Payroll in Spain (Nómina)

Payroll in Spain: An Overview

Spanish payroll — gestión de nóminas — is considerably more complex than in many other European countries. This complexity stems from the interaction of national labour law (Estatuto de los Trabajadores), sector-specific collective bargaining agreements (convenios colectivos), Social Security regulations, IRPF withholding rules, and an extensive system of employee benefits. For foreign companies with employees in Spain, outsourcing payroll to a specialist is almost universally advisable.

Structure of a Spanish Payslip (Nómina)

A Spanish payslip has two main sections:

Devengos (Earnings)

• Salario base: The base salary as defined by the employment contract or applicable convenio colectivo.
• Complementos salariales: Supplements — seniority bonuses (antigüedad), productivity bonuses, shift differentials, hazard pay, and sector-specific bonuses.
• Percepciones no salariales: Non-salary items — expense reimbursements, transport allowances (exempt up to EUR 1,500/year), meal vouchers (exempt up to EUR 11/day), and other exempt benefits.
• Extraordinary payments (pagas extraordinarias): Spanish workers are entitled by law to at least two extraordinary payments per year (June and December), equivalent to one month’s salary each. These may be prorated into monthly salaries (pagas extras prorrateadas) if agreed.

Deducciones (Deductions)

• Employee Social Security contributions: Approximately 6.47% of the contribution base (2025 rates).
• IRPF withholding: Variable percentage based on salary level, personal circumstances (children, disability, marital status, etc.), as calculated by the annual withholding certificate.

Social Security Contributions

For each employee, both the employee and the employer pay Social Security contributions:

The employer’s Social Security cost is therefore approximately 30.5% of the employee’s gross salary — a significant additional employment cost that foreign companies often underestimate. For a gross salary of EUR 40,000, the total cost to the employer is approximately EUR 52,000–53,000.

IRPF Withholding

Employers must withhold IRPF from each employee’s salary and pay it to the AEAT quarterly (Modelo 111) or monthly (large employers). The withholding rate is individualised for each employee based on an annual calculation (Modelo 145 — personal data form) and can range from 2% to 45%+ depending on salary level and personal circumstances.

Employers file a quarterly Modelo 111 to report and pay withheld IRPF and an annual informative summary (Modelo 190).

Collective Bargaining Agreements (Convenios Colectivos)

Most sectors in Spain have a convenio colectivo — a collective bargaining agreement negotiated between employer associations and trade unions — that sets minimum salary levels, working hours, holiday entitlements, and other conditions above the statutory minimums. These are not optional: employers must apply the relevant convenio for their sector and geographic area. Failure to apply the applicable convenio is a frequent labour law violation found in audits.

Key Employer Filing Obligations

How BMC Can Help

We provide complete payroll outsourcing: monthly payslip preparation, IRPF withholding calculation, Social Security settlement and RED System filing, year-end certificates (certificados de retenciones) for employees, and HR support on convenio colectivo compliance. We manage payroll for companies of all sizes, from single-employee setups through to multi-site operations with hundreds of employees.