[Updated 2/15/24] The number one employee benefit in Spain is medical insurance. Life and disability insurance comes in at a close second as well as retirement a scheme since the public pension is being gradually reduced and employees are keen to supplement it. When asked to rank three other common benefits in order of importance, the average Spanish employee would likely mention medical, death & permanent disability, and also accident and travel insurance.

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Clara Calzada


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Multinational companies implement employee benefits in Spain that are independent of public benefits to attract and retain talent.

All companies must comply with the collective bargaining agreement’s (CBA) liabilities of application, but many CBA’s have no specific compliance liability. CBAs differ significantly by sector and by benefits. The benefits in order of importance are accident insurance, life insurance, and a retirement/early retirement scheme. 

Amounts to guarantee under CBA accident or life policies are not usually high, and consequently, companies often implement Voluntary Benefits to provide higher cover. 

Supplementary benefits highly valued by the average Spanish employee would be in the following order of importance: health insurance, life/accident insurance, and a retirement plan. Travel insurance is a valued benefit as well.

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Voluntary corporate pension schemes are an employee benefit in Spain that is in the spotlight due to significant tax changes approved lately. In 2021 the maximum tax-exempt contribution was €2,000 for employees/individuals and an additional €8,000 in employer contributions. For the year 2022 limits applied as follows:

Total annual maximum employer contributions and individual contributions to the pension plans regulated in this law may not exceed €1,500.

This limit will be increased by €8,500, provided that such an increase comes from employer contributions, or from contributions from the employee to the same social benefit formula for an amount equal to or less than the respective employer contribution.

For these purposes, the amounts contributed by the employer which derive from the employee’s decision shall be considered as contributions from the employee.


For these purposes, the amounts contributed by the employer which derive from the employee’s decision shall be considered as contributions from the employee.

For the year 2023 limits explained above for 2022 also apply with the following additional changes,

The provisions of the Law include incentives favorable to employees with lower income (those with an annual income of less than EUR 60,000) by allowing them to contribute more than their employer’s contribution to the occupational pension plan, but within limits that depend on employer’s contribution amount, and up to a maximum employer contribution of EUR 1,500 per year.

The coefficients for calculating the maximum employee contributions based on employer contribution amounts to the occupational pension plan are presented in the table below.

Annual employer contribution Coefficient for calculating the maximum annual employee contribution
Up to EUR 500 2.5
EUR 500.01 to EUR 1,000 2.0
EUR 1,000.01 to EUR 1,500 1.5
Greater than EUR 1,500 1.0

Average Cost for Employer-Sponsored Benefits

An average cost considering Health Insurance, Life Insurance, and the DC Retirement scheme could be 10% of the gross basic salary.

Tax legislation may have some differences among the Spanish Autonomous Communities. For example, the health premium paid by a company on behalf of an employee is €500 tax-exempted per person per year in most communities, but not so in the Basque Country. 

Also, there is a labor risk regulation to be complied with and not related to voluntary employee benefits. It implies offering voluntary annual checkups to their employees. Large companies have a specific department and even doctors to comply with these regulations. However, small and medium companies contract the Services of Private Occupational Risk Prevention Companies (different from Insurance Companies) to satisfy the requirement.

Mandatory Employee Benefits in Spain

These follow the collective bargaining agreement (CBA). 

Supplementary Employee Benefits in Spain

Health Insurance

Private medical insurance is the employee benefit in Spain that complements the public medical service, and together with the attractive tax treatment, it’s being considered one of the benefits highest valued by employees. People use the public system; however, employees may find delays in testing and non-urgent surgery dates. 

The Basic Private Health Policy provides access to medical services from a provider network of doctors/hospitals. Richer benefits provide 80%-90% reimbursement for out-of-network medical expenses and contain dental coverage.

Private health insurance typically covers: 

  • Non-Hospital
    • Medical consultations (general physician and specialists)
    • Home medical visits
    • Physiotherapy
    • Podology
    • Medical tests
  • Hospital
    • Surgical interventions
    • Ambulance
    • Payment per day of hospital stay
  • Additionally
    • 24-hour call center to access medical assistance
    • Local travel insurance (for trips under 90 days duration)

The health policy usually covers all employees and may be extended to their dependents. Employees’ premiums in most cases are fully paid by the employer, while dependents’ premiums are paid in full by the company or split with the employee, or the employee pays 100%. The employees’ dependent costs are deducted from their paychecks.

Life and Personal Accident Insurance

Usually, all employees receive coverage under group life insurance, and employers pay 100% of the premium. Standard coverage profiles are:

  • Death by any cause is often two times the annual salary (double the amount if by accident), though a fixed amount is provided in some cases.
  • Absolute or total and permanent disability guarantees an amount equal to two times the annual salary (double the amount if by accident) though in some cases, a fixed amount is provided.

 Employees are eligible to receive these benefits if the disability is labeled one of two ways:

  • An absolute and permanent disability is determined by the Social Security system, and the performance of any remunerated job is impossible. 
  • Total and permanent disability is also resolved by the Social Security system and implies the impossibility of performing the regular job, but the employee can do another job.

These benefits are independent of Spain’s Social Security death/survivor or permanent disability benefits.

Short-term sickness is often complemented up to 100% of the base salary by CBA liability or by the employer’s voluntary decision.

Retirement Scheme

Spain has a pay-as-you-go system to finance the public retirement pension. The retirement date is currently under a gradual period where 67 years will be the ordinary retirement age. In 2027 age 65 may be the legal retirement age or early retirement age.

The public retirement pension is calculated under a formula considering years quoted to Social Security and the quotation basis paid under a specific period.

The 2024 maximum social security pension amounts to €44,450.56. The higher the salary, the higher the gap between the final salary and the public pension. Consequently, a supplementary corporate pension scheme is highly valued by higher-salaried employees and is an important retention tool.

On 2 July 2022, new legislation (Law 12/2022) regulating the promotion of occupational pension plans came into force

Key provisions of Law 12/2022 include:

  • Creation of open public promotion occupational pension funds
  • Development of simplified occupational pension plans
  • New government incentives and tax favorable measures
  • Government tax and contribution incentives


Open public promotion occupational pension funds -yet to be developed-

  • Law 12/2022 provides for the creation of open public promotion occupational pension funds (Fondo de pensiones de empleo de promoción pública abierto, FPEPP), consisting of a collective supplemental savings vehicle for retirement.
  • The FPEPPs will be managed by private financial institutions under the supervision of the Special Control Commission

Simplified occupational pension plans  are a new kind of occupational defined contribution (DC) plan with a streamlined implementation process, promoted by companies covered by sectoral collective bargaining agreements (CBA)

New corporate income tax deduction –of application to Corporate Pension Plans only-

Effective 1 January 2023, a new corporate income tax deduction applies for employer contributions to occupational pension plans.

Reduction in Social Security contributions Effective 1 January 2023, employer social security contributions for common contingencies will be reduced by the full amount of their occupational pension plan contributions -with a maximum application.

The Spanish government plans to change the supplementary retirement scheme have already started with the legislation mentioned above. Its goal is to prioritize private pension plans within companies over individual plans (second pillar). Currently, the government is aiming its efforts at small and medium-sized enterprises and self-employed workers.

Today, employers have no obligations to offer a supplemental pension scheme other than anything named in the CBA application. Most multinational companies offer voluntary pension plans based on defined contribution schemes ranging from 3% to 5% of total pensionable salaries. The more generous plans are between 5 and 10% of total pensionable salaries.

In many cases, there is a company contribution plan; however, they may imply company and employee contributions.

Employee Perks

In Spain, fringe benefits often offered to employees are:

Tax saving benefits – Offered as well through Flex Retribution Scheme (pre-tax salary)

  • Lunch vouchers (€220 per month 11 months a year)
  • Public Transport tickets (€1.500 /year) home-work 
  • Kindergarten (0-3 years of age) without limits

Discounts are offered via third-party vendors and include:

  • Childcare discounts
  • Restaurant discounts
  • Shopping discounts
  • Gym discounts
  • Travel Agencies discounts


  • Professional training/language courses. Exempted under personal tax if training is directly related to the employee’s job
  • Stock options (under special buying conditions)
  • Cars – tax exempted up to 20% of car market value, applying the percentage of working use


This information about employee benefits in Spain is provided by SARE, Asinta’s employee benefits consulting Partner in Spain

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

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