Payroll in Spain 2026: Social Security, IRPF and payslips

In Spain the employer withholds IRPF income tax and the employee's 6.50% Social Security share from each payslip, pays Social Security to the TGSS within the following month and the IRPF to the Agencia Tributaria with Modelo 111. On top of gross pay it contributes 30.65% plus the occupational-risk premium, 32.15% in total for office staff.

Payroll in Spain at a glance

Social Security contributions in 2026

The rates for 2026 are set by the General Social Security Act and Order PJC/297/2026. These are the rates for the Régimen General:

What to watch:

• The base is the monthly pay plus a twelfth of the payments made less often than monthly, so the two pagas extraordinarias are spread over the twelve months. It cannot be lower than the minimum for the employee's contribution group (€1,989.30 a month for group 1, €1,649.70 for group 2, €1,435.20 for group 3, €1,424.40 for groups 4 to 7 and €47.48 a day for groups 8 to 11) or higher than €5,101.20 a month.
• The MEI rises every year: 0.90% in 2026, 1% in 2027 (0.83% employer, 0.17% employee), 1.10% in 2028 and 1.20% from 2029.
• Solidarity contribution. Since 2025, pay above the €5,101.20 ceiling carries a cotización adicional de solidaridad. In 2026 it is 1.15% on the part up to 10% above the ceiling, 1.25% on the part from 10% to 50% above and 1.46% beyond that, split between employer and employee in the same proportion as common contingencies. The rates rise every year until 2045.
• Overtime carries its own contribution of 28.30% (23.60% employer, 4.70% employee), or 14% (12% and 2%) for overtime worked because of force majeure.
• Fixed-term contracts of less than 30 days carry an extra employer contribution of €33.62 in 2026, paid when the contract ends.
• AT/EP. The employer alone pays the occupational-risk premium, at the rate the official tariff sets for its activity code or for occupations such as office work.

IRPF withholding on salaries

The employer withholds IRPF at a rate (tipo de retención) worked out for each employee. The Agencia Tributaria publishes the procedure as a withholding algorithm and as an online calculator, the Servicio de Cálculo de Retenciones. For an active employee the steps are:

1. 1Take the expected annual pay and deduct the employee's Social Security contributions.
2. 2Deduct €2,000 of general expenses and the reduction for work income: €7,302 when net work income is up to €14,852, falling to zero at €19,747.50.
3. 3Apply the withholding scale below, then subtract the scale applied to the personal and family minimum (€5,550 for the taxpayer, more for age, children or disability).
4. 4Divide the result by the annual pay and truncate it to two decimals: that is the rate applied to every payment.

Limits built into the algorithm:

• No withholding when annual pay is not above €15,876 for a single employee without children; the limit is higher for other family situations.
• A 43% cap: where pay is up to €35,200, the withholding cannot exceed 43% of the difference between pay and that limit.
• A 2% minimum for contracts of less than a year.
• The rate is recalculated (regularización) when pay or the employee's circumstances change during the year.

Regional scales. The final IRPF combines the state scale (9.5% to 24.5%) with the scale approved by each autonomous community, so the same pay can be taxed differently from region to region. Withholding uses one national scale, and the annual return (declaración de la Renta) settles the difference. In that return low earners can also claim a deduction of up to €590.89 when their work income is up to €17,094, phasing out at €20,048.45; it does not affect withholding.

Minimum wage, working time and extra pay

• SMI 2026. Royal Decree 126/2026 sets the salario mínimo interprofesional at €40.70 a day or €1,221 a month, with effect from 1 January 2026, and never less than €17,094 a year. That is 14 payments of €1,221; spread over 12 months it is €1,424.50.
• Pagas extraordinarias. The Workers' Statute gives every employee two extra payments a year, one at Christmas and the other in the month set by the collective agreement, which also sets their amount. The agreement can provide for them to be prorated into the twelve monthly payments.
• Working time. The maximum ordinary working week is 40 hours of actual work, on average over the year. The company must keep a daily record of each employee's start and finish times and keep it for four years.
• Overtime. At most 80 hours a year. It is paid at the rate set by the collective agreement or contract, never less than an ordinary hour, or compensated with paid rest; without an agreement it must be compensated with rest within four months.

Monthly payroll calendar and filings

1. 1Before the first hire: register the company with the TGSS.
2. 2Every hire: request the employee's affiliation and registration (alta) with Social Security before the employee starts work, and no more than 60 days in advance.
3. 3Every month: contributions are settled through the Sistema RED under the Sistema de Liquidación Directa: the company or its authorised RED user sends the data, using a RED-compatible payroll program and the SILTRA application, and the TGSS calculates the contributions for each employee. The calculation must be requested by the penultimate day of the payment period, and payment is due within the month after the month the contributions relate to. Paying late costs a 10% surcharge in the first month after the deadline if the data were sent on time, and 20% after that.
4. 4Every payday: give each employee a payslip (recibo de salarios) in the official model, unless the collective agreement sets another, with earnings and deductions clearly separated. It must show the total Social Security contribution split into the employer's and the employee's parts, and come with a summary of the hours worked in the period, which is used to count overtime. Late payment of salary carries 10% interest.
5. 5Modelo 111: pay the IRPF withheld in the first 20 calendar days of April, July, October and January for the previous quarter; large companies file monthly, by the 20th of the following month.
6. 6Modelo 190: the annual summary of withholdings is filed in January (for 2025 the window ran from 1 January to 2 February 2026, see the AEAT deadlines), and each employee gets a withholding certificate.

Worked example: €2,000 a month in 14 payments

An office employee on a permanent contract, single, no children, under 65, with no other income, earning €2,000 gross a month in 14 payments (€28,000 a year), with the extra payments in June and December:

The employee's €151.67 is 4.70% (€109.67), 0.15% MEI (€3.50), 1.55% unemployment (€36.17) and 0.10% vocational training (€2.33) of the €2,333.33 base.

How the 15.58% is reached: €28,000 of pay minus €1,820.04 of Social Security is €26,179.96 of net work income, too high for the reduction for work income. Minus €2,000 of general expenses, the base is €24,179.96. The scale gives €4,225.50 on the first €20,200 plus 30% of €3,979.96 (€1,193.99), €5,419.49 in total; the scale on the €5,550 personal minimum is €1,054.50. The difference, €4,364.99, is 15.589% of €28,000, truncated to 15.58%.

In June and December the employee receives €4,000: Social Security stays at €151.67, because the extra payments are already in the monthly base, the IRPF is €623.20 and net pay is €3,225.13.

Common mistakes

1. 1Contributing on the monthly salary alone, without the twelfth of the pagas extraordinarias in the base.
2. 2Using the permanent-contract unemployment rate for a fixed-term contract, which is 6.70% for the employer and 1.60% for the employee.
3. 3Leaving the 2025 MEI rates in payroll (0.67% and 0.13%) instead of 0.75% and 0.15%.
4. 4Ignoring the solidarity contribution on pay above €5,101.20 a month.
5. 5Registering the employee after the first working day; the alta must come first.
6. 6Not updating the withholding rate when pay or family circumstances change.

How Clientlly helps

Clientlly ships a built-in payroll profile for Spain: the income-tax bands and allowance as modelled, the employee and employer contribution rates, the contribution ceiling and the minimum wage, checked against official sources in October 2026. It calculates gross to net and the employer contributions, produces payslips, and supports recurring payroll adjustments and imports of employees and payroll data; an administrator can adjust the rates in the payroll tax settings.

The profile models one employee in a primary job, single, without dependants, at national level, so regional rules, collective agreements and personal circumstances must be checked. Its IRPF calculation approximates the AEAT withholding algorithm, so check each employee's rate against the AEAT's official calculator.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and HR documents, and attendance and time tracking records working hours and overtime, which helps with the daily working-time record. To close the books after the payroll run, see our month-end close checklist.