Payroll in Spain: what entrepreneurs need to know (part two)

In the last post, we gave you some key insights into understanding and managing your workers’ payroll in Spain. (If you haven’t read it, we would recommend you to do so; it can be accessed here). In this post, we will continue to present all the information you need to know.

Weekly hours

As a general rule, the working week in Spain is 40 hours (full time). However, each collective agreement establishes the working day on the basis of annual hours.

There is also the option of working part-time for those workers who, by express agreement with the employer, work fewer hours than those established in the collective agreement for a full-time working day.

Number of payments

Employers generally pay their workers’ gross annual salary in 12, 14 or 16 instalments. The most common option is 14 payments, whereby the annual salary is divided into 12 monthly payments plus two additional payments.

If employees prefer to divide their salary into 12 payments, they must sign a declaration to this effect.

Contributions corresponding to additional payments and overtime

In Spain, most collective agreements include two additional payments (June/July and December). The contributions to the Social Security benefits system corresponding to these payments are shown on the monthly payslips.

Furthermore, when processing the payroll in Spain, account must be taken of overtime: workers are permitted to work a maximum of 80 hours of overtime per year, and this is subject to specific social security contributions.

Paid and unpaid leave

On some occasions, employees fall sick or are absent from work for a variety of reasons.

When they are off sick for 1 to 3 days, they do not receive any salary. When the period off sick extends to between 4 and 15 days, the company must pay 60% of their salary each day. In cases of long-term illness, Spain’s National Institute of Social Security pays 60% of the worker’s salary up to 20 days; and 75% from 21 days up to 18 months. Depending on the collective agreement, the company must pay the remainder to reach 100%.

In addition to this, Spain’s employment laws establish certain situations that justify a worker’s absence and entitle them to take leave without this affecting their salary (for example, 15 days’ holiday when getting married, 2 to 4 days upon the death of a relative…).

These laws specify that workers must justify their absence from work in any situation, otherwise the company may take the appropriate measures as regulated in the employment legislation to penalise the employee, if it sees fit.

Leave and benefits paid by the state

There are a number of instances of paid leave for which the company is not liable: these are benefits paid directly by the state to employees, such as maternity (16 weeks), paternity (12 weeks from 2020) or clinical risk during pregnancy.

Holidays

Normally, workers in Spain are entitled to 30 calendar days of holiday, or 22/23 working days, as stipulated in each collective agreement.

Additionally, they will have 14 days of holiday each year, as determined by the calendar; these break down into 10 national, 2 regional and 2 local holidays.

ROSCLAR can help you with your project in Spain

At ROSCLAR, we believe that payroll management is part and parcel of looking after the worker; it goes far beyond filling in information on a digital platform. Expert knowledge is required, together with automated management with specialist tools and advice from tax and employment experts.

We want to be your payroll partners to boost your project in Spain. Contact us and we will help you.

 

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