Payroll guide for Spain: IRPF, social security, and employer obligations in 2026

Hiring in Spain becomes considerably more complex once payroll begins. A foreign employer accustomed to a single tax deduction quickly encounters individualised IRPF withholding, multiple Social Security contributions, statutory extra salary payments, collective-agreement rules, and filing obligations spread across different authorities. A small configuration error can affect payroll costs and compliance every month.

Spanish payroll is also highly localised. Contribution rates, minimum bases, overtime treatment, salary structures, and even whether employees receive 12 or 14 annual payments can depend on the applicable collective agreement and employment circumstances. Payroll in Spain is therefore less about translating a home-country process and more about configuring the local rules correctly from the outset.

Registration with both the tax authorities and Social Security, current contribution rates, and the correct collective agreement for the role sit at the centre of getting payroll right in 2026.

Under Article 29 of the Estatuto de los Trabajadores, salary must be liquidated and paid punctually on the agreed date and place, and the period to which regular periodic pay refers may never exceed one month. The same article requires salary to be documented through an individual receipt, the payslip, adjusted to the official model, unless a collective agreement uses another model that clearly separates earnings and deductions. In practice, most employees are paid monthly, with payroll processed at month-end and paid by bank transfer.

The feature that catches foreign employers is the pagas extraordinarias. Article 31 grants employees a right to two extraordinary payments per year, one at Christmas and the other in a month fixed by collective agreement, typically June or July. These are statutory pay elements, not discretionary bonuses. The agreement may set their amount and may permit them to be prorated across the twelve monthly salaries instead of being paid twice a year.

Whether an employer runs 12 or 14 payments depends entirely on that agreement:

• If prorrateo is permitted, the two annual gratifications are divided by twelve and added as a pro-rated concept to each monthly payslip. The employee receives a higher monthly gross and no separate June and December payments.
• If prorrateo is not permitted, the default is 14 payments: 12 ordinary monthly salaries plus two extras, each typically equivalent to one month of base salary or at least 30 days of the base or SMI.

Where the agreement prohibits prorrateo, Spanish Supreme Court case law has held that labelling monthly pay as pagas extraordinarias does not extinguish the obligation to pay the extras at their accrual dates, so a company that prorates against the agreement must still pay the June and December bonuses and may face claims. Either way, the extras count as salary for both social security and IRPF, and the contribution base includes the proportional part of extraordinary payments.

Spanish payroll follows a standard build: gross salary, including base salary, supplements, overtime, and prorated extras, minus employee social security contributions and IRPF withholding, yields net pay. The payslip separates devengos (accrued earnings) from deducciones (deductions) so a worker can verify the computation and an employer can evidence compliance.

Employee social security contributions come off first. Seguridad Social defines the contribution basis as the monthly remuneration the worker is entitled to or receives, whichever is higher, plus the proportional part of extraordinary payments. For 2026, the bases and rates are governed by Order PJC/297/2026 of 30 March 2026 and Royal Decree-Law 3/2026, which set a general maximum contribution base of 5,101.20 euros per month and a minimum base linked to the statutory minimum wage increased by one sixth, with a floor of 1,424.40 euros.

The employee-side items for a standard general-regime employee in 2026 sit in the table below:

The key point is that Spanish social-security costs extend beyond the headline employer and employee rates. In addition to common contingencies, the Intergenerational Equity Mechanism (MEI) and the solidarity contribution increase costs for higher earners. The solidarity contribution applies only to salaries above the maximum contribution base and does not generate additional pension rights. Employers are responsible for withholding the employee portion and remitting both employer and employee contributions to Seguridad Social in the following month.

Employer contributions in Spain are the larger half of the bill. For general-regime employees, the standard employer rate on the contribution base is around 30.65%, combining common contingencies at 23.60%, unemployment at 5.50%, occupational training at 0.60%, FOGASA at 0.20%, MEI at 0.75%, and an occupational accident and disease contribution set by activity classification.

Those accident and disease rates vary with the economic activity classification (CNAE-2025) and are detailed in a table attached to Royal Legislative Decree 8/2015 as updated by Royal Decree-Law 3/2026. Office-based work typically sits in a low-risk band; construction and manufacturing carry higher percentages. Once the solidarity contribution on high salaries is added, combined employer-plus-employee contributions can reach an effective burden around 37 to 42% of gross for high bases.

Applying the employer rates above to the same 80,000 euro salary, with contributions capped at 5,101.20 € plus solidarity and accident rates on the excess, points to an employer social security cost of roughly 1,640 to 1,700 € per month for a low-risk occupation, around 30 to 32% of the monthly gross. Employers should model the actual figure using their precise CNAE accident rate and the solidarity tables, because the assigned code drives the number, and a wrong code can attract the highest applicable rate. Running a total employment cost estimate before signing the contract keeps that on-top burden from surprising the budget.

Before the first hire, an employer registers with both Seguridad Social and Agencia Tributaria. For social security, the employer obtains a Código de Cuenta de Cotización (CCC), which appears in the payslip header, and registers each employee in the general regime with their affiliation number. The obligation to pay contributions begins when work starts and runs through temporary disability, maternity and paternity leave, and trial periods, ending when employment terminates, and the termination is reported within three calendar days. For tax, the employer registers as a withholding agent, obtains a NIF, and files periodic and annual IRPF returns.

Two forms carry the IRPF reporting load, and their deadlines follow the AEAT tax calendar:

• Modelo 111 reports and pays withholdings on salaries, filed monthly or quarterly by employer size. Monthly filers submit electronically within the first twenty calendar days of each month for the preceding month, with direct-debit submissions between the 1st and 15th. Quarterly deadlines fall around 20 April, 20 July, 20 October, and 30 January, shifting to the next working day when they land on a weekend or holiday.
• Modelo 190 is the annual summary that aggregates the Modelo 111 data. It is filed between 1 January and 2 February 2026 for the 2025 tax year.

Social security contributions run on a separate cycle. They are paid in the month following accrual, based on assessed contribution documents submitted electronically through the RED system, with payment by electronic receipt or direct debit. Late payment triggers surcharges of 20% or 35%, depending on whether the contribution documents were filed on time, plus interest, so the calendar discipline matters as much as the calculation.

Article 29 requires the salary to be documented through an individual receipt conforming to the official model approved by the Ministry, unless a collective or company agreement uses another model that clearly separates concepts and deductions. A Ministerial Order of 27 December 1994 updated that official model to require inclusion of employer social security payments and to specify the contribution bases and the IRPF withholding base.

The official template has three sections: header, body, and footer.

• Header: Company name, address, tax ID (CIF), the social security CCC, the employee’s name, identification and social security number, professional category, contribution group (grupo de cotización), and seniority date.
• Body: Split into devengos and deducciones. Devengos cover salary perceptions (base salary, supplements, overtime, gratificaciones extraordinarias, salary in kind) and non-salary perceptions (reimbursements, indemnities, benefits). Deducciones cover employee social security contributions by contingency, the IRPF amount, and other authorised deductions. The net (líquido total a percibir) is total devengado minus total a deducir.
• Footer: Sets the bases, including common contingencies, occupational contingencies, and joint-collection items, the overtime base, and the base sujeta a retención for IRPF.

The receipt must be delivered to the worker and may be issued on paper or electronically, provided the system is reliable, accessible, and lets the employee keep a copy. Collective agreements may impose longer retention or stricter delivery rules.

Several pay elements sit above the raw calculation and are common sources of underpayment. Spain sets a national minimum wage (Salario Mínimo Interprofesional, SMI) annually by Royal Decree. For 2026, commentary points to an SMI of around 1,184 euros per month across 12 payments, though the confirmed figure depends on the SMI decree, and the general minimum contribution base floor is set at 1,424.40 euros. Collective agreements often set higher category minimums that act as binding floors above the statutory SMI.

Overtime, holiday, and sick pay each carry their own rules:

• Overtime: Articles 34 and 35 govern working time and overtime. Overtime is generally voluntary unless the agreement or contract requires it, and must be compensated by pay at least equal to the ordinary rate or by equivalent rest. Social security adds a contribution on overtime remuneration: 14% total (12% employer, 2% employee) for force-majeure overtime and 28.30% total (23.60% employer, 4.70% employee) for other overtime.
• Holiday pay: Employees are entitled to at least 30 calendar days of paid annual leave, paid at normal or average remuneration, including fixed supplements. Replacing vacation with cash is generally unlawful, and foreign employers often underpay by applying home-country rules.
• Sick pay: Temporary incapacity benefits are administered primarily by Social Security, sometimes topped up by employer obligations under law or collective agreement. Contributions continue during incapacity, and the employer may act as delegated payer of benefits to be compensated later.

Underpinning all of this is the daily time record. Since the Real Decreto-ley 8/2019 reform, Article 34.9 requires employers to maintain a daily record of each employee’s start and end times, with overtime recorded separately and summarised to the worker with the payslip. The record must be kept for four years and stay available to workers, their representatives, and the Labour Inspectorate. In the absence of proper records, courts have at times presumed full-time work or accepted credible overtime claims, though recent Supreme Court decisions clarify that where a fixed schedule exists, a worker must still provide some evidence of overtime.