Payroll in Spain

Payroll in Spain means calculating gross-to-net salary, withholding 6.50% employee Social Security and progressive IRPF income tax from each employee, paying employer Social Security of around 31% on top, issuing payslips and filing Modelo 111 with the tax office plus the Social Security contribution files each month. The key local issue is that salary is normally paid over 14 instalments rather than 12, and that income tax varies by autonomous community, so your gross-to-net maths and your annual budget both look different from a flat-rate country.

Total employer cost for a €30,000 annual salary is about €39,195, around 31% on top of gross.

Our verdict: Fewer than 2 employees and no local entity in Spain: use an EOR at $199 to $599 per employee per month. At 2 or more, opening a S.L. (roughly $4,500 in setup costs and 6 to 12 weeks to complete) usually works out cheaper. Already running a local entity: standard payroll outsourcing is the cheaper route.

Use this page if you already have, or plan to set up, a local entity in Spain and want to know what running payroll actually involves. If you want to hire in Spain without becoming the legal employer, an Employer of Record is the faster route.

No local entity yet? See our guide to EOR in Spain.

Payroll in Spain at a Glance

How Does Payroll Work in Spain?

Spanish payroll runs on a monthly rhythm with one twist in the annual count. You calculate each employee’s gross salary, strip out their Social Security and income tax to reach net pay, add the much larger employer Social Security charge on top, then report the run to two separate authorities and pay what is owed.

The first authority is the Agencia Tributaria, or AEAT, Spain’s national tax office. It is the equivalent of HMRC or the IRS: the body that collects income tax and audits employers when the figures do not line up. Income tax withheld from pay is reported and paid to the AEAT.

The second is the Tesoreria General de la Seguridad Social, the TGSS, which runs the country’s social insurance system. It is the treasury arm of the Seguridad Social, the state scheme that funds pensions, healthcare, unemployment and sick pay. Both the employer and employee contributions go to the TGSS, not the tax office.

Income tax is called IRPF, short for Impuesto sobre la Renta de las Personas Fisicas. It is Spain’s personal income tax, withheld from each payslip on a progressive scale that rises with salary. The exact rate depends partly on the autonomous community the employee lives in, because regions set part of the scale.

Two reporting channels carry the monthly load. Modelo 111 is the form you file with the AEAT declaring the IRPF you have withheld from salaries. The Social Security contributions are filed separately through SILTRA, the government’s electronic system for transmitting and settling contribution data with the TGSS.

Get the order, the rates or the regional IRPF wrong and two things break at once: the employee’s take-home pay is incorrect, and your monthly filings to the AEAT and the TGSS no longer reconcile.

One structural feature shapes everything. Spanish salaries are usually paid over 14 payments a year, the 12 monthly runs plus two extra payments, traditionally in summer and December. We unpack how that affects budgeting and payslips further down.

What Payroll Taxes Apply in Spain?

Three charges sit on every Spanish salary: the employer’s Social Security contribution, the employee’s Social Security deduction, and IRPF income tax. They are calculated in a fixed order, and that order is what produces the gross-to-net result.

Employer Payroll Contributions in Spain

The employer carries the heavy side of Spanish payroll. Total employer Social Security runs 30.65% of gross salary, and the full burden climbs higher once the variable occupational-accident premium is counted, far above the employee’s own deduction.

This contribution funds the same Seguridad Social system, covering common contingencies, unemployment, work-accident cover, training and the wage guarantee fund. It is a charge on top of gross salary, separate from anything withheld from the employee, and it is the main statutory cost of employing someone in Spain.

This matters for budgeting. The total cost of a hire always runs roughly a third above the headline salary, so you budget on total employer cost rather than gross, and you remember that an annual salary is spread across 14 payments, not 12.

The true cost of employing in Spain

Statutory employer rates; items can apply to different wage bases or carry conditions, so lines do not always sum to the total.

A statutory 13th-month payment applies: Two extra monthly pays per year (pagas extraordinarias) under Estatuto de los Trabajadores Art. 31. Payment falls due on June and December.

Sources: taxsummaries.pwc.com (employer contributions), boe.es (bonuses).

Employee Payroll Deductions in Spain

You withhold Social Security from the employee at a combined 6.50% of gross pay. That breaks down into 4.70% for common contingencies, which fund pensions and most state benefits, 1.55% for unemployment, 0.10% for training, and 0.15% for the MEI, the intergenerational equity mechanism that helps fund future pensions.

These deductions apply up to a monthly contribution ceiling, an upper earnings limit set each year above which no further Social Security is withheld. Below that ceiling, the 6.50% comes off gross pay before income tax is calculated.

These are the employee’s contributions, but you are responsible for calculating, withholding and remitting them through SILTRA. If your provider miscalculates the 6.50%, the employee is underpaid or overpaid and your contribution files will not reconcile against what you settle with the TGSS.

Income Tax on Salary in Spain

IRPF is withheld from each payslip on a progressive scale that runs from roughly 19% at the lowest band to about 47% at the top. The rate is not flat: it climbs as salary rises, and the employer’s job is to withhold an estimated amount each month that lands close to the employee’s actual annual liability.

The detail that catches foreign employers is regional variation. Spain’s autonomous communities, such as Madrid, Catalonia and Andalusia, set part of the IRPF scale, so two employees on identical salaries in different regions can take home different net pay. A capable payroll setup applies the correct regional rate for each employee’s place of residence.

Payroll Tax Example: Gross Salary to Net Pay

Here is how the charges stack up for a representative salary. The figures come from the contribution and tax rates above, calculated in the statutory order.

Simplified illustration: Single taxpayer, salary below the Social Security contribution ceiling, with no regional IRPF specifics, on 2026 rates (employee 6.50% incl. MEI 0.15%; employer 30.65% incl. MEI 0.75%, excl. the variable occupational-accident premium). IRPF is a simplified withholding computed from the general progressive scale after deducting Social Security and the EUR 5,550 personal minimum. Personal minimum of EUR 5,550 is taxed at 0% before the progressive scale applies.

Read the two bold rows together. A worker on €30,000 gross takes home about €23,134, while your total cost as employer is €39,195.

The gap on the employee side is moderate; the gap between gross and your cost is the employer Social Security loading at roughly a third. That is the Spanish payroll signature: budget on the €39,195, not the €30,000, and remember the IRPF line shifts with the employee’s region.

What Payroll Filings Are Required in Spain?

Spain splits its monthly payroll reporting across two channels rather than one, which is more work than a single unified return. Income tax goes to the AEAT through Modelo 111, and the Social Security contributions go to the TGSS through SILTRA. Both have to be filed and settled by the same monthly deadline.

What Modelo 111 and SILTRA Report

Modelo 111 is the form you file with the AEAT declaring the IRPF income tax you have withheld from salaries during the period. In one submission it reports the total withholding for the whole workforce, and you pay that amount to the tax office alongside it.

SILTRA is the separate electronic channel for the Social Security side. Through it you transmit the contribution data and settle both the employer’s roughly 31% and the employee’s 6.50% with the TGSS. The two filings cover different taxes to different authorities, so a clean Modelo 111 does not mean your Social Security side is clean.

When They Are Due

Both filings are due by the 20th of the month following the reporting period. Pay for May is declared and the related tax and contributions settled by 20 June. The filing deadline and the payment deadline fall on the same date, so your provider needs the run finalised with enough margin to submit Modelo 111 to the AEAT and transmit the contribution files through SILTRA before the cut-off.

Who Files Them

The legal obligation sits with the employer. In practice, your payroll provider or a local gestoria prepares and submits Modelo 111 and the SILTRA files on your behalf, or your in-house team files them directly if you run your own Spanish entity.

Either way, confirm in writing who presses submit for each channel every month. The liability for a late or wrong filing stays with you as employer regardless of who does the keying.

What Happens If Payroll Filings Are Wrong

The two authorities penalise differently. For tax, a voluntary late Modelo 111 carries a progressive surcharge of 1% per month of delay, up to 15%, with no further penalty; but if the AEAT raises it first, penalties run from 50% to 150% of the tax due. For Social Security, the TGSS charges a 10% surcharge if you pay within the first following month and 20% thereafter, and failing to register an employee at all is a serious infringement with heavy fines.

What Are the Payroll Deadlines in Spain?

Most Spanish payroll obligations land monthly, anchored to that 20th-of-the-following-month filing and payment date. The exception is the Social Security registration: a new hire must be entered before they start, not at month end.

Late filing: For taxes (AEAT): Voluntary late filings incur a progressive surcharge of 1% per month of delay, up to 15%, without further penalties. If initiated by the tax authority, penalties range from 50% to 150% of the tax due. For social security (TGSS): Late payments incur a surcharge of 10% if paid within the first subsequent month, or 20% thereafter. Failure to register an employee is a serious infringement with significant fines.

Payroll Operations Risk in Spain

Employers in Spain file with 3 separate agencies.

Sources: mites.gob.es (compliance), bde.es (payments).

What Are the Payslip and Social Security Registration Rules in Spain?

Spain requires an itemised payslip, the nomina, for every employee each month. The nomina has to show gross pay, each Social Security deduction, the IRPF withholding and net pay, and it is issued for every run. Your payroll provider should produce a compliant nomina automatically from the same calculation that feeds the filings.

The registration rule is the one that catches foreign employers. Before an employee starts, you must file an alta in the Seguridad Social, the act of registering them with the social insurance system, through the Sistema RED, the government’s online channel for managing contributions and registrations with the TGSS.

Miss that pre-start alta and the employee is treated as working unregistered, which the labour inspectorate penalises heavily, well beyond a late tax filing. Treat the RED alta as a hard gate before anyone’s first day.

The 14-payment structure also shapes the payslip. Most Spanish contracts spread annual salary across 14 instalments, the 12 monthly nominas plus two extra payments, though some employers prorate the two extras across all 12 months instead. Confirm which model each contract uses, because it changes the monthly nomina figure even when the annual salary is identical.

How Much Does Payroll Outsourcing Cost in Spain?

There are two separate numbers in Spanish payroll cost, and confusing them is the most common budgeting mistake. The first is your statutory employer cost, which is the roughly 31% employer Social Security on top of gross.

11 of the 15 EOR providers we track publish Spain fees; they range from $199 to $599 per employee per month.

Published list prices in USD: EOR fees are per employee per month, contractor fees per contractor per month. Providers that publish neither fee for Spain are not shown.

According to Whichapp’s July 2026 analysis of EOR fees across 40 countries, providers charge $199 to $599 per employee per month in Spain.

11 of the 15 providers we track publish Spain EOR fees. The lowest published rate is $199 per employee per month and the highest is $599.

Contractor management fees in Spain run from $6 to $49 per contractor per month.

The second is the fee you pay a provider to run the payroll for you. They are unrelated, and only the second is negotiable.

Managed Payroll Provider Fees

Managed payroll in Spain is normally priced per employee per month, and most providers quote rather than publish a rate. The price turns on headcount, on whether you also need accounting or HR support, and on local complexity such as the 14-payment structure, employees across several autonomous communities, or the collective agreement that governs your sector.

The fee buys the calculation, the Modelo 111 and SILTRA filings, the RED alta upkeep and the nomina production. It does not include the Social Security contributions or income tax themselves, which you fund on top, so gather two or three quotes before committing.

What Payroll Provider Fees Usually Include

A standard managed payroll fee in Spain should cover the monthly gross-to-net calculation, withholding of the 6.50% employee Social Security and IRPF, preparation and submission of Modelo 111 to the AEAT, transmission of the contribution files through SILTRA, RED registration and updates, and the monthly nomina. Ask for that list in writing. If any of it sits outside the headline fee, you want to know before the first run, not after.

Extra Payroll Costs to Ask About

The gaps tend to appear at the edges of the standard cycle. Ask specifically about the annual Modelo 190 summary, handling of the two extra payments, collective-agreement updates, severance and termination calculations under Spanish law, correction filings when something has to be restated, and onboarding setup fees for taking on your entity. These are the line items that turn a tidy per-head quote into a larger annual number.

When Payroll Outsourcing Becomes Cheaper Than EOR

The choice between running your own payroll and using an EOR is mostly about headcount and how long you plan to stay. An EOR carries a higher monthly fee per person because the provider is the legal employer and absorbs the entity, but it saves you setting one up.

Running your own payroll through a Spanish SL is cheaper per head once you are past a handful of employees and committed to staying, because the entity and provider fee spread across more people. In our assessment, the more people you hire and the longer the horizon, the more the economics favour your own entity with outsourced payroll.

Payroll in Spain vs EOR in Spain

The line between the two routes is simple: standard payroll assumes you are the legal employer through a Spanish entity, while an EOR makes the provider the legal employer so you do not need one.

Use payroll outsourcing if you already have a local entity (SL (Sociedad Limitada)) or are hiring enough people to justify one. Use an EOR if you need to hire before setting up an entity.

If that second case is you, our guide to EOR in Spain covers the providers, licensing and costs in full. EOR pricing and provider ranking live there, not on this page.

Best Payroll Providers for Spain

These providers all run payroll in Spain, but they are built for different situations. Below is where each one fits and the local point to check before you sign. We do not list EOR prices here; for unpriced managed payroll, treat the fee as by quote and confirm it during your shortlist calls.

4 providers in Whichapp’s independent index cover Spain. The top 4 by composite score:

1. Deel (9.1/10). From $599/month. Best for scale, automation and contractor volume. Runs its own Spain entity.
2. Papaya Global (8.2/10). From $650/month. Best for multinational payroll consolidation. Serves Spain through a partner.
3. Remote (8.0/10). From $599/month. Best for IP protection and owned-entity purity. Runs its own Spain entity.
4. Rippling (6.4/10). Best for unified IT, HR, and global finance. Runs its own Spain entity.

Rankings come straight from Whichapp’s provider index (coverage 30%, pricing transparency 25%, security and compliance 25%, integration depth 20%); see how we score.

Only 3 of 4 major EORs run their own Spain entity; 1 more serves it via a partner.

Entity model as reported on provider websites, last checked 2026-06-06. An own entity means the provider is the direct legal employer; a partner model adds a third party to the chain.

Deel for Payroll in Spain

Deel is a strong fit if Spain sits alongside other European hires you want on one platform, with a single dashboard and API across markets. Spain watch-out: confirm whether your Spanish payroll runs on Deel’s own local entity or a partner gestoria, and that it files Modelo 111 and the SILTRA contribution files directly rather than handing them to a third party. Read our Deel review.

Remote for Payroll in Spain

Remote runs much of its payroll through owned entities, which gives a cleaner compliance chain than a partner-network model. That suits employers who want a direct line of accountability for Modelo 111 and the Social Security filings.

Spain watch-out: confirm Spanish payroll is on Remote’s owned entity rather than a local partner, and that the RED alta and regional IRPF rates are handled inside the platform. Read our Remote review.

Papaya Global for Payroll in Spain

Papaya Global is built for consolidating payroll across many countries with finance-grade reporting and audit trails, so it earns its place when Spain is one market in a larger stack. Its weakness is the opposite case: for a single Spanish entity with no multi-country reporting need, the platform is heavier than the job requires.

Spain watch-out: Papaya leans on local partners in some markets, so confirm whether your Spanish payroll runs on its own entity or a third-party bureau, and how directly it owns the Modelo 111 and SILTRA filings. Read our Papaya Global review.

Rippling for Payroll in Spain

Rippling appeals when you want payroll wired into the same system as HR, IT and device management, with automated journal entries. Spain watch-out: it is platform-first, so confirm the depth of its Spanish statutory handling, specifically the 14-payment structure, regional IRPF and the SILTRA contribution files, against what a local specialist would offer. Read our Rippling review.

Multiplier for Payroll in Spain

Multiplier is the value option for multi-country payroll where price predictability matters, which fits smaller Spanish teams. The trade-off for that price is depth: in tightly regulated markets it tends to carry less local specialist weight than a Papaya or an in-country gestoria.

Spain watch-out: confirm it files Modelo 111 and registers the RED alta directly rather than through a reseller, and that its gross-to-net engine handles the 14-payment structure and regional IRPF accurately before you anchor any salary offers on it. Read our Multiplier review.

Safeguard Global for Payroll in Spain

Safeguard Global is a payroll-led specialist rather than an HR platform with payroll bolted on, which appeals when running the payroll correctly is the whole point and you do not need a wider people stack. That focus is also its limit: if you want integrated HR, devices and onboarding in one tool, it does less than Rippling or Deel.

Spain watch-out: confirm its Spanish coverage is run in-house rather than subcontracted, and that the service includes the RED alta upkeep and AEAT correspondence, not just the monthly calculation. Read our Safeguard Global review.

How to Choose a Payroll Provider in Spain

The questions below separate a provider that genuinely runs Spanish payroll from one that resells a local gestoria without owning the detail. Ask them before you sign, not after the first run.

Can They File Modelo 111 and SILTRA?

Confirm the provider prepares and submits Modelo 111 to the AEAT and transmits the contribution files through SILTRA to the TGSS each month, and that it reconciles both against the actual payroll and bank payments. Ask who presses submit on each channel and by when.

Do They Manage the Seguridad Social Alta (RED)?

Check that new-hire registration, contract changes and terminations are filed through the Sistema RED within the statutory deadlines, especially the rule that a hire must be registered before their first working day. A provider that treats the RED alta as an afterthought leaves you exposed to the labour inspectorate.

Can They Model Gross-to-Net Accurately?

A capable provider models gross-to-net both ways, applies the correct regional IRPF rate for each employee’s autonomous community, and handles the 14-payment structure rather than assuming 12. Ask to see a sample calculation for two employees in different regions on the same salary.

How Do They Update for Payroll Law Changes?

Spanish contribution rates, the contribution ceiling, IRPF bands and the sector collective agreements change often. Ask how the provider tracks these changes and how quickly updates reach your payroll runs.

Who Is Liable for Payroll Errors?

The statutory liability stays with you as employer, but the contract should set out what the provider is accountable for if a miscalculation or late filing is their fault. Get the indemnity and correction process in writing.

Can They Support Multi-Country Reporting?

If Spain is one of several markets, confirm the provider can consolidate reporting across them in a single view, so your finance team is not stitching country files together by hand.

What Support During Terminations or Audits?

Terminations and AEAT or TGSS queries are where weak providers show their limits. Ask what support you get during a Spanish severance calculation or an audit, and whether a named contact handles it or you are routed through a ticket queue.

What Does Terminating an Employee Cost in Spain?

Severance: 20 days of salary for each year of service, with periods of service less than one year being prorated on a monthly basis. The total compensation is capped at a maximum of 12 months’ salary.

Statutory leave: 22 days of paid annual leave plus 14 public holidays a year.

Sources: boe.es (severance), mitramiss.gob.es (leave).

Spain Payroll Checklist Before Hiring

• Confirm whether you need payroll or an EOR
• Check your local entity status
• Model gross-to-net salary for your offers
• Confirm employer contribution rate (employer SS)
• Confirm employee deductions (Common contingencies, Unemployment, Training, MEI)
• Confirm income tax treatment
• Check who files Modelo 111 / SILTRA and by when
• Confirm Seguridad Social (RED) registration is handled
• Confirm the payslip process
• Check leave, sick pay and termination workflows
• Ask who carries liability for calculation errors
• Confirm provider pricing and any extra fees

Work through this before your first hire. The Seguridad Social registration at point eight is the one foreign employers miss most often, because the RED alta falls due before the employee’s start date rather than at month end.

FAQs About Payroll in Spain

Methodology and Disclosure

The Social Security contribution rates, the IRPF treatment, filing deadlines and penalty figures on this page come from Whichapp’s Spain statutory dataset, grounded in Seguridad Social and TGSS 2026 rates and AEAT income tax rules, and refreshed as rates change. The worked example is a simplified illustration calculated from those rates and reconciles by construction.

Provider assessments reflect our independent editorial view of payroll fit for Spain; we do not sell payroll, EOR or contractor services. Some provider links may carry affiliate referrals, which never affects our editorial judgement or the figures above.

Already hiring contractors instead of employees? See contractor management in Spain, or start from the Spain hiring hub for the full picture.

Primary sources

• Income tax and employee contributions: taxsummaries.pwc.com
• Employer contributions: taxsummaries.pwc.com
• Minimum wage: boe.es
• Payroll filing deadlines: sede.agenciatributaria.gob.es
• Notice periods and leave: mitramiss.gob.es
• Severance rules: boe.es
• Entity setup benchmark: investinspain.org