Spain has become one of Europe’s most attractive destinations for business expansion. With a strong economy, skilled multilingual workforce, and competitive labor costs, hiring in Spain presents excellent opportunities in 2025. However, navigating Spanish labor laws, payroll regulations, and HR compliance can be challenging—especially for companies without a local entity.
This is where a Professional Employer Organization (PEO) or Employer of Record (EOR) becomes a game-changer. By using a PEO in Spain, you can hire in Spain efficiently, manage teams compliantly, and streamline payroll—without the cost or complexity of establishing a local subsidiary.
Table of Contents
- What Is a PEO in Spain
- PEO vs EOR in Spain – What’s the Difference
- Why Use a PEO in Spain Instead of Setting Up an Entity
- Simplify Global Compliance
- Key Employment Insights in Spain
- No Entity? No Problem
- How a PEO Helps With Payroll, Tax & Benefits in Spain
- Spanish Labor Laws Made Simple With a PEO
- When to Choose a PEO Over Other Hiring Models
- What to Look for in a Spanish PEO Partner
- Asanify’s Advantage as a PEO in Spain
- What Does It Cost to Build a Team in Spain
- Ready to Hire in Spain? Here’s What to Do Next
- FAQs
What Is a PEO in Spain?
A PEO in Spain is a partner that helps companies manage Human Resource Management functions locally while ensuring compliance with Spanish employment laws. Acting as a co-employer, a PEO like Asanify handles:
- Payroll processing & Payroll Managing
- Salary payments and compliance with Spanish tax law
- Statutory and supplementary benefits administration
- Drafting and maintaining HR contracts and documentation
- Filing and reporting with Spanish authorities
- Contractor Management solutions for freelancers and consultants
This model is particularly useful for startups, SMEs, and fast-scaling businesses that want to hire in Spain without the heavy investment of forming a local entity.
With Asanify PEO services, you can employ professionals across Spain and in 160+ countries. Your employees are paid compliantly, receive market-aligned benefits, and remain fully protected under Spanish labor laws—while you maintain operational control of their work.
PEO vs EOR in Spain – What’s the Difference?
Understanding the difference between a PEO and an Employer of Record (EOR) in Spain is crucial when selecting the right hiring approach. Both models allow you to hire in Spain without managing everything internally, but they work differently. A PEO partners with your local entity to co-manage HR and payroll, whereas an EOR becomes the legal employer in Spain, taking full responsibility for contracts, compliance, and payroll—even if you don’t have an entity.
| Feature | PEO in Spain | EOR in Spain |
| Legal Employer | Client (shared employer) | EOR provider (full legal employer) |
| Entity Requirement | Requires local entity | No entity required |
| Payroll & HR | Managed jointly with client | Fully managed by EOR |
| Best For | Companies with entity | Startups testing market |
| Immigration & Visas | Handled by client | Managed by EOR |
| Contracts | Client controls contracts | EOR issues compliant contracts |
| Switching to Entity | Already in place | Easy migration supported |
Suggested Read: A Detailed Guide on Employer of Record Spain 2025
Why Use a PEO in Spain Instead of Setting Up an Entity?
Partnering with a PEO in Spain gives fast-growing businesses a competitive advantage by unlocking compliance expertise, cost efficiencies, and scalability. With Asanify, you gain a compliant and agile way to hire, onboard, and manage employees in Spain without establishing a local entity.
Hire Top Talent in Spain
Spain offers a rich talent pool across IT, finance, manufacturing, and services. With Asanify, you can hire in Spain quickly, avoiding entity setup delays.
- Access professionals in Madrid, Barcelona, and Valencia
- Skip bureaucratic hurdles
- Offer competitive and compliant pay packages
Build Your Global Employer Brand
International employees value companies that align with local HR standards. Asanify ensures you offer fair benefits and transparent contracts.
- Provide benefits tailored to Spanish employees
- Stay compliant with working time laws
- Use a Salary Calculator to benchmark salaries competitively
Reduce HR and Legal Overhead
Setting up in Spain means dealing with lawyers, tax advisors, and HR managers. With a PEO, you avoid these costs.
- Save on entity formation and HR staffing
- Prevent payroll mismanagement
- Simplify compliance monitoring
Test & Expand Into New Markets
If you’re exploring Spain, a PEO lets you scale flexibly without infrastructure.
- Hire one or many employees with ease
- Expand across Spanish regions
- Transition smoothly to a local entity later
Simplify Global Compliance
Spain’s employment laws are detailed and highly regulated. With Asanify, you get peace of mind that all HR, payroll, and tax requirements are fully met.
- Stay aligned with Spain’s 40-hour workweek and overtime laws
- Ensure compliance with vacation, sick leave, public holidays, and parental benefits
- Rely on local HR and legal experts for filings, audits, and inspections
Key Employment Insights in Spain
Payroll Processing & Contributions
- Payroll processed monthly
- Employer social security contributions: ~29.9%
- Employee social security contributions: ~6.35%
Leave Policies
- 14 public holidays per year
- Minimum 22 paid vacation days annually
- Sick leave: covered jointly by employer and social security
- Maternity leave: 16 weeks (can be extended)
- Paternity leave: 16 weeks fully paid
Bonuses & Benefits
- 13th and 14th-month salary payments are common
- Meal vouchers, health insurance, and transportation perks offered
Income Tax (2025)
- 19% up to €12,450
- 24% for €12,450–€20,200
- 30% for €20,200–€35,200
- 37% for €35,200–€60,000
- 45% above €60,000
Cultural Alignment and Professional Etiquette
- Strong emphasis on punctuality and respect in the workplace
- Business often conducted with formality but relationship-driven
- Spanish and regional languages (Catalan, Basque, Galician) valued alongside English
No Entity? No Problem
With Asanify as your PEO in Spain, you don’t need to open a local entity. We serve as your compliance partner, ensuring employment laws are followed while you focus on scaling.
- Start hiring in days, not months
- Avoid risks of contractor misclassification
- Grow your Spanish workforce at reduced cost
How a PEO Helps With Payroll, Tax & Benefits in Spain
A PEO in Spain manages payroll and compliance seamlessly:
- Monthly payroll processing and payroll managing
- Gross-to-net salary calculations
- Social security and tax contributions
- Benefits like health plans, transport, and 13th/14th salary payments
Spanish Labor Laws Made Simple With a PEO
Spain’s labor laws can be complex for foreign companies. A PEO in Spain ensures smooth compliance with:
- Working hours: 40-hour week with regulated overtime
- Probation periods: Up to 6 months (role-dependent)
- Paid leave: 22 days plus 14 public holidays
- Termination rules: Notice and severance vary by tenure
- Union agreements: Compliance with collective bargaining rules
When to Choose a PEO Over Other Hiring Models
A PEO in Spain is ideal if you:
- Want to test the Spanish market before committing to an entity
- Need to hire quickly for small or pilot teams
- Require flexible HR and payroll support while scaling
- Want to reduce overhead while ensuring compliance
What to Look for in a Spanish PEO Partner
When selecting a PEO in Spain, consider these:
- Strong knowledge of Spanish labor law and compliance
- Speed and ease of onboarding
- Transparent, predictable pricing
- Reliable compliance and risk frameworks
- Digital-first Human Resource Management and payroll automation
- Visa, work permit, and contractor management expertise
Asanify’s Advantage as a PEO in Spain
Asanify combines automation with compliance expertise:
- Onboarding in under 48 hours
- Automated payroll with Salary Calculator tools
- Real-time compliance monitoring
- Local HR and legal advisors across Spain
- Transparent pricing, scalable services
What Does It Cost to Build a Team in Spain?
Companies generally choose between:
- Setting up a local entity in Spain, or
- Partnering with a PEO such as Asanify.
Option 1: Setting Up a Local Entity in Spain
- Requires Articles of Association, company registry filing, Spanish bank account, ZEC/tax registration, and HR compliance setup
- Timeline: 6–12 weeks
- Investment: €10,000–€25,000+ upfront
- Best for large, long-term expansions
Option 2: Hiring Through a PEO in Spain
- No entity required
- Onboard employees in days
- Includes payroll, contracts, benefits, and HR support
- Contractor management and compliance included
Indicative Monthly Pricing (2025):
| Service Type | Starting From (Per Employee/Month) |
| PEO Solution | $49 USD |
| Employer of Record | $199 USD |
Why Choose a PEO in Spain?
- Hire in days, not months
- Avoid upfront entity setup costs
- Reduce compliance risks with local expertise
- Focus on business growth while we handle HR and payroll
Suggested Read: Understanding Labour Laws in Spain 2025: Complete Guide
Ready to Hire in Spain? Here’s What to Do Next
Hiring in Spain is easy with the right partner. Book a free consultation with Asanify PEO to discuss your hiring strategy. We’ll guide you through our hiring compliance checklist and ensure smooth onboarding.
With Asanify’s automated platform, you can manage payroll, HR, and employee benefits within a week. You’ll also gain access to contractor management solutions and salary benchmarking with our Salary Calculator everything needed to scale your workforce in Spain confidently.
FAQs
A Professional Employer Organization (PEO) in Spain co-employs your team and manages payroll processing, HR compliance, taxes, and benefits through your local entity.
A PEO lets you hire in Spain quickly while handling payroll, contracts, and compliance so you can focus on operations.
You reduce HR overhead, streamline payroll managing, and ensure full compliance with Spanish employment law.
A PEO requires a local entity and shares HR duties, while an EOR is the legal employer and eliminates the need for a local setup.
Yes, Asanify’s contractor management solutions ensure freelancers are legally engaged and paid compliantly.
Yes, PEOs handle monthly payroll processing, salary calculations, deductions, and social security contributions.
Local expertise, transparent pricing, digital HR tools, and strong compliance support.
Yes, a good PEO provides full support when transitioning from co-employment to a standalone entity.
Most PEOs onboard employees within one week, making expansion fast and simple.
Yes, Asanify provides a Salary Calculator to design compliant and competitive pay packages.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
