Employment termination in
Spain

SALARY PAYMENT IN Euro (EUR, €)

CONTRACT LANGUAGES Spanish / English

PAYROLL TAX 29.90%

PAYROLL CYCLE Monthly

TIME TO HIRE 12 hours
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Horizons-owned entity with local country experts in Madrid & Barcelona.

We offer fair, scalable, and transparent pricing on Spain PEO service. Contact us for a cost breakdown

End service in Spain with no additional penalties or fees.

Including vision & dental, necessary for Spain.

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Spain

Valid reasons to terminate employment in Spain

Business-related reason (economical, technical, or organizational cause), such as:
- Changes in the means or instruments of production
- Changes in the systems and working methods of the staff
Individual-related reason (unexpected incompetence / inability to adapt)
Reason validly stated in the contract (unless related to abuse)
Mutual agreement (with a written agreement between the employer and employee)

There are also a number of situations classed as ‘extraordinary’ reasons for dismissal. These can be divided into two categories: reasons relating to the employee, and reasons relating to the employer.

1. Reasons relating to the employer:

Just cause:
- Substantial changes in working conditions
- Non-payment or continuous delay in pay
- Serious breach of obligations by employer

2. Reasons relating to the employee:

Reason “disciplinary dismissal”
- Repeated and unjustified absence or lateness
- Indiscipline or disobedience
- Verbal or physical offenses to employer
- Breach of trust in the performance of work
- Continuous and voluntary decrease in performance
- Habitual drunkenness or drug addiction (if having an impact on work)
- Harassment or discrimination

Unfair reasons to terminate employment in Spain

In Spain, any dismissals, outside of probation period, that don’t have a valid reason (detailed above) is classed as unfair dismissal.

Dismissal procedure in Spain

When dismissing an employee in Spain (outside of their probation period), employers must provide written notice. This can be sent by email or via standard mail and you must receive receipt confirmation. You must also pay all applicable compensation at the time you issue written notice.

Resignation procedure in Spain

Employees must provide written notice of their resignation. As mentioned in the notice period section, an employee must give a minimum 15 calendar days’ notice when resigning.

Hiring in Spain, Made Easy

Your business can easily hire employees in Spain without opening a local entity.

We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

Is it difficult to terminate employment in Spain?

Spain is not offer at-will termination options to employers. If an employer needs to terminate an employee, there must be legal grounds for the termination.

In cases of unfair dismissal in Spain, the severance payment increases by more than 30% to 33 days of pay per year of service by the employee, and the employee can formally request to be rehired.

What are the risks of terminating employment in Spain, and how do I mitigate them?

If you must terminate employment in Spain, it is recommended that you have grounds for termination. In cases of unfair dismissal, the severance payment is higher, and the dismissed employee can petition to be rehired.

In case where an employer wants to terminate a protected class of employee (e.g. pregnant employees, employees on parental leave, and those who have taken parental leave within the last year), it is nearly impossible to do so.

You can mitigate termination risks by partnering with a firm like Horizons, who has employment experts on the ground in Spain and can advise you on best practices in cases of employment termination.

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