Compensation and benefits are vital to both employees and employers. When expanding into Spain, you’ll need a strong benefits management plan that includes both guaranteed and supplemental benefits to bring in top talent. Plus, you must meet the statutory minimums to stay compliant and avoid fines.
Spain compensation laws
In 2023, Spain’s minimum wage rose to EUR 1,080 per month. However, the actual rate companies must pay workers can change if a Collective Bargaining Agreement (CBA) applies. Overtime can either be compensated monetarily or through paid time off.
Guaranteed benefits in Spain
Spain has numerous guaranteed benefits that employers must provide. For example, employees get a day off on Spain’s public holidays. The country also has regional holidays that vary based on where the employee is located. Employers are required to provide a minimum of 30 calendar days of paid vacation each year.
Another guaranteed benefit is maternity and paternity leave. Pregnant employees receive 16 weeks of paid leave — 6 of which must be taken after the child’s birth. Birthing parents can then take up to 1 year of unpaid leave and still be guaranteed their job upon their return. Non-birthing parents are also entitled to 16 weeks of leave.
Spain benefits management
Another significant part of a competitive Spain benefits plan is providing the top benefits local employees seek. In Spain, it’s customary for CBAs to define varied employment conditions that surpass the legally mandated minimums. CBAs result from negotiations between employers and workers’ representatives, allowing for the inclusion of extra benefits. Once these benefits are agreed upon and incorporated into the CBA or individual agreements, employers are bound to honor the terms and provide the specified benefits.
Commonly included benefits encompass pension and retirement plans, along with insurance. Employers are also obliged to contribute to state social security, health, and unemployment insurance.
Restrictions for benefits and compensation
Before you outline specific compensation and benefits in an employment contract, you will need to check any applicable CBAs that could stipulate certain restrictions. A CBA will often detail a different minimum wage or amount of paid vacation time. When hiring in Spain, the employment contract must meet or exceed the CBA’s restrictions.
Spain competitive benefits planning
Employee benefits planning in Spain can help you establish your business and recruit the right professionals to join your team. With a program that sets your employees up for success and balances key compliance and budgetary requirements, you can grow your company faster while engaging your team more effectively.
Spain employee benefits plans
Beyond meeting compliance requirements, a thoughtful benefits program can demonstrate how much you value your talent as well as improve employee morale and boost retention rates. Extra benefits can also make your open positions more competitive in the job market.
Consider providing perks and fringe benefits, such as:
- Private pension plans
- Mobile phone
- Professional learning resources
- Business travel reimbursements
- Relocation assistance
- Childcare and education stipends
- Meal vouchers
- Life insurance or death in service
- Private medical insurance
Requirements for employee benefits in Spain
Under the Workers’ Statute (Estatuto de los trabajadores), permanent and temporary workers must receive the same supplemental benefits. Employers must include the following mandatory benefits in their programs:
- Paid annual leave
- 16 weeks of maternity leave
- Paternity and partner leave
- Sick leave
- Medical insurance through mandatory social security system enrollment
How to design your employee benefits program
Every country’s legal requirements and market standards differ, but you can follow these basic steps to establish your benefits program internationally.
1. Establish your goals and budget.
Defining the scope and key objectives of your benefits program early on will help you move forward more efficiently and sustainably. Take the time to evaluate your resources and discuss your company’s goals for growth in Spain. Meet with stakeholders to get a holistic view of your company’s objectives and determine how your benefits program can fit into them. If employee retention is a priority, for example, you might consider offering more supplemental benefits and keeping your team small.
2. Research key employee needs.
Conducting a needs assessment can help you understand employees’ perspective on benefits in your new business region. Consider mailing out questionnaires to local workers or conducting interviews with employees to discuss the benefits they value most.
During your research, you can also spend time assessing the benefits other regional companies offer so you can develop a more competitive plan.
3. Create your employee benefits plan.
Use your research to inform planning decisions and build a program that delivers key benefits for employees and works with your available budget.
As you begin calculating benefits, remember to factor in cost containment features, administration expenses, and employee contributions. Keep in mind that you can revisit your plan as your company grows and you have more resources available.
Average cost of benefits per employee
Benefits costs can vary widely from one business to another. Your company’s industry, size, and location are just a few factors that can influence the cost of your benefits plan, so the national average cost of benefits may not be a helpful metric.
How to calculate employee benefits
You must provide social security contributions to support employees’ health coverage needs. The total premium is typically 28.3% of an employee’s salary, with the employee paying 4.7% and the employer contributing the remaining 23.6%.
Spain’s labor laws outline payment rates for maternity leave, sick leave, and other mandatory benefits.
Calculations for supplemental benefits will vary depending on your offerings. Research comparable rates for your region and industry to identify market standards.
Employee health benefits plans
Employers are required to enroll all employees in the social security program for healthcare benefits. Companies will also need to contribute a percentage of social security payments for all workers.
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