Employer of Record Spain

Think of it like this: Agility EOR becomes the legal employer of your employees, taking care of all the paperwork and compliance headaches.

Agility EOR

• We manage the onboarding process and ensure everything’s in order before your employee starts
• We make sure your employees are treated fairly and compliantly in their relevant territory
• We take care of all HR matters, and can answer any and all HR queries you may have e.g. maternity/paternity leave, holidays, sick pay, and more
• We provide compliant contracts, process local payroll, and file taxes
• We issue payslips and handle payments to the employee and authorities

Your Company

• You find and manage your employees’ daily tasks
• You support their development through their work
• You follow our guidance on employment laws and best practices
• You ensure payroll bills are paid to Agility EOR on time

Benefits of using an Employer of Record (EOR)

• Faster and easier hiring: No need to set up your own legal entity.
• Reduced risk and compliance burden: We handle the legal and administrative complexities.
• More time and resources: Focus on your core business while we manage your employees.

There are a number of different ways to employ people in Spain with different levels of compliance, and different costs.

Employee is employed by you and paid by you from your overseas Company

Pros: Seems like it would be the cheapest and easiest option.

Cons: Will not be able to pay the required monthly contributions and the contract and the contract will not be in line with Spanish law.

Using an Employer of Record

Pros: The Employer of Record Spain will take care of all payroll, HR and compliance issues. An Employer of Record will be the cheapest option in time and money where an employee/employer relationship is established, and there are fewer than 15 employees.

Cons: Using an EOR service when you have more than 15 employees in Spain can be costly and setting up your own entity in-country will be more cost effective.

Entity Set-up

Pros: For large numbers of employees (circa 15+), this may be the most cost effective option.

Cons: Setting up an entity and ensuring you always adhere to employment and tax law is very expensive and time consuming. Too expensive when hiring less than around 15 employees.

Hire a contractor in Spain

Pros: Is an easy and cost effective solution if the worker isn’t working solely for one company, and can send another worker to do their work on days they don’t work.

Cons: Contractors in Spain must still be provided with a written agreement and enjoy certain protections. There are significant risks if the contractor is not hired correctly.

Contracted workers in Spain must enter into a written agreement with the hiring entity detailing the terms of the contracted work including: working hours, rate of payment and duration of the project. The worker is protected under the Estatuto del trabajo autónomo (2007), which obliges the contracting company to ensure protection of the worker against occupational risks and meet the minimum entitlements of the worker.

The contractor is responsible for all tax and social security contributions and must make file quarterly reports to the authorities. The company is also required to file quarterly (Modelo 111) and annual (Modelo 840) reporting all contracted employees.

To establish a company in Spain, the registered director will require a NIE (identity number). For a full legal entity, a Spanish bank account will also be required with evidence of the share capital as well as a registered office address.

Incorporation documents will need to be signed in front of a notary, including the public deed of incorporation. The company will then be added to the Company Registry (Registro Mercantil).

Setting up a company can be costly as it is advisable to use a local lawyer during the process, particularly if the registered director is a non-national.

With ever-changing employment laws and updates to employer obligations, statutory requirements and payroll thresholds and contributions, it is important to utilise a team with local knowledge and expertise.

Companies who fail to comply, risk hefty fines from local authorities, which is why it is important to ensure your employee is hired correctly in line with local legislation.

An employer of record such as Agility EOR, will ensure all tax and social security contributions are withheld and remitted to TGSS (Tesorería General de la Seguridad Social). Social security contributions are paid monthly while tax is remitted quarterly. Employees receive monthly payslips detailing all deductions. 

As part of our services, we ensure all mandatory occupational health checks, risk assessments and training are offered and completed. Employees in Spain are also offered optional annual medical checks.

As the workside employer, it is important that the working hours and performance of the employee are managed correctly and any concerns are reported to Agility EOR to ensure the correct procedures are followed. We can then guide and support with the requirements and legal paperwork.

In Spain, both employers and employees contribute to the social and tax system.

• Employers: Social Security, Accident Insurance, Unemployment insurance, Professional Training Fund, Salary Guarantee Fund
• Employees: . Personal Income Tax, Social Security contributions

All employees hired in Spain through Agility EOR will be provided both a SEPE contract (officially registered with Spanish Public Employment Service) listing minimum, mandatory terms in line with local labor laws and the applicable CBA and a contract with our fully established Spanish entity. Workers will be registered with social security prior to their employment start date and enjoy full protection and benefits during their employment.