Expanding into Spain is exciting — until you realize that hiring employees in Spain comes with a web of labor law obligations, mandatory social contributions, contract formalities, and cultural expectations that are genuinely different from what you're used to in the US, UK, or elsewhere. Without a local HR team or employment lawyer on day one, it's easy to make expensive mistakes before your first hire even starts work.
Understand the Employment Framework Before You Post a Single Job
Spain operates under a heavily regulated labor market governed by the Estatuto de los Trabajadores (Workers' Statute). Unlike at-will employment in the US, Spanish employees have strong protections from the moment they sign a contract. Key things to internalize early:
- Dismissal is rarely simple. Terminating an employee requires documented cause (disciplinary or objective) or a formal redundancy process, often with severance obligations.
- Collective bargaining agreements (convenios colectivos) may apply to your industry automatically, whether you've read them or not. These set minimum salaries, working hours, vacation entitlements, and more — on top of statutory minimums.
- Probation periods are allowed but must be specified in the contract and vary by role and sector (commonly 6 months for qualified technical roles, shorter for others).
If you're not sure which convenio applies to your startup, a local employment lawyer for a one-off consultation is money well spent before you draft anything.
Get Your Legal Structure Right First
You can't legally hire in Spain without a presence there. Your main options:
- Sociedad Limitada (SL): The standard limited company equivalent. Takes weeks to incorporate, requires a notary, and involves real administrative overhead.
- Employer of Record (EOR): A third-party company employs your staff legally in Spain while they work for you. Faster to start, higher per-employee cost, but removes compliance burden.
- Freelance (autónomo) contracts: Useful for genuine contractors, but Spain's Social Security authorities scrutinize these relationships closely. If the person works like an employee, they'll likely be classified as one.
For a seed-stage team hiring one or two people, an EOR often makes more sense than incorporating immediately. As headcount grows, a local SL usually becomes cost-effective.
Contracts, Social Security, and What You're Actually Paying
Every employee must have a written contract registered with the public employment service. Indefinite contracts (contrato indefinido) are strongly favored by labor law and government policy — fixed-term contracts are now much harder to justify after 2022 labor reforms.
On top of gross salary, plan for significant employer social security contributions. The total employer burden on top of a salary is substantial — roughly in the 30%+ range covering pensions, unemployment, healthcare, and other funds. Budget for this from day one; it surprises many founders.
The national minimum wage (Salario Mínimo Interprofesional, SMI) changes periodically. Check the current figure at sepe.es — Spain's official public employment service — before you finalize any offer.
Where to Find Talent in Spain
Spain has strong engineering and product talent pools, particularly in:
- Madrid and Barcelona — the dominant tech hubs, with higher salary expectations and more competition for senior profiles
- Valencia, Málaga, and Bilbao — growing scenes with lower cost of living, often attractive to remote-friendly candidates
- Remote-first candidates across the country, especially since 2020 normalized distributed work
LinkedIn remains dominant for professional hiring. InfoJobs is widely used for operational and non-tech roles. For technical talent, local communities like Meetup groups, Slack communities, and university partnerships (especially UPM, UPC, and UPF for tech) can surface strong candidates who aren't actively applying.
Screening and Hiring Without an HR Team
This is where things slow down for lean startups — writing job descriptions, managing applications, conducting structured interviews, and staying on top of candidates across roles. Penroll is built specifically for this: it uses AI to help small founding teams run a structured, bias-reduced hiring process without needing a recruiter or HR coordinator, covering everything from job post drafting to candidate scoring and interview question generation.
Structured interviews matter in Spain, where candidates expect a professional, respectful process. Ghosting applicants damages your employer brand in a market where word travels fast.
Onboarding Compliance You Can't Skip
Once someone signs, your obligations begin immediately:
- Register the employee with Social Security before their first day
- Register the contract with the SEPE within 10 days of signing
- Provide a payslip (nómina) every month — these must follow a specific format
- Grant the legally required 22 working days of paid annual leave (minimum)
- Ensure any remote work arrangement follows Spain's remote work law if the employee works from home more than 30% of the time
Spain rewards founders who take compliance seriously from the start. Retroactive fixes are expensive and time-consuming.
Getting your first hire in Spain right sets the tone for everything that follows — your legal standing, your employer brand, and your team culture. If you want to see how a lean team can run a professional hiring process without an HR department, see Penroll's live demo — no signup.