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3 Things to Consider When Employing in Spain: A Guide for Overseas Employers

When you are employing workers in Spain (either expats or locals) there are three things to consider about how statutory leave and certain employee expenses are treated in that country.  One of our clients had questions about how to handle the specific Spanish entitlements and reimbursement rules, and here is how we responded:

1.    Annual Leave Entitlements for Employees in Spain

First, our client requested the statutory annual leave (vacation) policy for Spain and information on the public holidays:

We told them that the minimum annual leave in Spain is 30 calendar days, which is 22 working days per year.  This can be increased by contract or collective agreements, but cannot be less than the minimum.

In addition, there are paid holidays of 14 days (differs by region) that are not included in the 30 days of leave.  That is a total of 36 days of paid working days off, which is quite generous compared to many countries.

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2.    Commuter Expenses in Spain

The client’s next question was if employees in Spain should be reimbursed for commuting to work.

This is not an unusual expense, and for example in the US it is common to offer reimbursements for commuter expenses.  They asked whether this can be done in the other countries and allowed as a non-taxable reimbursement.

In Spain, in order to pay commuting expenses, the work residence and the employee’s house should be in two different cities, and the amount is then processed as usual expense reimbursement (with receipts, expense reports).  Those are non-taxable reimbursements to the employee.

If the workplace and the house are both in the same city then it is not allowed as a non-taxable reimbursement but can be paid as a bonus or taxable benefit, which would need to be grossed up in the payslip.

3.    Maternity Leave in Spain

The client’s final question pertained to maternity leave in Spain, and how to obtain the social security benefit (which is how the leave is paid).  This benefit is available to foreign workers with a residence permit who are making social security contributions, as well as locals.

Maternity leave for a woman will last 16 uninterrupted weeks, which may be extended by two weeks for twins. This leave can be taken as decided by the employee as long as six weeks are taken immediately after the birth.  So, the leave benefit helps offset lost wages during the maternity period.

Our client’s employee was having a problem managing the leave benefit with the social security office and needed a company certificate to confirm the birth.  Our local partner in Spain acting as employer of record requested that the employee send over a medical certificate of the birth, and then we will apply for the leave with the ‘certificado de empresa’ (Company Certificate of Maternity).  That would allow her to receive the maternity leave benefit without any problem.

4.    The Shield GEO Solution

These issues facing our client is Spain are all examples of how we support their international assignments by relying on our in-country experts and local partners.  Every country has a myriad of unique rules on leave, expense reimbursement, benefits and taxation which require detailed and accurate solutions.  Shield GEO makes international employment simple by ensuring compliance and efficient management of payroll, immigration rules and statutory contributions.

 Need more information about employing in a new country? Learn more about:

Looking to hire an employee in Spain? Get in touch.

The information in this article is subject to changes in local legislation.

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