Spain is a top choice for international companies that want to hire skilled workers. The country offers a large talent pool, easy access to the EU market, and a well-established business environment, making it ideal for expanding into Southern Europe.
But hiring in Spain also means dealing with strict employment laws, payroll duties, social security, and collective bargaining rules. If your company does not have a local presence, direct hiring can be challenging.
An Employer of Record (EOR) in Spain lets foreign companies hire employees legally without opening a Spanish subsidiary. Instead of handling legal setup, payroll registration, and compliance on your own, you can partner with an EOR provider like Gini Talent to hire in Spain quickly and stay compliant.
This guide covers how EOR works in Spain, how it is different from a PEO, what foreign employers need to know about Spanish employment law, and when an EOR is the best choice for entering the market.
What Is an Employer of Record in Spain?
An Employer of Record (EOR) is a third-party company that legally employs workers for another business. In Spain, the EOR is the official employer for legal and administrative matters, while your company manages the employee’s daily tasks and performance.
This means the EOR handles important employment duties like:
- Preparing locally compliant employment contracts
- Registering the employee with the Spanish social security
- Running payroll
- Withholding applicable taxes and contributions
- Managing statutory benefits and leave
- Supporting onboarding and offboarding
- Helping reduce employment compliance risk
For international companies, this approach lets you hire employees in Spain without needing to set up a Spanish legal entity first.
For example, if a company from the US, UK, Germany, or UAE wants to hire a sales manager, developer, or other specialist in Spain, it can use an EOR to onboard the employee under a compliant local setup instead of opening a Spanish subsidiary.
The employee works for your company day-to-day, but the EOR is the official employer in Spain.
EOR vs PEO in Spain: Which Model Applies?
Many companies look at both EOR and PEO services when planning to hire internationally. Although the terms are sometimes used together, they mean different things.
A Professional Employer Organization (PEO) usually works with companies that already have a local legal entity. In this setup, your company stays the legal employer, and the PEO helps with HR, payroll, benefits, and compliance.
An EOR, by contrast, is for companies without a local entity. The EOR becomes the legal employer, so you can hire in Spain without setting up a subsidiary.
For Spain, this difference matters. If your company already has a Spanish entity, a PEO can help with HR and payroll. If you do not have a local entity, an EOR is usually the better choice. An EOR is suitable when you want to hire employees in Spain without a local entity.
PEO in Spain is suitable when you already have a Spanish entity and need HR or payroll support.
This distinction is important because Spanish employment laws require correct employer registration, payroll, and social security compliance. Using the wrong setup can lead to legal and operational problems, especially if the worker is treated as an employee but not hired through a compliant local structure.
Spanish Employment Law Essentials for Foreign Employers
Spain has strict employment regulations. Foreign employers should know that Spanish labor law covers more than just the employment contract. Collective bargaining agreements, legal rules, social security, and employee protections all play a role.
Key areas to consider include employment contract type, probation period, working time, paid leave, salary structure, social security and payroll taxes.
Contracts and Probation Periods
Employment in Spain should be based on a contract that meets local rules. Indefinite contracts are common, but temporary contracts are allowed if there is a valid legal reason.
The contrato indefinido, or indefinite contract, is the usual type of employment. Temporary contracts are only allowed in certain cases, like special projects or covering for another employee. Using temporary contracts incorrectly can lead to compliance issues.
Probation periods in Spain must be clearly written in the contract and follow legal and collective agreement limits. The maximum probation period depends on the job, contract type, and the relevant collective agreement.
For many foreign employers, the challenge is not just writing a contract in Spanish. It is also figuring out which local rules, sector agreements, and employment practices apply to each role.
An EOR provider can help make sure the contract includes the right job title, salary, probation terms, benefits, and legal requirements.
Working Hours, Leave and 14 Salary Payments
In Spain, a standard full-time work week is up to 40 hours, but some collective agreements set shorter hours. Spain may reduce the legal work week in the future, so employers should watch for updates in 2026. In Spain, employees are entitled to paid annual leave. A common statutory reference is 30 calendar days per year, although collective agreements or company policies may provide more generous terms.
Spain has a unique salary payment system. Many employees get their yearly salary in 14 payments instead of 12, with two extra payments usually in summer and at Christmas. Some companies spread these extras over 12 months, but the payment structure should be clear in the contract and payroll.
Foreign employers also need to consider public holidays, types of paid leave, and time tracking rules. Spain has strict laws on working hours, overtime, and rest periods, so these must be managed carefully.
Social Security and Payroll Taxes
Employers in Spain must register employees with social security and pay employer contributions. Employees also contribute to social security, and these amounts are withheld from their pay.
Employer costs in Spain are more than just the gross salary. Companies also need to budget for social security contributions, payroll administration, required benefits, insurance, and any extra costs from collective agreements.
Payroll must also account for personal income tax withholding, knownPayroll must also include personal income tax withholding, called IRPF, which depends on the employee’s salary, personal situation, and tax rules. lties, employee dissatisfaction and compliance exposure. This is one of the main reasons companies use an EOR in Spain instead of trying to manage local payroll from another country.
Cost of Hiring in Spain Through an EOR
When hiring in Spain through an EOR, the cost usually has three main parts:
The employee’s gross salary
Employer-side statutory contributions and employment costs
The EOR service fee
The gross salary depends on the employee’s role, seniority, location andThe gross salary depends on the employee’s job, experience, location, and market rates. Spain’s minimum wage and collective agreements can also set the lowest salary allowed for some roles, and other statutory employment-related costs. These costs should be calculated before making an offer, because the total employment cost can be significantly higher than the gross salary.
EOR pricing can vary by provider. Some charge a fixed monthly fee per employee, while others use a percentage of the salary.
When comparing EOR pricing in Spain, do not just look at the monthly fee. Also consider:
- Local compliance support
- Contract quality
- Payroll accuracy
- Onboarding speed
- HR support
- Offboarding guidance
- Experience with international companies
- Transparency of total employment costs
A cheap EOR provider can end up costing more if it leads to compliance problems, payroll mistakes, or a bad experience for employees.
Gini Talent helps companies see the full cost of hiring in Spain before onboarding, so you can plan your budget and avoid surprise payroll or employment costs.
EOR vs Setting Up a Spanish Entity
Setting up a Spanish entity is a good option for companies planning long-term operations, large teams, or a permanent presence in Spain. However, it usually takes more time, money, and administrative work.
A Spanish entity involves company registration, tax and employer registration, setting up local banking and accounting, payroll setup, and ongoing compliance.
An EOR is often a faster and more flexible option, especially if you want to:
- Hire one or a few employees in Spain.
- Test the Spanish market before committing to entity setup.
- Build a remote team quickly.
- Employ talent while the entity setup is still in progress.
- Reduce administrative workload
- Avoid delays in candidate onboarding.
EOR is especially helpful for entering the market. You can hire a local sales rep, customer support staff, or technical specialist in Spain and start working without waiting months to set up an entity.
However, an EOR is not always a permanent solution. If you plan to build a large team, sign local contracts, open offices, or set up a long-term base, creating a Spanish entity may be better in the long run.
The right choice depends on how many people you want to hire, your business goals, budget, risk level, and timeline.
How to Hire in Spain Step by Step with Gini Talent
Hiring in Spain without an entity can be straightforward with the right process. Gini Talent supports international companies at every step, from planning roles to onboarding and payroll.
Here is how it works:
First, your company defines the role, salary range, location, employment type, and start date. Gini Talent reviews your hiring plan to make sure it meets local rules.
Second, you select a candidate. If needed, Gini Talent can help with recruitment and finding qualified professionals in Spain.
Third, Gini Talent sets up the employment structure. This includes checking salary details, employment terms, benefits, probation period, and local requirements.
Fourth, the employee is onboarded through a compliant EOR setup. The contract is prepared, payroll is set up, and the employee is registered properly.
Fifth, monthly payroll and employment administration are handled. This covers salary payments, employer contributions, tax withholdings, payslips, and required employment support.
Finally, Gini Talent keeps supporting both the company and the employee during the employment relationship. If you later decide to set up a Spanish entity, the employment structure can be reviewed and adjusted as needed.
For companies entering Spain in 2026, an Employer of Record offers a practical, compliant, and fast way to hire. Instead of delaying expansion for entity setup or legal reasons, you can hire employees in Spain with confidence.
Gini Talent helps international businesses hire employees in Spain without an entity, manage compliance, and create a smooth onboarding experience for local talent, while staying aligned with Spanish employment regulations.
