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You pay salaries or freelancers' invoices with withholding

Paying an employee or a freelancer in Spain

Understand how gross pay becomes net pay, what is withheld on a payslip and on a freelancer's invoice and how that withholding is paid in; compute an employee's net salary from the gross, with contributions and income tax withholding, the benefit in kind of a company car, the statutory compensation when a contract ends or on dismissal, and the withholding on a freelancer's invoice; and file modelo 111, through which the withholding made on payslips and fees is paid in: 6 steps.

Start here: Running payroll and withholding tax in Spain

Understand: the payslip, withholding and paying it in with modelo 111

  1. Step 1 of 6
    CourseFree46 min

    Running payroll and withholding tax in Spain

    What a Spanish employer does when paying an employee or a freelancer. The payslip from gross to net: the worker's 2026 contributions, the IRPF withholding procedure and a company car as a benefit in kind. Then severance when a contract ends or on dismissal and its exempt part, the 15 % or 7 % withholding on a professional's invoice, and paying in everything withheld with modelo 111: deadlines, boxes, nil returns. Two modules with case studies.

Compute: net salary, company car, severance and freelancer withholding

  1. Step 2 of 6
    CalculatorFree result

    Spanish net salary — from annual gross to take-home pay

    Net pay is gross pay less your Social Security contributions (6.50% on a permanent contract, 6.55% on most temporary ones, up to the maximum base) and less the IRPF withholding. The withholding applies to your salary a rate calculated with the IRPF Regulation scale, your family situation and your children.
  2. Step 3 of 6
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    Spanish benefit in kind for a company car — 20% a year and efficiency reductions

    Using a company car is valued at 20% a year of its cost to the company, or of its new market value if the company does not own it. Efficient vehicles reduce that value by 15%, 20% or 30%. It is imputed according to your availability for private purposes, plus the payment on account not passed on.
  3. Step 4 of 6
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    Spanish severance pay on dismissal or end of contract — 12, 20 or 33 days per year

    Days of pay per year of service, prorated by month: 12 when a fixed-term contract ends, 20 for objective dismissal (capped at 12 months' pay) and 33 for unfair dismissal (capped at 24 months' pay). In an unfair dismissal under a contract signed before 12 February 2012, service before that date counts at 45 days per year.
  4. Step 5 of 6
    CalculatorFree result

    Spanish income tax withholding on freelance invoices — 15 % or 7 %

    A Spanish self-employed professional invoices with 15 % income tax withheld from the fee — or 7 % in the year they start and the two following years, if they did not practise any professional activity in the year before. The client deducts it from the payment and pays it to the tax office.

File: withholding on payslips and fees with modelo 111

  1. Step 6 of 6
    FormFree20 min

    Modelo 111: Spanish income tax withheld on salaries and professional fees

    Paying over, quarterly or monthly, the tax withheld on salaries, fees and other income: who files the 111, which boxes to fill in, when it is nil and when it is not filed — guide, deadlines and worked example.

The other paths

A different procedure, the same principle: the three pillars in order.

Read in Spanish