Zero payroll errors in 3 years — 800+ payslips monthly, bank file delivered by the 27th

Outsourced payroll services in Spain cover the complete monthly payroll cycle for Spanish-employed workers: salary calculation under the applicable collective agreement (convenio colectivo), Social Security contribution management via Sistema RED and Siltra, IRPF (income tax) withholding and filing of Modelo 111 (monthly/quarterly) and Modelo 190 (annual summary), and processing of employment registrations and deregistrations with the TGSS (Tesorería General de la Seguridad Social). Employers are legally required to submit Social Security contributions by the last day of the following month; late payments incur automatic surcharges of 10 to 20% with no grace period.

Our payroll team acts as a specialist extension of your HR department: we calculate, file, and deliver every month without you needing to track regulatory changes, collective agreement updates, or the particularities of each contract type operating under Spanish law.

Why payroll errors are more expensive than outsourcing the function

SMEs with between 5 and 50 employees face a payroll administration dilemma: they do not have sufficient volume to justify a dedicated HR administration department, but informal internal management — an administrator who “also handles payroll” — generates costly errors. The most frequent errors are incorrect IRPF withholding calculations (which generate unpleasant surprises in the annual Modelo 190 and potential regularisation payments by the employee), Siltra file submission outside the regulatory period (minimum fine of EUR 300, scalable per employee), and incorrect dismissal settlement calculations (which generate judicial claims frequently within 20 days of termination). The cost of these errors regularly exceeds the cost of outsourcing the service.

The monthly payroll cycle is one of the most critical processes in any company, and also one of the most frequently underestimated for technical complexity. An updated collective agreement, a change to the SMI minimum wage or Social Security contribution rates, a maternity leave with an employer supplement, or an annual bonus with the corresponding benefit-in-kind treatment: each requires a specific calculation that, if done incorrectly, generates discrepancies that erode employee confidence and can trigger Labour Inspectorate sanctions.

Our payroll outsourcing process

Our professionals manage the payroll cycle with a monthly four-phase protocol. Before the 23rd we receive the month’s incidents: TGSS registrations (AFI) and deregistrations via Sistema RED, data changes, sick leave certificates processed with the mutual insurer, overtime, and variable components. Between the 23rd and 26th we calculate all payslips applying the collective agreement, TGSS TC1/TC2 contribution rates, and individualised IRPF withholdings. On the 27th we deliver digitally signed payslips and the SEPA bank payment file. Within the regulatory period we submit social security contributions via Siltra and Modelo 111 to the AEAT. The annual Modelo 190 is filed in January with reconciliation of all year’s withholdings.

Sistema RED and Siltra management is a core part of the service. Our team holds authorised access to our clients’ Sistema RED accounts and manages every filing within its deadline without incident. For international groups establishing their first Spanish entity, we handle the initial TGSS registration and system setup as part of the entity management onboarding.

What our payroll services include

The service covers individualised monthly payroll calculation applying the collective agreement and current contribution rates, TGSS registration and deregistration processing via Sistema RED (AFI/FAN/FLA), monthly contribution settlement submission via Siltra, monthly Modelo 111 and annual Modelo 190 with the AEAT, SEPA bank payment files before the 27th, dismissal settlement calculations with settlement documentation, employer certificates for SEPE unemployment benefit, and for expatriates the special impatriate regime with coordination with the international mobility team.

Real results in payroll outsourcing

Zero payroll errors in three years of service across our entire active client base. Bank payment file delivered before the 27th in 100% of months without exception. Clients that outsource payroll to our team save between 15 and 40 hours of internal administrative management per month, depending on headcount and collective agreement complexity. In companies that have grown from 10 to 50 employees, outsourcing has allowed scaling without expanding the administrative team. And the risk of penalty for errors in TGSS or AEAT filings is zero with our service.

Frequently asked questions about payroll outsourcing

For payroll for internationally mobile employees operating in Spain, the special impatriate tax regime (Beckham Law) offers significant tax advantages but involves technically complex withholding calculations that must be coordinated with the IRPF regularisation and the Social Security coverage certificate (A1). Split payroll situations — where an employee’s compensation is borne by entities in multiple jurisdictions — require a precise allocation methodology that satisfies both Spanish tax and Social Security requirements and the requirements of the other jurisdiction. For complementary HR services, our people services covers the full employment lifecycle including contracts, equality plans, and labour inspection readiness.