Spain Country Guide 2023
Spain is a country in Southwestern Europe, mostly situated in the Iberian Peninsula; it is the second largest country in the EU, and Spanish is the second most spoken language in the world. It has a wide diversity of climate, geographical landmarks and flora/fauna.
Spain has a very high quality of life, and the population is easygoing and very friendly to both locals and foreigners alike.
While the Spanish economy may not yet be fully recovered after the 2020 pandemic, there have already been steady increases in registered foreign workers, and the cost of living is one of the lowest in Europe all around.
- Capital: Madrid
- Spoken Languages: Spanish (94% of total population), Catalan, Galician, Basque and Aranese
- Currency: Euro (EUR)
- Minimum monthly wage: EUR 1,166.66 (Gross)
Citizens of EU/EFTA Member States and Switzerland can enter Spain with an identity card or a valid passport.
Work Permit / Residence Permit
Citizens of EU/EFTA Member States and Switzerland can live and work without a work or residence permit in Spain. They can stay in the country without registering with the authorities for 3 months.
Other foreign nationals must obtain work and residence permits, for which they must apply at the Spanish Embassy or Consulate in their home country – it is not possible for a foreign national to obtain a work visa while located in Spain. These documents are required for them to enter the country. The work permit is initially granted for one year, but is renewable.
In order to be able to apply for such permits, the employer must first obtain a work authorization from the Ministry of Labour.. This permit will be granted if the job falls within the activities listed in the Shortage Occupations List, or if the employer has not been able to find a candidate with suitable qualifications for the job.
Social Security Registration
Citizens of EU/EFTA Member States and Switzerland will need to register at the local municipal office where they reside, and obtain a tax number and a Social Security number within 3 months of entering the country.
Other foreign nationals must get an Aliens Identification card (TIE) at the police department in their area of residence if they are intending to reside for over 6 months. Registration with the Social Security system is done by the employer.
Spain has a unique cultural practice of a double paycheck in summer (July/August) and winter (December); due to this, annual salary is received in 14 payments rather than 12. It is standard practice and is negotiated when signing the employment contract.
This means that the minimal monthly salary of €1,000 actually amounts to €1,166.66 per month if calculated on a basis of 12 payments per annum rather than Spain’s default 14.
A standard working week in Spain is 40 hours.
Any overtime must be negotiated in the employment contract prior to commencement, and rate of pay agreed in advance (alternatively, overtime hours may be substituted for time off). The maximum legal overtime hours allowed is 80 per year.
- 01 January: New Year’s Day (Año Nuevo)
- Good Friday (Viernes Santo), not a standard date.
- 01 May: Labor Day (also referred to as Worker’s Day) (Día del Trabajo)
- 15 August: Assumption of Mary (Asunción de la Virgen)
- 12 October: Spain’s National Day (also referred to as Columbus Day)
- 01 November: All Saints’ Day (Fiesta de Todos los Santos)
- 6 December: Spanish Constitution Day (Día de la Constitución)
- 8 December: Immaculate Conception (La Inmaculada Concepción)
- 25 December: Christmas (Navidad)
- 26 December: Boxing Day
Occasionally, if a holiday falls on a weekend, in will be replaced by an alternative day (usually Monday).
In addition to standard public holidays, each autonomous province has certain regional holidays that may also be celebrated with a day off.
The minimum number of vacation days per year is 22 working days (30 calendar days) for a regular employment. These days can be taken all at once or in parts, however, at least one leave per year must be 2 weeks long. Holiday leave cannot be replaced by monetary compensation.
There is no official “sick days”, however, an employee may apply for an allowance of temporary incapacity due to common illness or a non work-related injury, provided 3 days have passed and a medical examination was provided by the State Health Services.
From the 4th to the 20th day the employee will receive 60% of their salary (10 days paid by the employer, 5 by social security), and from the 21st day the allowance is increased to 75%. The allowance may be received for up to 365 days.
Maternity / Paternity leave
- Maternity: 16 weeks for single birth, 18 for twins, 20 for triplets, and an additional 2 weeks for children with disabilities.
- Paternity: 5 weeks.
Termination & Severance
Fair dismissal: 20 day’s pay for each year of service, up to a maximum of 12 month’s pay.
Unfair dismissal: Provided the employee’s contract was open-ended, 33 day’s pay for each year of service, up to a maximum of 24 month’s pay.
The minimum notice for both employer and employee is 15 days. However, this my be extended by the employment contract.
Employee social security contributions are deducted automatically from the wage. Employer contributions are not deducted from the employee’s wage, but paid by the employers themselves.
The contributions are paid by the employer monthly.
|Employer Contribution (%)||Employee Contribution (%)||Total (%)|
Pensions in Spain are funded by social security contributions, and are taxable at progressive rates between 8-40%. Pension rates are calculated depending on the employee’s salary, and the number of years they have worked and made contributions in Spain. The minimum requirement is 15 years, and entitles the employee to 50% of the maximum payout; this percentage rises for every additional year worked and reaches 100% for 37 total years of work.
Pre-tax pension rates for a full pension in Spain are over 81% of gross annual salary; more than any other country in Europe.
Taxation in Spain
The Spanish fiscal year runs from January 1 to December 31.
The following progressive rates apply for 2022.
Each region may set its own rates for the Regional Tax, so the total may be slightly different.
|Taxable Income (EUR)||State Tax (%)||Regional Tax (%)||Total Tax (%)|
|Up to 12,450||9.50||9.50||19.00|
|12,451 – 20,200||12.00||12.00||24.00|
|12,201 – 35,200||15.00||15.00||30.00|
|35,201 – 60,000||18.50||18.50||37.00|
|60,001 – 300,000||22.50||22.50||45.00|
The annual income tax return is filed between 2 May and 30 June for the previous tax year.
This return must be filed provided the individual’s yearly gross salary exceeds 22,000 EUR.
Spain has international double taxation agreements with over 80 other countries, which can reduce payable tax on certain incomes, or alleviate the need to pay tax on the same income in both countries.
Health insurance in Spain is covered by the social security payments made by all employees and self-employed workers. Some employers may provide extra private health care as incentives.
Cost of Living
The cost of living in Spain is one of the lowest in Western Europe. The estimated monthly cost for a single person is just under 1,500 euros, with around 600-800 going to rent.
How We Can Help
We provide a full set of services in Spain allowing corporate clients, recruitment agencies and professional contractors to operate in an optimal manner while ensuring that all local employment obligations are taken care of.
Access Financial offers the following solution in Spain:
- Self-Employed Solution
If you would like to discuss how Access Finacial can help, please contact us.
WE HAVE PREPARED THIS AS A GUIDE ONLY; IT DOES NOT FORM PART OF AN OFFER. PLEASE REQUEST ILLUSTRATIONS BASED ON YOUR SPECIFIC CASE FROM ONE OF OUR SOLUTION MANAGERS.