Payslip in Spain: How does it work?
The payslip in Spain is known to be one of the most complex payslips in Europe. Are you a foreign employee in Spain? Or do you deploy your staff here? As an employer in Spain, you are required to provide payslips to your employees. We’re happy to explain to you how the Spanish payslip works!
When you’re employed in Spain, you will receive your payslip (‘nómina’, as they say in Spain) at the end of each month. This payslip is really important because it proves the contract between the employer and employee. Apart from that, it proves the provided service and the payment for it. You can divide the payslip into three sections:
- The header, which contains information about the employer and employee.
- The middle, where you will find information about the period, earnings and deductions.
- The footer includes information about the rates which are used for calculation.
What needs to be included in a payslip in Spain?
In Spain, the following concepts must be considered to calculate the monthly payment:
- Contract (temporary, permanent)
- Employee, personal situation (married, has children or dependents)
- Collective bargaining agreement
- Extra payments
- Professional category and contribution group
- Medical leave, sickness, paternity or maternity (if applicable)
How to read your payslip in Spain?
To fully understand your Spanish payslip, we’ll show you visually how it’s built up. It starts with the company and employee data, and the date to which the payroll refers.
1. Empresa (Company):
Here you will find the legal name of the company, its fiscal address, the CIF and the contribution account (social security number).
2. Trabajador (Employee):
This contains the full name of the employee, the ID, social security affiliation number, professional category or group, contribution group, date of seniority or entry to the company and contract code.
3. Periodo Devengado (Settlement period):
This is the month worked referred to by that payroll. It includes the start date, the end date and the total days of work for this period.
4. Devengo (Accruals):
All the salary concepts that the employee has generated during the month worked and to which no deduction has yet been applied, must be included. The sum or total of these, creates the gross salary (total devengo, 4.1 to 4.5). The total devengo contains the following aspects:
- Salario Base (Base salary):
The amount that the worker receives for the days worked.
- Plus Convenio (Salary supplements):
The extraordinary amounts that the employee receives for his work. Either plus by agreement, seniority, etc.
- Mejora Absorbible (Voluntary improvements):
If employees are offered the part of their salary as salary in kind or flexible compensation, the amounts allocated to it must also appear here. The salary in kind cannot exceed 30% of the gross salary.
- Paga Extra Prorrateada (Extra payments):
Extra payments are prorated in the monthly salary and received gradually every month. In this case, the extra payments are holiday pay and the Christmas bonus.
- Incentivos (Overtime):
5. Deduccion (Deductions):
These are the amounts that are to be Total deducted from accruals and that will result in the employee’s (5.1) Liquido total a percibir (Net salary):
- Dto. Cont. Comunes (Social Security contributions):
These deductions are divided into common contingencies (4.80%), unemployment (1.55% if the contract is indefinite or 1.60% if the contract is of fixed duration), professional training (0.10%)
- Retencion IRPF (IRPF income tax):
This amount is calculated according to the income of the worker and his personal situation.
- Value of products received in kind:
The total amount of products received in the kind that appears in the accrual part is also included in the deductions. With the flexible compensation, the employee decides to use part of his salary in favour of certain products and services offered by the company. That is why its price is subtracted in the part of the deduction. (not in this example)
Other deductions: This can include loans that the employee must pay back to the company, union dues, etc. (not in this example)
6. Determinación de las bases de cotización a la seguridad social y conceptos de redaución.
Conjunta y de la base sujeta a retención del IRPF y aportación de las empresa (Determination of the bases of social security contributions and joint collection concepts and the taxable bases subject to tax with holdings and company contribution):
This section details the contribution bases, with the contributions of the employee and the company.
- Contingencias communes importe remuneración mensual importe prorrata pagas extraodrinarias (Common contingency contribution base BCCC):
BCCC: Base Salary + Salary supplements subject to contributions + the apportionment of extra payments. Although the worker charges the extra payments in the times that mark his agreement, this apportionment is necessary, since the Social Security charges month to month. In common contingencies is 24.10% of the worker’s common contingency base.
- Contigencias profesionales y conceptos de recaudacíon (Contribution base for professional contingencies and joint collection):
This amount is calculated by adding the BCCC + the value of overtime hours. This is the contribution base used to calculate the percentage of the base of accidents at work, unemployment, professional training and Salary Guarantee Fund (FOGASA).
- AT & EP (Employer contribution):
each company provides, according to the employee.
- Desempleo (Unemployment):
5.5% of the worker’s BCCC if the worker has a fixed contract or 6.7% if the worker has a temporary contract.
- Formaccion Professional (In vocational training):
This is the contribution used for employee’s training to professionally prepare for a job. This is 0.6% of the worker’s BCCC.
- Fondo Garantía salarial (In salary guarantee fund):
0.2% of the worker’s contingency contribution base.
- Cotización adicional horas extraordinarias (Extra overtime quote)
- Bonificaciones / reducciones (Bonuses and reductions)
- Base sujeta a retención del IRPF (Base subject to income tax IRPF):
To calculate this contribution base, the total accrued is taken and the exempt amounts of IRPF are subtracted, such as allowances, compensation or products that belong to flexible compensation plans.
How can we help you?
The Spanish payslip can be a hard one to figure out. Parakar has years of experience in creating payslips. We know how to deal with complex processes and we can create the payslips for your employees compliant to Spanish regulations.
Can we help you with employment management in Spain? Or do you have any questions concerning the payslip you received? Our experts are happy to talk to you!