Spain PEO Employment Services

Velocity Global’s Spain PEO (Professional Employer Organization) solution delivers an expedited and simplified expansion without first establishing a legal foreign an entity. With accelerated employee onboarding and a proven, agile expansion solution, International PEO compliantly establishes your presence in Spain faster than any other global expansion method available.

With International PEO, Velocity Global becomes your Employer of Record, which enables us to compliantly hire and onboard your Spanish supported employees on your behalf—whether one associate or a whole team. While we handle hiring, onboarding, payroll, compliance, and risk mitigation, you retain complete oversight of your team and daily management to keep your business moving forward.

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Spain Fast Facts

Currency: Euro (EUR, €)

Population: 47.07 million

Economy: US $1.4 trillion

Top Sectors: Automobiles, manufacturing, tourism, pharmaceuticals, and textiles

National Holidays:

The following are public holidays, though collective bargaining agreements (CBAs) may outline pay, additional time off, or alternate holidays.

  • New Year’s Day
  • Epiphany
  • Good Friday
  • Labor Day/May Day
  • Assumption of Mary
  • Hispanic Day
  • Immaculate Conception
  • Christmas Day

Hiring Considerations in Spain

Benefits of hiring in Spain:

  • Spain has the world’s 13th-largest economy, and the fourth-largest in the eurozone. While Spain’s economy slumped in 2008 and 2013, its rebound proved it remains a country with a diverse, resilient economy.
  • Barcelona, the country’s second-largest city, remains one of Europe’s leading and fastest-growing tech hubs, attracting startups and investors from across the continent and the globe. Tech startups enjoy a robust network, as well as more affordable salaries for equally talented employees when compared to those in other tech hubs like Berlin, Amsterdam, and Paris.
  • The World Bank’s 2020 Ease of Doing Business Report identifies Spain as the top country in the world in terms of trading across borders. With only one hour required for documentation compliance, Spain makes moving businesses’ products across borders simple.

Challenges when expanding into Spain:

  • Spain’s economy endured a record-setting 18.5% contraction in the second quarter of 2020 due to the COVID-19 pandemic. Economists predict a swift recovery after virus containment, but companies must prepare for economic challenges before the end of 2022.
  • There are several independence movements in Spain which may impact the ease of doing business. Catalon independence, specifically, threatens Spain’s overall GDP, as the region generates more than €200 billion annually.
  • Despite Spain’s history of a resilient economy, the country still struggles with the highest unemployment rate in the European Union. The COVID-19 pandemic worsened the unemployment rate, and the government still struggles to contain its impact.

Cultural nuances and must-knows for doing business in Spain:

  • Anticipate lengthy meetings and negotiations between you and your Spanish meeting members. Take the time to get to know them prior to the meeting, and understand that building a relationship remains important to deal-making.
  • Plan your meetings in regards to Spain’s lengthy national and regional holidays. If a holiday falls on a Tuesday or Thursday, expect that your counterparts will take a four-day weekend. Follow up with any proposed dates and ensure all parties will work on that day.
  • Understand that hierarchy and title remain central during meetings. Expect that higher-ranking members make decisions, which may extend the timeframe for finalization.

Employment Contracts in Spain

Minimum wages and salaries:

  • Spain’s minimum monthly wage is €1,108, as of January 2020.

Probation periods:

  • Probation periods are common, but not mandatory. All employment contracts must detail any probation period, and cannot exceed six months for technicians, and last no longer than two months for other workers.

Bonuses:

  • Bonuses are common in Spain, though vary in calculation, amount, and other criteria. Most collective bargaining agreements outline bonus structures, including discretionary bonuses, achievement-/performance-based bonuses, and guaranteed bonuses.
  • 13th-month pay is mandatory, and due during summer and Christmas.

Termination and Severance Considerations:

  • There are no statutory notice periods in Spain. However, 15 days remains common for workers below the director level, and 30 days for directors.

Paid Time Off & Benefits

Parental leave:

  • As of January 1, 2020, parents share 12 weeks’ paid parental leave. They must take the first four months immediately following the child’s birth, while the biological mother may transfer up to two weeks’ leave to the other parent.
  • From January 1, 2020, each parent will receive 16 weeks’ paid leave, under which the first six weeks immediately following the child’s birth becomes compulsory.

Vacation and annual leave:

  • Employees in Spain receive a minimum of 30 days’ paid holiday leave annually. Workers must take holidays in the year accrued, though exceptions apply.

Sick leave:

  • All employees receive up to 12 weeks’ sick leave, and opportunity for six months’ extension if they provide a doctor’s certificate to their employer.
  • Non-work related injuries entitle employees to a maximum of €3,751.20 per month. Between days four and 20, the employer pays the employee the equivalent of 60% of their reference salary. After day 21, the employee receives the equivalent of 75% of their reference salary, recoverable from the state.
  • Employers do not have to pay sickness-related social security contributions after 18 months’ sick leave.
  • All work-related injuries or illness recite the employer pay 75% of the employee’s reference salary.

Payroll

Average workweek hours:

  • Spain’s average workweek is 40 hours per week over a 12-month period, excluding overtime. However, this varies by industry, and the Spanish Supreme Court no longer requires employers keep track of indefinite-term employees’ working hours, including management and non-management.
  • Collective bargaining agreements cannot stipulate hours beyond the statutory limits.

Overtime considerations:

  • Spain caps annual overtime at 80 hours per year. All overtime hours include pay either equal to the employee’s normal salary or additional time off.

Employer Contributions

Employer Contribution

Burden

Social Security

29.90%*

Total Burden

29.90%

*Plus a percentage covering work-related accidents and illnesses

Choose Velocity Global

Taking the leap to expand into Spain is a major achievement—but it presents a number of complex procedures and potential challenges. Velocity Global and its International PEO solution give you and your organization the support and expertise you need to expand with confidence.

Choosing Velocity Global’s International PEO solution equips you with the expert insight needed to compliantly construct the foundation of your international presence. We take on all hiring and onboarding procedures on your behalf, as well as payroll, risk mitigation, and compliance measures while you focus on what matters most: running your business.

Ready to compliantly grow your business abroad and take on the Spanish market 90% faster and up to 60% more cost-effectively than traditional entity establishment?  Let’s make it happen.