HEALTHPLAN MAGAZINE

As a self-employed individual in Spain, you have several options for hiring employees. You can hire someone temporarily, engage their services as if you were a client, or bring them on as a full-time member of your team.

Below we cover what you need to do in order to employ someone when working as a self-employed person in Spain.

You will learn:-

• The steps involved to hire someone
• The forms you need to complete
• How many people you can hire
• Whether you can hire family members
• If you can hire the services of other freelancers

Let’s take a look.

What are the steps to hire someone?

Step 1: To hire full-time or contract employees, as opposed to freelancers, and if you are new to hiring, you will need to register as an 'empresario' with both the tax office and Social Security (TGSS)

Step 2: To register with Social Security, fill out Form TA-6, followed by Form TA.7. Upon completion of the latter, you will receive a Contribution Account Code (Código Cuenta de Cotización), which serves as your employer identification number.

Step 3: If you are ready to hire an individual and have identified the candidate, register them with Social Security using Form TA.2/S. You will require their social security number, identification, and account number.

For new hires, ensure that they obtain a social security number prior to the registration process. This number is valid for their lifetime and they will not need a new one if they have previously worked in Spain.

Step 4: Within 10 days, register the contract with the Public State Employment Service (SEPE). This can be done online via the Servicio Contrat@ service.

Once the above steps are completed, you are obligated to start paying both your own and your employee's social security contributions, as well as their salary.

The cost of social security and salary will depend on the workers' agreement applicable to your industry and the type of contract you have selected. You can see a list of the types of contracts here.

Typically, the cost of social security contributions for employees will be 30% of their base salary. You can find out the exact amount using the official contributions calculator.

Keep in mind, if there are any changes to your employees' contracts or if you need to terminate their employment, it is your obligation to promptly inform the Social Security office by filling out Forms TA.1 and TA.2/S.

Can I hire a family member or partner?

As per the provisions of Article 1.1 of the Workers' Statute, if a self-employed person wishes to hire a relative, it must be as a self-employed collaborator (Autonomo Colaborador), unless it can be shown that there exists a professional employment relationship.

In the latter case, a formal employment contract must be established and the individual's social security contributions must be covered.

In simpler terms, if the family member resides with you and doesn't receive a fixed salary, but shares the business risks, the hiring should be done as a self-employed collaborator and not as an employee.

To be considered a direct relative for purposes of regular collaboration, an individual must:

• Be a direct relative by consanguinity, affinity or adoption up to second degree
• To offer a regular collaboration, not only in specific cases.
• Must live at the same address as the self-employed owner
• Cannot be registered as a self-employed worker.
• Must be over 16 years old

As an Autonomo Colaborador, you are not obligated to file regular IVA or IRPF tax declarations and are also therefore not allowed to create invoices for their services.

Are there any limits on the number of people you can employ?

Yes, there are.

As a rule, you will be able to hire up to 10 employees, however, this will depend on the type of business activity you undertake and how you are taxed.

Some examples of limitations are:-

• Bread and pastries industry - 6 employees
• Retail trade of fruits and vegetables - 5 employees
• Retail sale of office furniture and office machines and equipment - 4 employees
• Restaurants - 10 employees
• Cafeterias - 8 employees
• Repair of industrial machinery- 2 employees
• Retail trade of newspapers, magazines and books in kiosks located on public roads- 2 persons employed.

More information on specific limits can be found here.

Can I hire another self-employed worker?

Yes, you may hire the services of another autonomous self-employed worker, however, this will purely have to be a business relationship basis. They will remain responsible for their own social security payments.

Any work that they undertake for you will have to be on a freelance basis where they will have to provide you with an invoice.

They will not be able to have a fixed schedule or a set salary.

Do you lose the discounts offered for new self-employed startups?

No, self-employed workers will not lose the right to the Tarifa Plana social security reductions scheme.

Under this plan, the self-employed worker will pay a flat rate of 60 euros per month for 12 months. This amount then increases over time until they pay the full rate of around 290 euros per month.

You can see the current social security amounts for Tarifa Plana via our page - Registering as a self employed autonomo in Spain.