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October 24, 2023

10+ Employee Benefits in Spain to Keep Your Team Happy

Hiring in Spain? Here are 10+ employee benefits your Spanish team would expect — from health insurance and pension to paid leave and other common perks.

Aine Kavanagh

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Aine Kavanagh

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Spanish employees enjoy various statutory and supplementary benefits, including medical insurance and retirement benefits. 

You must brush up on these benefits before hiring employees in Spain.

Why?

It’ll allow you to craft a competitive employee benefits package tailored for Spain, ensuring you attract and retain the finest talent. More importantly, it’ll help you comply with Spanish labour laws.

We’ll discuss everything you should know about employee benefits in Spain. 

Who Is Eligible for Employee Benefits in Spain?

The eligibility for Spanish employee benefits depends on the types of employment contracts under the Spanish Labour Law (Estatuto de los Trabajadores):

  • Permanent and temporary workers: 

    • Permanent workers (trabajadores fijos) hold an indefinite contract, while employers hire temporary workers (trabajadores temporales) for specific durations or projects.

    • Both permanent and temporary workers enjoy full job security and a comprehensive social benefits package, including medical benefits.

  • Self-employed or contractual workers (trabajadores autónomos): 

    • These individuals operate independently, often without a fixed employer. They also shoulder their social security contributions.

    • Self employed workers receive only some social benefits like health care, paternity & maternity leave, and state pensions.

8 Statutory Employee Benefits in Spain

Spanish law requires companies to offer certain employee benefits. Known as statutory benefits, it can be:

  • Entirely employer-sponsored OR

  • A part of the national social security system — Seguridad Social, managed by the National Social Security Institute (INSS).

How do Spanish social security benefits work?

It works through contributions from employees, employers, and the government. 

The Spanish government subsidises social security contributions and provides direct payments to the system (depending on the annual budget).

The employer and employees contribute — a percentage of the employee’s gross salary — to the Seguridad Social. Employers process the contributions through their payroll system.

The exact employer and employee contribution depends on:

  • The contribution bases (bases de cotización) — monthly earnings on which social security contributions are calculated.

  • The type of employment contract.

  • Specific bargaining agreements in place.

The employer is responsible for collecting and submitting the contributions to the General Treasury of Social Security. It’s the government body responsible for managing social security contributions.

Let’s check out Spain's eight statutory employee benefits:

1. Statutory Health Insurance

The Spanish government provides essential healthcare to its citizens through the Servicio Nacional de la Salud (SNS), or National Health Service.

Employees contributing to social security and pensioners are automatically eligible for public health insurance.

SNS provides various medical benefits, such as:

  • General practitioner visits

  • Emergency and nursing services

  • Diagnosis

  • Hospital stays

  • Surgical procedures

  • Prescription medicines, etc.

The catch?

SNS has certain limitations:

  • It doesn’t cover 100% of all medical expenses. In such cases, the beneficiary may need to share a percentage of the cost.

  • It lacks coverage for specific procedures, like dental and cosmetic.

  • It doesn’t allow beneficiaries to choose a specific doctor or specialist.

  • Some surgeries and treatments can have significant waiting times.

2. Paid Leave Entitlements

The following paid leave entitlements provide Spanish employees with time off, aiding work-life balance.

A. Paid Annual Leave (Vacaciones Pagadas)

Full-time employees in Spain are entitled to a minimum of 22 working days (or 30 calendar days) of paid annual leave. 

The duration can increase based on employer or sector agreements. 

Employees receive their complete salary during this leave, and any unused days can carry over depending on company or collective policies.

The annual leave is pro-rated for part-time employees and full-time workers who have not completed a full year in service.

B. Public Holidays (​​Fiestas Públicas)

Spanish employees enjoy 14 paid public holidays, including national, regional, and local holidays. 

The exact breakdown of these holidays can vary based on regional festivals and local authorities. Refer to your regional calendar to determine the actual dates.

However, the nine nationwide public holidays in Spain are:

  • Epiphany (Epifanía del Señor) - January 6

  • Good Friday (Viernes Santo) - Falls between late March and late April, depending on the year

  • Labor Day (Día del Trabajo) - May 1

  • Feast of the Assumption of the Blessed Virgin Mary (La Asunción de la Virgen) - August 15

  • National Day of Spain (Fiesta Nacional de España) - October 12

  • Feast of All Saints (Día de Todos los Santos) - November 1

  • Constitution Day (Día de la Constitución) - December 6

  • Feast of the Immaculate Conception (La Purísima) - December 8

  • Christmas Day - December 25 

C. Sickness and Disability Leave (Incapacidad Temporal)

The Spanish labour regulations allow employees to take paid time off due to common illnesses or non-occupational injuries.

Eligibility 

All employees contributing to the Seguridad Social are eligible.

Duration

An employee can avail of the sickness or disability benefit for up to 365 days, with a possible extension of 180 days. Employment and collective agreements determine the exact durations.

But look:

The sickness benefit kicks in only from the fourth day of an employee’s sickness. The first three days are unpaid.

Sickness Benefit Pay Rates
  • From the 4th to the 20th day of the sick leave: 60% of the base rate (employee’s average daily earnings).

  • From the 21st day of the sick leave: 75% of the base rate.

Who Funds the Sickness Benefit?

From the 4th-20th day of sickness, the employer must pay the sickness allowance to the employee. They can receive reimbursements from the social security system for the payment. 

After the 20th day, the Spanish social security system pays the employee directly.

Spanish law exempts sick workers from submitting a medical report to their employer for sick leave lasting less than 365 days (w.e.f. April 1st, 2023), as per Royal Decree 1060/2022 of December 27, 2022.

D. Maternity, Paternity & Partner Leave

Workers registered with Spain’s social security system receive paid maternity (Permiso de Maternidad) and paternity/partner leave (Permiso de Paternidad) during childbirth or adoption. 

The partner leave is available to the biological mother's partner (the second parent).

Eligibility for Maternity, Paternity, and Partner Leave

Eligibility hinges on the employee’s age and social security contribution history:

  • Under 21: No contribution required.

  • 21 - 26 years: Minimum 90 days of contributions in the past seven years or 180 days overall.

  • Over 26: Minimum 180 days of contributions in the past seven years or a cumulative 360 days overall.

Duration for Maternity, Paternity, and Partner Leave in Spain

The total duration of paid parental leave depends on the type of birth:

  • Single birth: 16 weeks (4 months).

  • Multiple births or adoptions (starting with the second child): 17 weeks (one-week extension for each parent).

  • Premature birth or hospitalized newborn: Leave can be extended by a maximum of 13 weeks for each parent.

But there are some rules:

  • New parents must take a mandatory 6-week leave immediately after childbirth. 

  • They can take the remaining 10 weeks (for single birth) continuously or intermittently — anytime until the child turns 12 months old.

  • Expecting mothers can also take 4-week leave from their quota before childbirth.

Pay Rates for Maternity, Partner, and Paternity Benefit

Eligible employees are entitled to 100% of their salary during maternity, paternity, and partner leave. 

The government makes the social security payments directly to the employee's bank account.

3. National Minimum Wage (Salario Mínimo Interprofesional)

Spanish workers are entitled to the Minimum Interprofessional Wage (SMI), which is reviewed annually by the government.

In 2023, the legal minimum wage in Spain is €36 per day or €1,080 per month, depending on whether the employee is paid daily or monthly. The minimum wage for hourly workers is €8.45 per hour.

4. Contributory Unemployment Benefit (Prestación Contributiva de Desempleo)

Spanish individuals who are involuntarily out of work can access government-funded unemployment benefits. 

For example, a worker laid off by the company due to financial difficulties could be eligible for this benefit. 

What are the eligibility criteria?

Eligibility requires unemployment certification from the Spanish State Employment Service (SEPE) and minimum social security contributions based on age. 

The benefit initially covers 70% of the employee's final salary for the first 180 days, then reduces to 50% afterwards. Find more information on Spain’s Unemployment Benefit.

Spain also provides a non-contributory Unemployment Subsidy (Subsidio por Desempleo). It’s financial support for those who have exhausted their contributory benefits or don't meet the contribution requirements.

5. Pension Benefits

The Spanish government offers four types of statutory pension benefits. The government determines the pension amount as a percentage of the base rate. 

The base rate (or regulatory base) is the average of an employee’s contribution bases (earnings) over a specified period.

  • Contributory State Pension (Pensión de Jubilación)

    • Spanish state pension provides financial support to retirees who’ve reached the minimum state pension age (65 years in 2023) and have contributed to social security for at least 15 years.

    • The full rate (maximum) state pension amount is €2,819.18 per month in 2023. The exact pension amount depends on the employee's previous salary and years worked. 

  • Disability Pension 

    A Spanish employee is entitled to two disability pensions:

    • Pensión de Invalidez: A permanent pension to an employee who can’t work due to an irreversible disability. The pension amount is determined by the employee's previous salary and the degree of their disability.

    • Pensión por Incapacidad: A temporary pension plan for employees who can’t work due to a reversible disability. The pension amount depends on the employee's previous salary and estimated work absences.

  • Widow/Widower's Pension (Pensión de Viudedad)

    • It’s paid to the surviving spouse of a deceased employee who was contributing to the Spanish Social Security system. 

    • The pension amount can vary between 52%-70% of the base rate (the deceased employee’s average earnings). 

  • Orphan’s Pension (Pensión de Orfandad)

    • Children under 21, or individuals up to 25 if studying or unemployed, receive a pension after losing an earning parent.

    • Based on the deceased's salary, number of children, and other factors, the monthly pension amount can reach €832.80 in 2023.

Additionally, Spain provides a non-contributory pension (pensión no contributiva) for individuals lacking sufficient contributions but facing financial hardships.

6. Workers’ Compensation Benefits

The two types of compensation Spanish workers are entitled to are:

1. Workers’ Compensation Insurance (Seguro de Accidentes pod Convenio)

It safeguards employees against workplace injuries. 

An employer must provide this accident insurance to their team if the industry collective bargaining agreement mandates it.

It covers medical treatments, disability benefits, and survivor benefits if an injury proves fatal.

2. Severance Pay (Indemnización por Despido)

All employees in Spain are entitled to severance pay from their employer unless dismissed for gross misconduct.

The terminated employee could get compensation equalling a 20-day salary per year worked, going up to a maximum of a 24-month salary. The exact amount depends on years of service and the reason for termination.

7. Worktime Related Benefits

The maximum daily work time limit in Spain is 9 hours, with a weekly maximum of 40 hours spread over 5 days. 

However, collective agreement can modify these limits.

A. Overtime Pay

Overtime pay kicks in when an employee exceeds the standard working hours. 

The typical rate (subject to collective agreements) is:

  • First 8 hours: 75% of hourly wage.

  • After 8 hours: 100% of hourly wage.

B. Flexible Retirement (Jubilación Flexible)

The provision allows retirees to combine their old age pension with a part-time job. Employees receive a salary plus an adjusted pension (proportionate to the reduced work hours).

C. Partial Retirement (Jubilación Parcial)

This scheme allows older workers to cut their work hours and begin getting part of their old age pension.

Beneficiaries receive:

  • Adjusted salary based on reduced hours, and

  • Proportional partial pension.

Learn more about the eligibility for flexible and partial retirement.

8. 13th and 14th Month Bonus

According to Article 31 of the Spanish Workers Statute Law, employers must pay their team two extra months' salary during the summers (June-July) and around Christmas.

Employers must calculate the extra salary amount proportional to the employee's work duration.

Contrary to being a 'bonus' in the traditional sense, the 13th and 14th month salaries in Spain are often seen as an alternative form of salary distribution, dividing the agreed annual salary into 14 equal payments instead of the standard 12.

The statutory employee benefits are often influenced by royal decrees (official orders by the Spanish Crown), European Commission guidelines, and other European Union mandates.

2 Other Important Benefits in Spain

While not legally required, companies in Spain usually offer private health insurance and private pension plans in their employee benefits package. 

Why?

Two main reasons: 

  • To boost their employer brand and employee morale.

  • To attract and retain top-notch talent. 

So we recommend offering these benefits to your Spanish staff: 

1. Private Health Insurance

Employer-sponsored private health insurance provides enhanced medical coverage to employees. 

It helps overcome the limitations of the SNS, providing quicker and more efficient medical coverage, including doctor's visits, hospital stays, and prescription drugs.

Thinking of the best way to gift your team with private health insurance?

Check out Kota!

Kota is an employee benefits platform that helps you roll out top-notch, fully compliant health insurance packages to your Spanish employees. 

We’ve teamed up with Allianz to offer coverage up to €2.9 million.

So, what's in it for your team?

  • Top-tier intensive care

  • Green-lit surgeries

  • Ambulance service

  • Approved scans and tests

  • Regular outpatient visits, and more. 

Plus, the added perks of private rooms, extra dental coverage, and treatments when they're travelling.

Still on the fence?

Here are more reasons to choose Kota:

  • Say goodbye to those pesky administrative tasks and broker fees.

  • Choose from plans that fit every pocket, starting as low as €90/month and stretching up to €124+.

  • Enrol employees and manage benefits through one handy digital app.

  • Monitor how your offerings stack up against the competition with our geo-location insights and offer competitive benefits packages.

2. Private Pension Plans

A private pension plan (planes de pensiones) is a retirement-saving instrument that complements Spain’s public pension system.

Employees can also contribute to these occupational pension plans, which can reduce their income tax liability.

Beneficiaries can receive the accumulated amount as a lump sum, periodic income, or a combination of both.

Additional Competitive Perks

Some optional perks you could offer your Spanish team include:

  • Learning and Development Budget: A dedicated budget to encourage employee skill enhancement.

  • Remote & Flexible Work Arrangement: Flexible schedules or remote work options to promote work-life balance.

  • Sabbatical leave: A temporary unpaid leave from work.

  • Lunch Vouchers: To cover meal expenses.

  • Company Vehicles: Especially beneficial for roles involving travel.

These perks not only add value to your employees' work experience, but also position your company as a forward-thinking and employee-centric organisation in Spain.

Secure Your Spanish Team with Top-Tier Employee Benefits

Mandatory health insurance, paid leave, overtime pay… you must offer various employee benefits to stay compliant with Spanish laws. 

But here’s the thing:

If you want your workplace to be a magnet for the best talent in Spain, offer your team a solid package with additional benefits like private health insurance, private pension plans, and other perks. 

The good news?

Kota makes employee health insurance management easy. Sign up with Kota and get your Spanish team covered in minutes!


Aine Kavanagh

Article written by

Aine Kavanagh

👋🏻 Hi I'm Aine, Head of Customer Success at Kota. Whether you're a Kota customer, a Kota user, or you're just browsing, I hope to help educate and empower those who want to know more about owning their own benefits, and building financial autonomy 📚

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