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If you want to launch your entrepreneurial project in Spain, it’s important you know which charges you need to pay. Everyone who works in a company, employer or employee, must declare and pay social security contributions. These costs have varied implications: illness, maternity, disability, death and family allowances.

All you need to know about these contributions

Pour chaque lancement d’activité en Espagne, l’employeur doit solliciter son inscription auprès de la Tesoreria General de la Seguridad Social (TGSS) où se situe l’entreprise. Dans le cas où l’employeur débute une activité professionnelle et embauche des salariés, il devra également effectuer leur inscription. Le début d’activité entraine l’obligation de cotiser qui se prolonge tant que cette activité dure, même dans les situations d’incapacité temporaire du travailleur. Pour toute fin ou renouvellement d’activité, le salarié est tenu d’informer la TGSS. En revanche, la non-communication de l’arrêt d’activité n’empêche pas au salarié de cotiser, bien qu’il y ait eu cessation du travail. Toutes les cotisations sont versées dans la limite d'un plafond mensuel ou journalier. Les régimes spéciaux, les bases de cotisations et les taux applicables varient en fonction du régime. Lorsqu’il s’agit des travailleurs indépendants, ces derniers ont la possibilité de choisir leur assiette mensuelle de cotisations, qui varie entre un minimum de 875,70€ et un maximum de 3,597€. Le taux de cotisation dans ce régime est de 29,8%. En revanche, lorsque le travailleur indépendant n’a pas opté pour la protection pour incapacité temporaire, le taux de cotisation sera de 26,5 %.

Who pays payroll taxes?

A Spanish tax resident and a business manager pay employer contributions which are made monthly to the TGSS to which the company belongs. There is a fixed amount set at 255.86 Euros per month which does not vary according to income. The employer’s share in the payment of social security contributions in Spain rises to 30.60%. The Spanish tax system is therefore a real plus for those looking to start a company.

What is the rate of payroll expenses?

Anyone carrying out any type of business activity should, in theory, be affiliated with Social Security in order to quality for protection in the event of illness, occupational accident, pension or unemployment. In this regard, the employer must, every month, declare to the TGSS the remuneration paid to its employees and the exact number of hours worked. The contribution amount is calculated for each employee and the total amount of contributions (employee and employer) to pay is communicated to the employer. Social contributions payable by employees are directly deducted from their salary by their employer; this is a percentage of 4.7% of the gross salary.

Personal Income Tax for Residents (IRPF)

Spanish income tax varies between 24% and 52% and it is calculated based on income level and various other personal circumstances. At the end of the fiscal year, the tax return verifies whether the taxpayer was overtaxed, if so the State will compensate for it, or whether the taxpayer needs to pay the difference.

Payroll expenses for the manager

In Spain, anyone with a share in a company cannot be an employee, instead they become a manager. A manager in Spain pays monthly fixed charges ranging from 177.94 Euros and 255.86 Euros. If the manger is under 30 years old, he will have to pay just 50 Euros a month for the first six months and then 179.10 Euros for the next ten.

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