The short answer is that an employee costs about 32% of their salary in social security taxes. But be aware! That 32% is not applicable to the entire salary… keep reading to find out more!
Knowing the total cost of having an employee in Spain is vital to decide whether it is worth setting up a company in this country or not.
To do this, it is essential to obtain information from reliable sources that provide comprehensive details. In this post you will find out about how to calculate what it will cost you to have an employee in Spain and what makes up this cost.
To understand the taxes that you would pay for an employee, it is important to have an outline of how the social security contribution scheme works with Spanish companies.
Social security contributions
All employees residing in Spain who work for a company are obliged to contribute to the Spanish social security by paying taxes from their salary. In the same way, all companies that have employees must contribute through taxes to the support of the Spanish social security.
The contributions to social security by employees and companies are made through the payment of a monthly fee (cuota mensual) calculated by applying a percentage to the employee’s salary. This is referred to as the contribution base (base de cotización). The employee’s monthly contribution base is made up of all the moneys received by the employee in that month, including the proportional part of any extra salary payments. For example, if an employee earns 3,000 EUR per month, their contribution base is 3,000 EUR. Then there is a limit to contributions called the maximum base, beyond which the amount of salary is not used to calculate the monthly fee of tax payable.
The part that the employee must pay is deducted from their payroll directly by the company and the part that the company must pay is calculated separately taking into account the employee’s contribution base. Both parts are added up and paid by the company to social security once a month.
Of the calculated fee there is a part that must be paid by the employee and another part that must be paid by the company. The fee must be paid even when the employee is on sick leave or on holiday.
Once the calculation is made, the company is responsible for paying the monthly contributions to social security. As mentioned before, the company retains the employee’s share, the company’s share is calculated and the sum of the two amounts is paid into social security.
Although the payment of the monthly fee is made in a unified manner to the General Treasury of Social Security (Tesorería General de la Seguridad Social), not all of the fee is destined for social security; there is also a small part allocated to vocational training of employees, another part for unemployment benefits and a further part for the Salary Guarantee Fund (Fondo de Garantía Salarial).
With respect to the payable amounts, the company is responsible for paying them into social security and may be fined if the payments are not paid or if they are not paid on time. However, if the company anticipates that it will not be able to pay the social security contributions, it can request a deferral of payment.
Except in exceptional cases, the payment of the monthly fee must be made within the month following its accrual, that is, the month following the month in which the employees’ payroll was generated.
How to calculate the monthly payment to be paid
As already mentioned, the contribution to social security is made through the payment of a monthly fee calculated by applying a percentage to the employee’s salary – the so-called contribution base.
Of the fee to be paid, there is a part that corresponds to the contribution that the company makes for the contributions of its employees and another part that corresponds to the employee’s contribution for the salary they receive from the company. However, there is a very limited list of items that are not included in the contribution base, such as travel expenses, death compensation, etc.
The basis used to calculate the contributions to be paid is made up of the total remuneration received by the employee, including the part of extra salary payments that would correspond to one month of work, and remuneration in kind. This base is divided into several items before applying the tax percentage, which are:
- Contribution basis for common contingencies: a common contingency is the situation in which an employee cannot go to work due to a non-work accident or illness and receives health care from the public health system. The base used to calculate the tax paid to cover these contingencies is called the base for common contingencies and is made up of the salaries of the company’s employees grouped by their professional category. For each group there is a minimum and maximum base. Contributions are not paid for amounts above the maximum base.
- Contribution basis for professional contingencies: a professional contingency is the situation in which an employee cannot go to work due to an accident or illness suffered at work and receives health care from the public health system. In this case, the employees are not grouped by professional categories, but a percentage of the salary with the limits of the minimum base and the maximum base is simply applied to all employees in the company.
- Contribution base for other items: these are for unemployment benefits, the Salary Guarantee Fund (the Salary Guarantee Fund is a body that accumulates funds paid by companies for the payment of salaries to employees affected by insolvencies of companies) and vocational training. To calculate this fee, the same basis is used as for professional contingencies.
Table of contribution bases for common contingencies (the maximum and minimum bases for professional contingencies are the same as for common contingencies)
| Contribution
group |
Professional categories | Minimum Base
EUR/mes |
Maximum Base EUR/mes |
| COMMON CONTINGENCIES | |||
| 1 | Engineers and Graduates. Senior management personnel not included in article 1.3.c) of the Workers’ Statute (Estatuto de los Trabajadores) | 1,759.50 | 4,495.50 |
| 2 | Technical Engineers, Experts and Qualified Assistants | 1,459.20 | 4,495.50 |
| 3 | Administrative and workshop heads | 1,269.30 | 4,495.50 |
| 4 | Non-graduate assistants | 1,260.00 | 4,495.50 |
| 5 | Administrative officers | 1,260.00 | 4,495.50 |
| 6 | Subalterns | 1,260.00 | 4,495.50 |
| 7 | Administrative assistants | 1,260.00 | 4,495.50 |
A percentage called contribution type is applied to the contribution bases described above. These include the following:
| Contingency | Company % | Employee % | Total % |
| Common contingencies | 23.60 | 4.70 | 28.30 |
| Unemployment * | 5.50 | 1.55 | 7.05 |
| Salary Guarantee Fund | 0.20 | – | 0.20 |
| Vocational training | 0.60 | 0.10 | 0.70 |
| Professional contingencies (depending on the company’s activity. An example is ‘Office work’) | 1.50 | ||
| TOTAL | 31.40 | 6.35 | 36.25 |
Example:
What is the social security cost of a company which provides architectural technical services (CNAE 71) with a single employee who earns 2,000 EUR gross per month plus two extra payments of 2,000 euros in June and December?
The contribution base will be made up of the salary plus the pro rata of the extra payments for June and December, that is: 2,000 + (4,000 / 12) = 2333.33 euros
| Social security costs | ||||||
| Company fee | Employee fee | Total fee | ||||
| Contribution base | % | Amount | % | Amount | ||
| Common contingencies | 2333.33 | 23.60 | 550.67 | 4.70 | 109.67 | 660.33 |
| Unemployment | 2333.33 | 5.50 | 128.33 | 1.55 | 36.17 | 164.50 |
| Salary Guarantee Fund | 2333.33 | 0.20 | 4.67 | 4.67 | ||
| Vocational training | 2333.33 | 0.60 | 14.00 | 0.10 | 2.33 | 16.33 |
| Professional contingencies (for CNAE 71) | 2333.33 | 1.65 | 38.50 | 38.50 | ||
| Totals | 31.55 | 736.17 | 6.35 | 148.17 | 884.33 | |
Therefore, the social security cost for the company is 736.17 EUR.
The employee will pay 148.17 EUR to social security, an amount which will be deducted from their payroll.
From the above it can be inferred that from a certain salary the tax paid to social security does not increase further, as shown in the following graph:
Additional solidarity contribution
From 01-01-2025, the following additional contribution will be applied to salaries that exceed the amount of the maximum base, according to the following tranches. That contribution will be distributed proportionally between the company and the employee.
| Year | Remuneration from maximum base up to an additional 10% from the maximum base | Remuneration from an additional 10% of the maximum base to an additional 50% from the maximum base | Remuneration higher than an additional 50% from the maximum base |
| Additional contribution rate % | Additional contribution rate % | Additional contribution rate % | |
| 2025 | 0.92 | 1 | 1.17 |
| 2026 | 1.15 | 1.25 | 1.46 |
| 2027 | 1.38 | 1.5 | 1.75 |
| 2028 | 1.60 | 1.75 | 2.04 |
| 2029 | 1.83 | 2 | 2.33 |
| 2030 | 2.06 | 2.25 | 2.63 |
Settlement and payment of fees
The settlement and payment of social security contributions is done via the direct settlement system managed through the RED system (Electronic Data Remission System) and through payment by direct debit.
The direct settlement system is called the SILTRA system. In this system, the social security calculates the contribution of each employee.
Companies must disclose to social security the variations in data produced in each period so that it can calculate the contribution to be paid by each employee.
The submission deadline is 11:59 p.m. on the penultimate calendar day of the month and the deposit deadline is the last day of the month. However, if you wish to pay the fee by direct debit, the social security draft must be accepted no later than the 24th day of the month.