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Salary Tax & Social Security Spain
Salary withholding tax Spain
In Spain the employer must withhold wage tax and pay it to the tax authorities on a regular basis. SMEs must pay wage tax on a quarterly basis, large companies on a monthly basis.
The deductions from the salaries are adjusted in such a way that, if there are no special or other issues, the employee does not have to request a refund at his annual return and does not have to pay extra taxes.
If the salary recipient is ‘non-resident’, a fixed deduction of 19% must be applied. For non-residents outside the European Union a rate of 24% applies
Social security contributions Spain
Social security contributions must be paid monthly in Spain.
In Spain social security contributions are levied as a percentage of the gross salary. The vast majority, about 31% of the gross salary, is borne by the employer. Approximately 6% is charged to the gross salary of the employee. The total of social security contributions is therefore approximately 37% of the gross wage.
Depending on various factors, the deductions may be a few tenths of a percent higher or lower.
The upper limit is approximately 45,000 euros. This means that no social security contributions are payable on both the gross salary and the employer and the employee.
The payments of both the payroll tax and the social security contributions must be accurate on the eurocent, otherwise messages and fines from the authorities will follow automatically.
This is not a problem in practice, the software of the payroll administrators is geared to this. As a result, the payments of taxes and social security contributions will go ‘automatically’.
Salary administration Spain
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