25 May 2020
Paysend’s guide to working in Spain
Thinking about moving to Spain for work? This guide will provide you with all the information you need to know about the types of available jobs in Spain, wage expectations and the minimum wage, and taxes. We hope that after reading it, you’ll be able to make a decision about whether a life in the Spanish sun is right for you!
Work permits in Spain
Do I need a work permit to work in Spain?
If you’re an EU national, you won’t require a permit to live or work in Spain. Expats from outside of the EU, however, will need to apply for a permit. This process can only begin once you’ve already secured a job. When you’ve obtained a contract of employment, your employer will begin the application on your behalf. They’ll send off your information to the Spanish Ministry of Labour (Delegación Provincial del Ministerio de Trabajo e Inmigración).
You’ll then be given a copy of your work permit application. This is an important document that’s required for you to apply for a visa to live and work in Spain – see our guide on moving to Spain (LINK) for more information on this.
The application process
As a non-EU national, the success of your application depends on two factors: the type of job you’ve secured and the other potential applicants. If you’ve managed to get a job where there’s a shortage (a career with lots of vacancies in Spain), then you should have little trouble obtaining a work permit. You can check which types of career are recognised as shortage occupations using the resource provided by the Spanish Ministry of Labour, Migrations and Social Security.
Shortage occupations often include medical professionals, mechanics, engineers, IT workers, teachers, business people, and tourism industry workers. In cases where the job you’ve secured is not listed as a shortage occupation, you will be granted a work permit as long as there are no Spanish or EU-national applicants for the same position.
Types of jobs available in Spain
Spain is a service economy, meaning that many of the jobs you will find in Spain are in the service sector. The job market in Spain is dominated by the telecommunications, tourism, banking, electricity, and automobile industries.
Whilst these industries are strong in Spain, many applicants will be Spanish citizens and the work permit regulations can make it very difficult for non-EU nationals to get jobs in these fields. Even expats from EU countries may struggle, given that unemployment in Spain is at 14% - one of the highest unemployment rates in Europe.
That said, don’t let the Spanish unemployment statistics put you off! With the right skills and experience, expats from the EU will be able to stand out from the crowd during the application process. There are plenty of major employers in Spain that are always looking for new talent – Banco Santander, Telefónica and Inditex are just a few well-known companies based in Spain. However, many of these Spanish companies don’t employ workers in shortage occupations. If you’re not from the EU, then it’s advisable to seek employment in a shortage occupation when moving to Spain (see above in this guide for more information on this).
Spanish wages and the minimum wage in Spain
Unlike other countries, the minimum wage in Spain, or SMI (Salario Mínimo Interprofesional), stays the same regardless of age or type of employment contract. The minimum wage in Spain is set by the government every year and takes into account statistics such as the unemployment rate and national productivity levels. In 2019, the minimum wage was increased by an unusual margin: all workers in Spain can now expect to earn at least €12,600, up from €10,304 last year.
According to Spain’s institute for statistics (INE), the average wage in Spain is currently €23,000. However, it’s more useful to have a detailed breakdown of the average salaries for different jobs in Spain. Salary Explorer provides the average monthly wages for a range of sectors in the country.
Tax in Spain
You need to understand tax in Spain If you plan to live and work in the country. After six months of living in Spain, you will be classed as a Spanish resident and will have to pay taxes. This involves submitting an annual Spanish tax return and paying income tax on your worldwide income, not just money that you earn whilst in Spain. You will have to pay income tax if:
- It’s your first year of tax residency in Spain;
- You earn more than €22,000 per year;
- You receive more than €1,000 per year in rental income;
- You are self-employed or own a business;
- You have an annual saving and capital gains income of more than €1,600.
Income tax rates in Spain
You only have to pay tax in Spain on income after deductions based on contributions to professional costs, pension, social security, and personal allowance. You can also deduct money from your income tax based on the number of children under 25 living in your home: for one child, you can deduct €2,400; with two children, €2,700 will be deducted; households with three children can deduct €4,000, and with four or more children you can deduct €4,500.
Spanish income tax is known as Impuesto de Renta sobre las Personas Fisicas (IRPF). The organisation of taxes in Spain is shared between state and regional governmental bodies, so each of the 17 Spanish regions sets its own tax rates. As a result, the tax rates you have to pay may vary depending on your location in Spain. According to Blevins Franks, the income tax rates in popular regions of Spain are as follows:
- In Andalucía, incomes up to €12,450 are taxed at 19.5% – this increases up to 48% for incomes over €120,000;
- In Islas Baleares, incomes up to €10,000 are taxed at 19% – this increases up to 47.5% for incomes over €175,000;
- In Islas Canarias, incomes up to €12,450 are taxed at 19% – this increases up to 46.5% for incomes over €90,000;
- In Cataluña, incomes up to €12,450 are taxed at 21.5% – this increases up to 48% for incomes over €175,000;
- In Comunidad Valenciana, incomes up to €12,450 are taxed at 21.5% – this increases up to 48% for incomes over €175,000;
- In Madrid, incomes up to €12,450 are taxed at 19% – this increases up to 43.5% for incomes over €60,000;
- In Murcia, incomes up to €12,450 are taxed at 19.5% – this increases up to 46% for incomes over €60,000.
Paying income tax in Spain
You must file your tax returns and pay your income tax for the previous year by 30th June. This can be done directly in your local tax office or online – to file your tax return online, visit Renta Web. First, you’ll need to register for the Cl@ve PIN system. This will provide you with two codes that ensure the security of your online tax returns. You choose your Cl@ve code when you register; the other code will be sent to your phone.
Sending and receiving money when you’re in Spain
If you do decide to move to Spain, you’ll probably need to regularly send and receive money between your Spanish bank account and an account in your home country - whether this is your own account or that of a friend or family member.
Paysend is an online transfer platform that lets users send money to over 80 countries fast, and with very low fees. Take a look at how much you could save on your money transfers by heading to our homepage.