Offering compliant, comprehensive benefits is critical for securing top talent and maximizing your chances of success as you enter the Spanish market.
Global companies operating in Spain often struggle to navigate the country’s complex federal benefits regulations while complying with various collective bargaining agreements at federal, national, and regional levels. Fortunately, administering benefits to a distributed workforce in Spain doesn’t have to be complicated.
This guide explains statutory employee benefits in Spain. In it, you’ll find a detailed outline of federal requirements, a list of common supplemental benefits, and tips on navigating CBA provisions as you build a Spanish workforce.
What are the employee benefits in Spain?
Statutory employee benefits in Spain include social security (INSS), workers’ compensation, leave entitlements, statutory holidays, and 13th- and 14th-month pay. INSS comprises various funds, such as healthcare, unemployment, and retirement, while other federal and collective agreements account for workplace injury insurance, annual leave, and bonus entitlements.
While federal laws regulate benefits entitlements nationwide, collective bargaining agreements (CBAs) and employment contracts in Spain can stipulate extra provisions on top of federal minimums. For instance, CBAs can mandate additional paid leave and regulate when and how an employer distributes annual bonuses.
Statutory employee benefits in Spain
As previously mentioned, statutory employee benefits in Spain include the INSS fund, workers’ compensation, leave entitlements, public holidays, and annual bonuses. Below, we examine each of these benefits programs in more detail.
Social security (INSS)
Spain’s social security fund, or Instituto Nacional de la Seguridad Social (INSS), comprises multiple funds that provide coverage for various life events, such as illness, retirement, unemployment, disability, maternity, and adoption.
We provide a full list of INSS benefits below:
- Healthcare. Employees in Spain can access the public healthcare system, which includes standard and special care, such as treatment for minors suffering from cancer or other serious diseases.
- Unemployment. INSS provides income support for individuals who are unemployed but willing to work.
- Retirement. Individuals who reach the retirement age of 66 or qualify for early retirement can draw a pension from the INSS.
- Temporary disability. This fund offers financial support for individuals who experience work- and nonwork-related injuries or illnesses that temporarily prevent them from working.
- Permanent disability. Under INSS, any individual who experiences a work- or nonwork-related disability that prevents them from working long-term can receive income support.
- Survivor insurance. INSS provides income support for deceased employees’ dependents, including spouses and children.
- Family benefits. INSS offers financial support for various family-related life events, including maternity and paternity leave, coverage for risks during pregnancy and breastfeeding, and indemnities for multiple births and adoptions.
- Foster care. INSS also provides financial benefits for children and minors in foster care.
- Wage guarantee. As a part of INSS, the Fondo de Garantía Salarial (FOGASA) protects employees from financial losses due to employer cutbacks or insolvency.
- Professional training. This fund supports skills development programs aimed at reducing unemployment and aligning training initiatives with production demands across the country.
Total INSS contributions are 36.95% on a €1,323 (US$1,446) minimum and €4,720.50 (US$5,159) maximum monthly earnings base. Employers contribute 30.48%, and employees pay 6.47%.
Workers’ compensation
Depending on the CBA provisions that apply to your industry in Spain, additional workers’ compensation coverage may be mandatory.
This insurance is called collective agreement accident insurance (seguro de accidentes de convenios colectivos). It provides healthcare and income replacement for individuals who suffer from on-the-job accidents and illnesses that prevent them from working.
For instance, a national-level CBA requires all employers in Spain operating in the construction industry to offer collective agreement accident insurance. Companies that don’t comply with this mandate can face fines up to €187,000 (US$202,426).
Learn more about payroll taxes and contributions in Spain.
Leave entitlements in Spain
All global companies hiring talent in Spain must offer minimum paid leave entitlements to their Spanish workforce. These include vacation, sick, maternity, and paternity leave.
We outline Spain’s statutory leave entitlements below:
- Annual leave. Employees receive 23 days of paid annual leave, although CBA provisions in some industries may provide additional days and stipulations.
- Sick leave. Employees can take up to 18 months of paid sick leave. Employees receive no pay for the first three days of illness, 60% pay from the fourth to the 20th day, and 75% from day 20 onward.
- Maternity leave. Mothers receive 16 weeks of paid maternity leave for the birth or adoption of a child. They receive two additional weeks of paid leave per child for multiple births and babies born with disabilities.
- Paternity leave. Fathers of newborn or adopted children in Spain also receive 16 weeks of paid paternity leave. The Spanish government officially calls this “partner leave.”
Statutory holidays in Spain
In addition to paid time off, employees in Spain also receive approximately 14 paid annual public holidays, depending on their region.
All employees nationwide enjoy the following fixed national holidays:
- New Year’s Day (Año Nuevo)
- Good Friday (Viernes Santo)
- Labor Day (Día del Trabajo)
- Assumption of Mary (Asunción de la Virgen)
- Spain’s National Day (Fiesta Nacional de España)
- All Saints’ Day (Fiesta de Todos los Santos)
- Spanish Constitution Day (Día de la Constitución)
- Immaculate Conception (La Inmaculada Concepción)
- Christmas (Navidad)
Additional holidays vary between provinces and regions and can include Shrove Tuesday (Martes de Carnaval), St. Joseph’s Day (Fallas de San José), and San Isidro, among others. Each municipality can observe up to 14 public holidays annually.
Is 13th-month pay mandatory in Spain?
Yes, 13th- and 14th-month pay is mandatory in Spain. All employers in Spain must offer their employees two annual bonuses called 13th- and 14th-month pay. Each bonus is equivalent to an additional month’s salary and is subject to income tax like regular earnings.
Employers account for the additional payments in one of two ways. They divide the employee’s annual salary into 14 installments, making one extra payment in the summer and one in the winter. Or, they prorate the bonuses into the employee’s 12 annual monthly salary payments.
Employment contracts and CBAs also may stipulate when and how employers should distribute 13th- and 14th-month pay.
Learn more in our guide to 13th-month pay.
Supplemental employee benefits in Spain
Spain’s statutory benefits offer employees excellent coverage compared to many countries worldwide. Still, Spanish employers usually provide supplemental benefits to fill remaining gaps and ensure their employees have the rewards they need to thrive.
Offering supplemental benefits ensures employees have peace of mind and aren’t left worrying about overlooked stressors or unforeseen life events. By guaranteeing comprehensive coverage, your workforce becomes more engaged, productive, and loyal.
Common supplemental employee benefits in Spain include private medical, sickness, and retirement insurance, plus additional paid time off and employee perks. We discuss each of these in detail below.
Download our essential global employee benefits guide to learn how to offer compliant, competitive benefits packages to talent in Spain and 185+ countries.
Supplemental medical coverage
Supplemental medical insurance guarantees your employees comprehensive coverage for all their healthcare needs, such as vision, dental, disability, and long-term care. Spanish employers offer these plans in addition to statutory minimums and often extend them to include dependents and partners.
Supplemental short-term sickness benefits
Sick leave policies in Spain guarantee employees 60% to 75% of their standard wages, depending on their length of absence. By offering supplemental short-term sickness benefits, organizations can fill in this income gap and ensure employees are 100% financially covered if they fall ill and have to take time off work.
Supplemental retirement plans
Pretax pension rates in Spain are more than 81% of gross annual earnings—one of the highest in the EU. As a result, Spanish employers rarely offer additional retirement benefits to their employees. Still, some organizations invest in supplemental pension plans to fill gaps and ensure their workforce can meet their financial needs in retirement.
Large international companies dominate the market for occupational retirement plans in Spain. These programs are usually employer-funded, but employees can also contribute. Employer contributions cannot exceed €8,000 ($US8,661), and up to €8,000 of annual employer and employee contributions are tax-deductible.
Additional paid time off
Federal employment regulations in Spain guarantee substantial paid time off. Still, some companies boost their employees’ annual paid leave entitlements with several extra days to help them improve their work-life balance, handle occasional responsibilities outside work, and manage unexpected events.
This may include casual, marriage, bereavement, and voting leave or additional vacation days. If you offer your employees additional paid leave, be sure your offering complies with federal and local regulations and applicable CBA provisions.
Additional supplemental perks
Any well-rounded global benefits offering should include supplemental employee perks. These small, impactful rewards often include nonwage fringe benefits like company cars, gym memberships, or remote work stipends.
They help overcome the often-overlooked challenges of maintaining a healthy work-life balance and communicate to your team that you are fully invested in their well-being.
Spanish employers often provide their employees with the following perks:
- Health and wellness funds
- Housing allowances
- Gas (petrol) allowances
- Public transportation passes
- Meal and entertainment vouchers
- Educational reimbursement
- Child care reimbursement
- Professional training programs
Understanding CBA compliance for employee benefits in Spain
CBAs are agreements between labor unions and governments, employers’ associations, or individual companies that regulate wages and working conditions in various sectors. They usually provide additional requirements on top of federal minimums.
CBAs in Spain exist at the national, provincial, and regional levels and can apply to individual companies or entire industries. Where a provincial or regional agreement doesn’t exist, the national agreement applies. They cover most employees across the country.
For instance, while Spain’s national minimum wage is €1,134 (US$1,227) per month, CBA provisions mandate higher minimum wages in select industries, such as construction and forestry. If a company unknowingly overlooks this requirement, it will face serious noncompliance penalties, including fines, back wages, and litigation.
Global employers operating in Spain must have detailed knowledge of the CBAs impacting their industry. Be sure to enlist an experienced HR team equipped with the necessary resources to navigate Spain’s complex network of CBA provisions and ensure ongoing compliance.
Better yet, consider partnering with a global expansion expert, such as an employer of record (EOR), to handle benefits administration and mitigate risk on your behalf.
Offer compliant and competitive employee benefits in Spain
Navigating federal and local benefits requirements and CBA provisions can be overwhelming as you build a Spanish workforce. Streamline benefits administration in Spain by partnering with Velocity Global.
Available as an add-on to our core EOR solution, our Global Benefits solution makes it easy for companies of all sizes to offer compliant benefits to teams in over 185 countries, including Spain.
Our diversified solution eliminates the burdens of administration and governance, allowing you to deliver consistent, affordable, and comprehensive coverage to your Spanish workforce without the added headache.
We use our own economies of scale to offer competitive pricing on world-class supplemental benefits to companies of all sizes. Plus, our team of in-country experts ensures compliance while crafting market-specific plans that provide the coverage and perks that top Spanish talent desires.
Comprehensive benefits aren’t just a perk; they’re an investment in your employees’ well-being and your company’s future. Contact Velocity Global today to learn how we can help you create a benefits strategy that will transform your workplace and fuel your success in Spain and beyond.
Disclaimer: The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. © 2024 Velocity Global, LLC. All rights reserved.
