How to hire in Spain through an EOR

Fixed-term contracts in Spain have faced strict limits since the 2021 reforms. If you use them for roles that are effectively permanent, they'll automatically convert to indefinite contracts.

Contract types

Indefinite contracts are the default now, and most companies use them. The 2021 reforms were specifically designed to curb temporary hiring abuse, so temporary contracts are only valid for genuine short-term needs, like covering leave or a spike in workload.

For most hires, go indefinite. Temporary contracts come with a 12 days' pay per year worked payout on end, and if you overuse them, you're looking at forced conversion to permanent employment anyway.

What has to be in the contract

Verbal indefinite full-time contracts are technically allowed, but you should always put it in writing. Temporary, part-time, and training contracts must be written, and either party can request a written contract at any time.

At minimum, the contract needs to cover both parties' identities, start date, job role, salary, schedule, overtime pay, holidays, and notice periods. If you're using a bilingual contract, Spanish law takes precedence, so write it in Spanish.

Probation periods are capped at 2 months for non-technical roles and 6 months for technical ones. During probation, either side can walk away without notice or reason.

Contractor vs. employee

Spain looks at control to determine worker status. If you set someone's hours, tools, and tasks, they're likely an employee, regardless of what the contract says. Genuine contractors typically set their own hours, use their own tools, and take on financial risk.

Misclassification is one of the most common issues foreign companies run into. If authorities find it, the contract converts to indefinite employment and you'll owe back social security contributions (around 30% of salary), plus fines ranging from €625 to €187,500 per worker. Courts can also award damages for things like unpaid overtime or severance.

Non-compete clauses only hold up if you're paying the worker during the restriction period, which typically runs 1 to 2 years post-exit. On IP, employees own their inventions unless you've agreed to additional compensation. Sort both of these out in the contract upfront.

Spain gives employees 30 calendar days of paid annual leave each year. That's roughly 22 working days, and it's one of the more generous minimums in Europe.

Time off

You'll need to provide at least 30 calendar days of paid annual leave. It applies to full-time workers and accrues from day one, prorated in the first year based on months worked. Full entitlement kicks in after 12 months.

Leave must be taken by year-end and can't roll over, except in cases like maternity leave. You also can't pay it out in lieu of time off while someone's still employed.

Public holidays add 8-12 days per year, depending on the region. Here's the national list for 2026:

All leave types

Spain mandates several paid and unpaid leave types, all with job protection. Employers cover some initial pay, but Social Security takes over for longer absences. Pay is calculated as a percentage of base salary.

Collective agreements often improve on these minimums, including higher sick pay rates. All leave types protect the employee's job.

Mandatory benefits

Social Security is the main one to plan for. Employers contribute 29.9-31.4% of gross salary depending on the worker's category, and employees contribute 6.35-6.7%. This covers public health insurance, pension, unemployment, and work injury.

Health coverage comes through Social Security and is fully public. There's no separate employer mandate for private health insurance. Pension contributions break down to around 24% from the employer and 4.7% from the employee. Things like meal vouchers or transport allowances aren't legally required nationwide, though some sectors include them through collective agreements.

What people actually expect

If you're hiring in Spain, the legal minimums won't get you far with strong candidates. Most companies offer 25 or more working days of annual leave. Private health insurance is also widely expected, even though public coverage exists. It speeds up access to specialists and often includes English-speaking doctors in cities like Madrid and Barcelona.

Remote work stipends are common now, typically around €30-50 per month for home setup costs. Meal vouchers (up to €11 per day, tax-free) appear in a lot of offers, particularly in tech and finance. Flexible hours and 14 salary payments per year (with extra payments in summer and at Christmas) are also standard in many roles.

If you stick to the bare minimums, expect slower hiring and a smaller candidate pool. Bumping annual leave to 25 days and adding private health coverage puts you in a much more competitive position. It's also worth checking the relevant sector agreement for your role, as these often set higher bars than the law requires.

Firing in Spain is tough. Courts tend to side with employees, and one misstep in process or documentation can turn a termination into an unfair dismissal. That means paying 33 days' salary per year of service, up to 24 months, or reinstating the worker.

Firing someone

You can't fire at will after probation. Valid grounds fall into two main types: disciplinary or objective.

Disciplinary dismissals cover serious issues like repeated absences, poor performance, disobedience, or breaches of contract. No notice or severance is required if you can prove it. But the burden of proof sits with you if it goes to court.

Objective grounds include incompetence, lack of adaptation, or business reasons like economic, technical, or organisational needs. These require 15 days' notice or pay in lieu, plus severance of 20 days' salary per year of service, capped at 12 months.

Unfair dismissal happens when your reason doesn't hold up, procedures aren't followed, or evidence falls short. Courts overturn these regularly. Protected categories include pregnant workers, those on parental leave, union reps, and recent accident victims. Dismissals in these cases are null, meaning immediate reinstatement plus back pay.

Spain is employee-friendly. Mutual agreement is generally the safest route: sign a deal and no severance is owed. Always notify in writing with the facts, date, notice period, and pay details. Issue final documents like the work certificate and social security statement.

Notice periods

The minimum notice period is 15 days for most cases, though collective agreements or individual contracts can change this. Disciplinary dismissals don't require notice unless otherwise specified. Employees give the same.

Severance

Objective dismissals require severance of 20 days' salary per year worked, prorated for partial years, capped at 12 months' total. You pay this at the point of dismissal.

Disciplinary dismissals carry no severance if upheld. Unfair dismissal jumps to 33 days per year, up to 24 months, or reinstatement at the employee's choice. Mutual agreement requires nothing. Temporary contracts that aren't renewed without cause require 12 days per year.

Calculate severance on fixed salary plus regular bonuses, divided by 30 for the daily rate. Collective dismissals follow the same formulas but add consultation requirements and Labour Inspectorate checks.

Work permits and visas

You can hire foreign nationals through an EOR. The EOR acts as the legal employer and sponsors the work permit, handling the application through the Unified Electronic Registry.

Main categories include highly qualified professionals (2-year permit, fast-track processing), intra-company transfers, and the EU Blue Card for skilled roles. A standard work visa requires a job offer, a qualifications match, and a labour market test to show no suitable EU worker was available.

Key requirements include a valid passport, clean record, health insurance, and proof of funds where needed. Processing takes 1 to 3 months for most applications, or around 20 days for highly qualified professionals. There's also a digital nomad visa for remote workers not employed locally: 1-year renewable, income threshold of €2,646/month (2026), and no local work permitted.

Non-EU hires can't start work until permit approval comes through. Your EOR can manage sponsorship, renewals, and ongoing compliance.

A few other things worth knowing

Employee data is governed by EU GDPR. You'll need explicit consent for data processing and may need to appoint a Data Protection Officer if you're handling data at scale. Fines for breaches are significant.

Trade unions are active in Spain, with 15 to 20% union density. Workers' reps have extra dismissal protections. Collective bargaining agreements (CBAs) can override statutory rules on pay, hours, and notice. Most sectors have one, so check with your EOR which applies.

2026 brings some changes to watch. There are ongoing discussions about raising unfair dismissal pay to meet ILO standards, which could push it beyond 33 days per year. New rules also tighten collective dismissals: the Labour Inspectorate must verify grounds within 15 days of consultation ending. Time tracking rules are getting stricter too, and minimum wage protections from seizure have been expanded.

Process matters here. Use your EOR for audits, CBA reviews, and filings. Getting it wrong is expensive.