdown of Spanish payroll taxes for teams modelling total cost.

Beyond gross salary and statutory contributions, a workforce-management or EOR provider charges a service fee, commonly a flat 400 to 700 EUR or USD per employee per month, or alternatively a percentage of gross salary in the region of 3 to 10 percent. Onboarding charges, termination administration fees, and surcharges for optional benefits such as private health insurance can apply in addition. Because contribution orders and reforms are published annually, any cost model should be refreshed each year rather than treated as fixed.

Spanish labour reform has narrowed the use of temporary contracts, making the indefinite contract the default for ongoing roles. Providers generally favour indefinite contracts for engaged hires, both to avoid misusing temporaries and to simplify termination-cost modelling. The Workers’ Statute recognises four main categories.

Probation (periodo de prueba) is governed by Article 14 and capped unless the convenio sets shorter periods.

Probation agreements must be in writing, and a new probation period is null if the worker has previously performed the same functions for the company under any contract. During probation, either party may terminate without notice or severance, while the worker keeps ordinary rights to pay and working conditions. Fixed-discontinuous contracts matter for tourism, agriculture, and education services: they create a permanent relationship with intermittent activity, and the applicable convenio governs call-up order, seniority, and rights during inactive periods.

Three edge cases account for most of the compliance exposure in Spain: