Employ Candidates Compliantly in Spain

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  1. Overview: Spain
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global PEO and Payroll in Spain

Getting your business up-and-running in Spain can be challenging, especially if you do not speak the native language. Establishing your own business entity in Spain is an option to be considered as you expand abroad. But before you invest valuable resources in setting up business in Spain, you should be fully aware of the risks involved.

Acumen’s Global PEO and Payroll solution was designed especially for companies like yours, to smooth the way for quick, easy and risk-free business operations in Spain, without having to establish a legal business entity.

Acumen International – Your Professional Employer Organization in Spain

Navigating the Spanish legal system and adhering to regulations governing employment and taxation can be challenging for businesses, especially if you are not a native Spanish speaker. Partnering with Acumen International as a global Professional Employer organization (PEO) provides you with the local knowledge and support you need to conduct business in Spain without concern for legal and compliance risks.

Whether you represent international client companies or you are taking your own business operations abroad, Acumen International’s Global PEO and payroll service allows you to hire and payroll local and expat employees in Spain. With Acumen in your corner, you can quickly and easily onboard and compensate your employees without risk of legal repercussions.

International Global Payroll and Taxation in Spain

Employment related taxes

Resident & Non-resident. The Spanish system for direct taxation of individuals is mainly comprised of two personal income taxes:

  • Spanish personal income tax (PIT), for individuals who are resident in Spain for tax purposes, and
  • Spanish non-residents’ income tax (NRIT), for individuals who are not resident in Spain for tax purposes who obtain income in Spain. Therefore, persons who obtain income in Spain are either liable to pay Spanish PIT or Spanish NRIT.

Residents in Spain are generally subject to PIT on their worldwide income, regardless of where it is generated, which is taxed, following statutory reductions, at progressive rates.

Non-residents are subject to NRIT only on their Spanish-source income.

There are two types of taxable income for Spanish PIT purposes: general taxable income and savings taxable income.

Savings taxable income is basically composed of the following:

  • Dividends and other income generated from holding interests in companies
  • Interest and other income generated from transferring the taxpayer’s own capital to third parties.

As an exception, when capital transferred to a related company exceeds three times the latter’s equity, the interest corresponding to the excess is taxed as general taxable income.

  • Income generated from capitalization transactions and life and disability income insurance
  • Capital gains generated from transfers of assets.

General taxable income includes:

  • All income that is not savings taxable income
  • Capital gains not generated from transfers of assets (such as lottery prizes)
  • Income allocations, attributions, or imputations, as established by law
  • Interest and other income generated from transferring the taxpayer’s own capital to a related company when the capital exceeds three times the latter’s equity and for the part corresponding to the excess.

Regarding NRIT, income not obtained through a permanent establishment (PE) is taxed on each individual total or partial accrual of income subject to tax. This means that losses cannot be offset against gains. Taxable income for non-residents without a PE is generally the gross income stipulated in Spanish PIT law, and no reductions are applicable.

Nontaxable payments. Travel expenses as a consequence of an employee (and family) relocation, including removal fees and the services of a relocation company are not taxable. Public transport; any public transport cost for which tickets or receipts are presented to the employer are not taxable.

Payroll Cycle in Spain

The payment of salary must be done timely. Normally salaries are paid the last day of the month or the first day of the following month.

Employees are entitled a monthly salary above the minimum wage. Additionally, they are also entitled to two additional, mandatory monthly salaries per year, one at the end of July and the other one at the end of December.

Non-payroll taxes in Spain

Spanish VAT is payable on supplies of goods and services carried out in Spanish VAT territory and on imports/intra-EU purchases of goods and services. There are three rates of VAT for different types of goods and services.

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How Acumen’s International PEO and Payroll Service can Benefit Your Business in Spain

Compensating your local and expat workforce in Spain and closely adhering to Spanish taxation requirements can divert your attention and resources from activities that help your business grow. A reliable global employment solution like Acumen’s Global PEO and Payroll service can take a substantial burden off your shoulders so you can focus on running your company.

Outsourcing the administrative and compliance tasks involved in employee payroll is one approach, but we have a better solution. Acumen International offers a global PEO and payroll solution that goes beyond outsourcing. We hire and compensate your global workforce on your behalf, and take care of all the details of payroll while ensuring full compliance with Spanish labor and taxation laws.

It is important to note that Acumen does not provide international global payroll services as a standalone solution, but only as a part of our global PEO and Payroll solution.

Our comprehensive global PEO and payroll services are just some of the benefits of partnering with Acumen International. We make it easy for you to achieve your business goals in Spain by officially employing and compensating your best selected global talent – both locals and expats – without concerns for legal and compliance risks faced by global employers.

Disclaimer: Any of the above information is subject to changes imposed by Spanish laws. To get the latest updates on taxation in Spain and in 190 countries worldwide, contact Acumen’s team of global employment experts.

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