Hiring employees in Spain is manageable, but employment law is considerably more detailed than in Germany. There are more types of contract, regionally varying Convenios Colectivos, and strict penalties when formal steps are missed. This guide takes you through the most important points so that you can hire on Mallorca in a legally compliant and plannable way.
Types of Contract in Spain
Since the labour market reform of 2022, the permanent position is the standard case. Fixed-term contracts are now only permitted for narrowly defined exceptions. The main contract types:
- Indefinido (permanent): Standard for every permanent position. Can be full-time or part-time. Probationary period according to the Convenio.
- Fijo discontinuo (permanent but seasonal): Classic in the hospitality sector on Mallorca. You employ staff seasonally (e.g. April to October), pay nothing in the off-season, but keep the employee on your books and call them back every year.
- Temporal por sustitucion: Cover for illness, maternity leave, or holiday. Maximum duration equals the absence of the person being covered.
- Temporal por circunstancias de la produccion: Fixed-term for production peaks, maximum 6 months (extendable to 12). Must be justified on factual grounds.
- Formacion en alternancia / Practica profesional: Apprenticeship or internship contracts with specific minimum conditions.
Which contract suits your business depends primarily on seasonality. On Mallorca, the Fijo discontinuo is often the better choice for hospitality and tourism, because it avoids the reform's penalty payments for re-hiring.
Tip
With every new person, first ask yourself: do I have a permanent need or a clearly defined season? The answer determines the contract type and therefore all subsequent steps.
Social Contributions and Payroll Costs
Spain has high payroll costs. As a rule of thumb: on top of every euro of gross wages, around 30 cents in employer contributions are added. Here is the breakdown for 2026:
| Item | Employer share | Employee share |
|---|---|---|
| General social security (Regimen General) | 23.60 percent | 4.70 percent |
| Unemployment insurance (indefinido) | 5.50 percent | 1.55 percent |
| FOGASA (insolvency protection) | 0.20 percent | 0 percent |
| Vocational training | 0.60 percent | 0.10 percent |
| Risk (AT/EP, industry-dependent) | 1.00 to 6.70 percent | 0 percent |
| MEI (Mecanismo de Equidad Intergeneracional) | 0.67 percent | 0.13 percent |
The contribution base is the Base de cotizacion, which is capped monthly both at the bottom and at the top (in 2026 roughly between 1,323 EUR and 4,909 EUR). Each employee therefore costs you between the minimum wage (SMI 2026, expected to be around 1,184 EUR gross times 14 payments) and an upper cap in social contributions per month.
Plan on top of the gross salary for:
- 14 monthly salaries per year (Pagas extras in July and December). Some Convenios allow "prorrateo", i.e. spreading these across 12 months.
- 30 days of minimum holiday per year.
- End-of-year bonuses and special payments depending on the Convenio.
Registration with the Seguridad Social
Before you hire anyone, you must be registered as an employer in the Sistema RED (Remision Electronica de Datos). This is done through the Tesoreria General de la Seguridad Social, usually through your Gestoria laboral. The process:
- Set up a CCC (Codigo de Cuenta de Cotizacion): The number under which your employees are filed. A separate CCC for each industry and, if applicable, each branch.
- Inscripcion de empresa: Register your business as an employer.
- Alta del trabajador: No later than 60 minutes before work begins, you must register the employee through the Sistema RED. Starting work before this counts as undeclared employment.
- Contract filing with the SEPE (contrat@): No later than 10 days after work begins.
- Medical examination (Reconocimiento medico): Compulsory in many industries, especially construction, hospitality, and care.
Warning
A missing or late Alta counts as an Infraccion muy grave. Fines start at 7,500 EUR per unregistered employee and can reach five-figure amounts for repeat offences. The Inspeccion de Trabajo is very active on Mallorca during the summer in tourist centres.
Probationary Period and Dismissal
The probationary period (periodo de prueba) must be stated in writing in the contract, otherwise it does not apply.
- Standard periods: 6 months for titulados (qualified professions with a degree), 2 months for others. Convenios may shorten these.
- Dismissal during probation: Either side can terminate without giving reasons, without severance pay, and without notice.
- Protection during pregnancy: Even during the probationary period, a dismissal may not be based on pregnancy, otherwise it is void.
After the probationary period, the regular dismissal rules apply:
- Despido por causas objetivas (economic, organisational, technical): 20 days' pay per year, capped at 12 monthly salaries, 15 days' notice.
- Despido disciplinario (conduct-related): No severance pay, but strict burden of proof. If the dismissal is rated as improcedente, you owe 33 days' pay per year (max. 24 monthly salaries).
- Despido improcedente: Settlement or court ruling. The court decides between reinstatement or severance pay.
- Despido nulo: Where fundamental rights or protected groups are violated (pregnancy, work-life balance). The consequence is always reinstatement plus back-pay.
Holiday and Public Holidays
In Spain, the minimum holiday entitlement is 30 calendar days per year (equivalent to 22 working days Monday to Friday). On top of that, there are 14 public holidays: 8 national, 4 regional (Balearic Islands), and 2 local (e.g. Sant Sebastia in Palma, Verge de la Salut in Andratx).
- Pagas extras: July and December, unless spread pro-rata.
- Permisos retribuidos: paid special leave days for marriage, birth, house move, bereavement. The Convenio can extend these.
- Reduccion de jornada: Parents can apply to reduce their hours until their child's 12th birthday.
When planning shifts during the season, make sure you have enough staff, as unused holiday must be paid out at the end of the year and many employees want to "catch up" on their holiday in winter.
Employment Law Specifics
Spanish employment law has a few peculiarities that often surprise people from Germany:
- Convenio Colectivo overrides the individual contract: If your contract is worse than the Convenio, the Convenio automatically applies. Make it easy for yourself: agree on everything above the Convenio minimum standard.
- Indemnizacion por finalizacion: Even for cleanly fixed-term contracts, you owe a severance payment of 12 days' pay per year at the end.
- FOGASA: Steps in at insolvency with capped amounts. It is not insurance that relieves you of liability, but a guarantee for your employees.
- Inspeccion de Trabajo: Very active. Anonymous complaints usually lead to on-site visits. Clean documentation of all contracts, working hours, and payslips is compulsory.
- Registro horario: Since 2019 you must record the working hours of every employee. Spreadsheets are sufficient, but digital tools such as Sesame, Bizneo, or the solutions from your payroll programme are better.
Anyone who wants to hire employees on Mallorca can hardly avoid a Gestoria laboral and specialist advice. The monthly flat fee (60 to 100 EUR per employee) is money well spent compared to the potential fines and legal costs. Combined with a clear contract model, clean payroll processing, and a solid understanding of the Convenio Colectivo, staffing in Spain runs in a plannable and reliably sustainable way.