How to Hire Remote Employees In 


The Basics

Euro (EUR)
Employer Taxes
Payroll Frequency
Official Language

Employment in 


Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Time savings: Hiring through a subsidiary or EOR can take months of onerous paperwork and legal wrangling. This is only multiplied if you want to hire in multiple countries.
Reduced overhead: You can save tens of thousands of dollars in onboarding costs by hiring through a company like Panther. You also have fewer responsibilities to provide benefits, further reducing overhead.
Greater flexibility: Contractors can be brought on as-needed. If they are not a good fit, you can choose not to renew them without incurring significant additional termination costs.
Reduced legal risk: Contractors generally don't have the host of legal protections that typically cover full-time employees.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: While it's important to understand local contractor law, for most firms, misclassification risk is minimal.
Lack of Control: For a worker to be classified as a contractor, they should be allowed to work independently on their assigned tasks. Hiring full-time employees offers a wider range of management options.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.

Set up a subsidiary in 


A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Spain can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in  Spain, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for  Spain.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in  Spain is not the same as paying workers in your own country. Employees have to be paid using  Spain's employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.


 Specific Information

Working Hours

Full -time employment is considered 40 hours weekly, and 8 hours daily.


Overtime policy is usually covered by Collective Agreements. The guidelines set out by law are that overtime hours should not exceed 80 hours per year.  

Overtime can be compensated by paying a higher amount than the employee salary or by replacing the hours with an equivalent paid rest period.

Payroll Tax



  • Social Security
  • Unemployment
  • Salary Guarantee Fund
  • Professional Training


  • 0-12,450 - 19.00%
  • 60,000 and above - 45.00%

Minimum Wage

The monthly minimum wage is 950 EUR for full-time employees or 7.04 EUR per hour.


Pay Cycle

Employees are paid monthly by the last day of the month.

13th Salary

The 13th and 14th salaries are mandatory in Spain and are usually pro-rated over 12 payments, however, it varies depending on the company’s collective agreement.

Many collective agreements do include 13th and 14th salaries.


Paid Time Off (PTO)

Paid time off is at least 30 calendar days.  

Employees are entitled to an uninterrupted rest period of at least one and a half days per week.

As a general rule, this must include Sunday.

Public Holidays

Each province in Spain has a different number of public holidays, but do not exceed 14 in total. 

Out of these 14, there are 9 national holidays.

Sick Days

Sick leave is as follows:

  • The first 3 days of sick leave are unpaid.
  • From the 4th to the 15th day, the employee is entitled to 60% of the contribution base of the previous month and is paid by the employer.
  • From the 16th to the 20th day, the employee is entitled to 60% of the contribution base of the previous month and is paid by the employer, who can then deduct the amount from the social security mandatory payment.
  • From the 21st day onwards, the employee is entitled to 75% of the contribution base of the previous month and is paid by the employer, who can then deduct the amount from the social security mandatory payment.
  • Employees can take sick leave for up to one year and under unique circumstances could extend it to 180 days.
  • When the employee is injured at work- The employee will be entitled to 75% of the contribution base of the previous month’s salary. It is paid by the employer, who can then deduct the amount from the social security mandatory payment.

Maternity Leave

Mothers are entitled to 16 weeks’ maternity leave.  The leave can begin up to 4 weeks before the expected due date and at least 6 weeks must be taken immediately after the birth of the child.

During maternity leave, the employee is not paid their salary, but rather, a maternity benefit. The maternity benefit is calculated based on the previous month’s contribution (including monthly salary and the proportional part of the extra pay) and is paid by social security.

The maternity benefit is capped at 4,070 EUR per month. If the employee’s salary is generally higher than this amount, the employer can decide to pay the difference, however, this is not mandatory.

Paternity Leave

Fathers are entitled to 16 weeks of paid paternity leave.

The first 6 weeks must be taken immediately after the birth of the child. leave can be extended by two weeks in the case of multiple births.

All 16 weeks are 100% paid by the state.

Parental Leave

Employees have the right of leave up to three years to attend to the care of each child, whether natural, adopted or being fostered permanently or as pre-adoptive measures.

Females workers have the right to one hour of absence from work each day to breastfeed an infant of less than nine months. This can be divided into two half-hour periods.

January 1, 2020, leave will be extended to 16 weeks, the first 6 without interruption.

Neither of the parents may will be able to transfer this right to the other.

Other Leave

Adoption Leave: 6 weeks compulsory and uninterrupted leave for both partners. 16 unpaid weeks in total can be shared between both parents. A maximum of 10 weeks can be taken by one with the remaining 6 weeks being taken by the partner.

Serious illness or injury of family member: 2 days (4 days if travel is required). 

Moving: 1 day for moving to a new house.  

Marriage Leave

Marriage: 15 calendar days 

Bereavement Leave

Bereavement: 2 days (4 days if travel is required) for the death of a family member.   


Termination Process

The end of a temporary contract – the worker is given notice as established in the collective agreement/employment contract. The employee is entitled to the proportional part of extra pay and holidays as well as the compensation of 12 days’ salary per year worked. 

Voluntary termination by the employee – the employee must give notice to the company with the notice established in the collective agreement.  On their last day the company will pay the amounts corresponding to the payroll and termination.


a) Disciplinary–there is no notice and the final payroll is paid on the day of dismissal, without compensation, delivering the letter with the reasons for which the dismissal is made. 

b) For objective reasons–the amount corresponding to 20 days of salary for each year worked is paid to the worker 15 days before the end date including a letter with the reasons for the dismissal.

Notice Period

Employers should provide 15 days of notice, and if notice isn’t given, payment in lieu shall be given.

Severance Pay

Employers should pay 20 days of salary pay per year of service up to 12 months.

If the dismissal is declared unfair (a dismissal without cause) by a judge, the employer may reinstate the employee or pay a statutory severance payment.

Employees affected by a redundancy will be entitled to receive a legal severance payment and an advance notice in writing of the termination of the contract.

A worker who is dismissed for disciplinary reasons is not entitled to severance pay.

Probation Period

It varies depending on the Collective Agreement in place at the company.

The common practice is two months, graduate technicians are usually for a 6 month period.