Redundancy in Spain is calculated based on the worker’s monthly average salary and length of service in the company. The calculation considers the number of years worked and the type of contract.
For those who require further information
Redundancy calculation in Spain is a topic that can bring up many questions, especially for those who are not familiar with the country’s labor laws. In general, the way redundancy is calculated in Spain is a bit different from other countries.
When an employee is terminated due to redundancy, they are entitled to a compensation payment from their employer. This payment is usually based on the worker’s monthly average salary and their length of service in the company. The calculation considers the number of years worked and the type of contract. The Spanish labor law establishes different regulations for different types of employment contracts; therefore, the calculation of redundancy payment may vary based on the type of contract the worker held.
According to the Spanish labor law, the amount of redundancy compensation varies depending on the type of contract. In general, workers with permanent contracts receive more compensation than those with fixed-term contracts. The table below shows the minimum amounts of compensation that employees are entitled to according to the type of contract and years worked:
| Length of service (years) | Permanent Contracts | Fixed-term contracts |
|---|---|---|
| Up to 12 | 8 days’ pay per year worked | 10 days’ pay per year worked |
| From 12 to 23 | 9 days’ pay per year worked | 11 days’ pay per year worked |
| From 23 onward | 10 days’ pay per year worked | 12 days’ pay per year worked |
It’s important to note that redundancy compensation is tax-free in Spain, up to a maximum of 180,000 euros. Any amounts over this limit are subject to taxation.
In conclusion, redundancy calculation in Spain is carried out according to the country’s labor laws, which establish different criteria for different types of employment contracts. By law, employers must pay a compensation payment to redundant employees, which is usually based on the worker’s monthly average salary and their length of service in the company.
As the famous Spanish writer Miguel de Cervantes said: “To be prepared is half the victory.” In this sense, it’s essential for both workers and employers to be aware of the labor laws in Spain to ensure a successful and fair compensation payment in case of redundancy.
Further responses to your query
Severance pay is 20 days of salary for each year the employee has worked with the company. Termination notices must be given 7 to 15 days before dismissal. Employees dismissed for disciplinary reasons receive no severance pay. Within 20 days, an employee can challenge the dismissal in a labor court.
In Spain, a termination is treated as being by reason of redundancy if it is based on an “economic, technical, organisational or production” reason. If you are on an indefinite ´indefinido´ work contract and you´ve been dismissed ´for objective reasons´ then you are entitled to a redundancy payment based on 20 days/year worked, or pro rata for any months over or under that. Maximum redundancy 12 months wages.
In Spain, a termination is treated as being by reason of redundancy if it is based on an “economic, technical, organisational or production” reason. In practice, it is often difficult for Spanish employers to determine whether they satisfy the genuine redundancy requirements.
If you are on an indefinite ´indefinido´ work contract and you´ve been dismissed ´for objective reasons´ then you are entitled to a redundancy payment based on 20 days/year worked, or pro rata for any months over or under that. Maximum redundancy 12 months wages.
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How much redundancy will I get in Spain?
Answer to this: Maximum of 24 months wages. If your contract is from before this date, the indemnization for an ´improcedente´ dismissal would be 45 days per year worked, for the period you worked before the change in the law, so before the 12th of February and 33 days per full year worked after that.
How long is redundancy notice in Spain?
As a response to this: In cases of justified and fair objective dismissals or collective redundancies the minimum severance pay is 20 days’ salary per year of service capped at 12 months. In addition, employees are entitled to 15 days’ notice, which can be substituted in lieu of payment of salaries.
Is redundancy tax free in Spain?
Response: How is it taxed in Spain? In Spain, severance pay is taxed as income from work. The first thing to do is calculate the taxable base, which is the gross amount of the severance pay, minus any deductions. The tax rate is then applied to the taxable base.
What is redundancy calculation?
Response: Redundancy pay is based on your earnings before tax (called gross pay). You’ll get more redundancy pay for each full year you’ve worked for your employer. How much you’ll get depends on how old you were during that year. You’ll get: half a week’s pay for each year you were aged under 22.
How do you calculate redundancy payments in Spain?
Answer will be: Your daily salary would then be multiplied by the days worked in that month: €43.33 x 17 = €736.61. That would mean you’re entitled to €736.61 of redundancy payment. As many of you may know, in Spain employees generally receive fourteen payments a year.
What is a collective redundancy in Spain?
Spanish employment law states that a collective redundancy may also refer to the dismissal of every member of staff when the company employs more than five workers and ceases its operations due to financial, technical, organisational or production-related reasons.
How much severance pay does a dismissal get in Spain?
Employees dismissed this way are entitled to receive 20 days of salary per years of service with the company. This increases up to a maximum of 12 months of pay. Severance pay like this applies to both individual and collective dismissals in Spain.
What is the maximum redundancy period?
Answer to this: Maximum redundancy 12 months wages. The employer must give you 15 days notice and during this notice period you are entitled to a maximum of 6 hours off, for job-seeking activities, without having your wages cut. a. Due to the ineptitude of the worker known or affected after his effective placement in the company.
How do you calculate redundancy payments in Spain?
Response: Your daily salary would then be multiplied by the days worked in that month: €43.33 x 17 = €736.61. That would mean you’re entitled to €736.61 of redundancy payment. As many of you may know, in Spain employees generally receive fourteen payments a year.
What is a collective redundancy in Spain?
Spanish employment law states that a collective redundancy may also refer to the dismissal of every member of staff when the company employs more than five workers and ceases its operations due to financial, technical, organisational or production-related reasons.
How much severance pay does a dismissal get in Spain?
Employees dismissed this way are entitled to receive 20 days of salary per years of service with the company. This increases up to a maximum of 12 months of pay. Severance pay like this applies to both individual and collective dismissals in Spain.
What happens if you are sacked in a redundancy settlement?
That is to say, if you are sacked the number of days you’ve worked in the month until that day is included in the redundancy settlement. Let’s look at an example. Say you’re an employee in Spain who earns €1,300 a month. For whatever reason, you are laid off.