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Payroll taxes in Spain.

Learn about payroll taxes in Spain thanks to Horizons’ up-to-date guide.

Horizons is where real, local hiring expertise meets world-class customer service. Quickly and compliantly hire employees in more than 150 countries worldwide, without the need to open a local entity.

What is the average employer tax rate in Spain?

The corporate tax rate is 25%, but some companies may be liable for additional taxes depending on their specific situation. There are both national and municipal-level taxes that may be due.

What is the average employee tax rate in Spain?

In Spain, employees are taxed progressively. The tax rates as of 01 Jan 2021 on yearly income are: 

  • 0 – 12,450 → 19% 
  • 12,451 – 20,200 → 24% 
  • 20,201 – 35,200 → 30% 
  • 35,201 – 60,000 → 37% 
  • 60,000 and above → 45%

The average net tax rate for a single worker in 2021 was 21.1%.

Employer contributions in Spain

Employers must contribute towards social insurance schemes, and these contributions total roughly 30% of each employee’s salary, with an upper limit of slightly above €3,500.

Employee contributions in Spain

The average employee contribution to social security in Spain is 6.35% (as of Jan 2021). This can vary based on the type of employment contract.

Frequently asked questions

The Spanish tax bureau is called the “Agencia Estatal de Administración Tributaria“, or the AEAT. In English it can be called the Spanish Tax Administration Agency. 

There is no employer payroll tax contribution in Spain. 

There are other necessary contributions (and a 25% corporate tax rate), but payroll tax is not one of them.

Payroll tax in Spain is tax that comes out of the employee’s salary every month. The employer will withhold the correct amount on behalf of the employee.

Spain’s payroll tax system is progressive, ranging from 19% – 45% for individuals, depending on several factors including the employee’s annual income and in which region the employee resides. 

There is a 25% corporate tax rate.

Employers must also pay into social security; the most typical contribution breakdown is 23.6% for employers and 4.7% for employees.

There is also a contribution to the unemployment fund in Spain. The unemployment contribution rate for employers is usually 5.5%; the rate for employees is 1.55%.

Employers must also pay into the Salary Guarantee Fund (Fondo de Garantía Salarial, FOGASA) at a rate of 0.2%.

Finally, employers also pay into a vocational training contribution at a rate of 0.6%. The rate for employees is 0.1%.

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