Social Security discounts and subsidies for hiring

Terms used

• Bonificación — A bonificación is a monthly reduction of the employer's Social Security contributions for a qualifying hire or training.
• SEPE — SEPE is the state public employment service, which handles unemployment benefits and hiring incentives.
• FUNDAE — FUNDAE is the state foundation that manages the training credit employers use for staff courses.
• Comunidad autónoma — A comunidad autónoma is one of Spain's regions, each with its own employment service and subsidies.

Key rules

• Eligibility: Both the worker's profile and your own compliance with Social Security and tax payments must be in order.
• Keeping the hire: Breaking the conditions means repaying the benefit with a surcharge and interest.
• Regional calls: Regional subsidies come from yearly calls that differ by region and can run out of budget.
• Training credit: Firms with fewer than 10 workers do not co-finance training.

Three ways to reduce hiring cost

You can combine three kinds of help: national bonuses on employer Social Security contributions, regional subsidies, and a training credit. Each has its own conditions. Check which ones fit your hire before you sign the contract.

National Social Security bonuses

A bonificación is a monthly reduction of the employer's Social Security contributions. It is mainly available for permanent contracts with workers from certain groups:

• long-term unemployed people
• young people
• women in underrepresented sectors
• victims of gender violence
• people with disabilities
• people at risk of social exclusion

Converting a training contract into a permanent one can also qualify.

The monthly amount and the number of years depend on the worker's group, the contract type, your headcount and the year. Ask SEPE or Social Security for the current figures for your worker's group before you promise anything to the hire.

Conditions you must meet

• You are up to date with Social Security and tax payments when the contract is signed and when you apply the bonus.
• You have not been excluded from benefits for labour infractions, and you respect the state-aid limits where they apply.
• The worker fits the profile the scheme asks for.
• The hire does not replace a worker dismissed without cause, and is not a close relative of yours (there are limited exceptions).
• You have not recently made unfair, null or collective dismissals for the same positions.
• You keep the worker employed and keep your average workforce level, usually for 3 years on permanent contracts. This varies by scheme.

If you stop meeting these conditions, you must repay the benefits with a surcharge and interest, and you may lose them in future. Minor failures bring smaller sanctions.

You apply bonuses yourself in the monthly Social Security settlement, and the authorities monitor them afterwards. A wrongly applied bonus is your risk, so confirm eligibility first.

Regional subsidies

Each comunidad autónoma also grants hiring subsidies, on top of national schemes. They are usually annual calls run by the regional employment service. Typical targets are permanent hires of young people, women, people over 45 or 52, people with disabilities, people at risk of exclusion, the long-term unemployed, and the first hire of a self-employed worker.

Amounts, requirements and deadlines differ by region and year, and budgets can run out. Look on your regional employment service website and in the regional official gazette. The national subsidies database lists calls across the country.

Training credit

Every employer pays a vocational training contribution with its Social Security payments (0.7% of the contribution base, of which 0.6% is paid by the employer). That builds an annual credit you recover as bonuses against your Social Security contributions.

• The credit is last year's contribution multiplied by a percentage set each year in the Budget Law. The percentage is higher for small firms. Firms with 1 to 5 workers get a minimum credit.
• Register on the FUNDAE platform. Notify each course before it starts (usually at least 7 days before for in-person training) and again when it finishes.
• You can organise training yourself, use an outside training provider, or group with other companies.
• Firms with fewer than 10 workers do not co-finance. Larger firms pay part themselves: 20% for 10-49 workers, 40% for 50-249 workers, 60% for 250 or more.
• Apply the bonus in your monthly settlement. The deadline for training bonuses ends in December of the year.
• Inform your workers' representatives of the training plan.

The checklist and timeline below set out the steps in order.

Timeline and deadlines

• Find the open call for your region's hiring subsidies: before you hire, as calls open and close each year

• Register on the FUNDAE platform to use your training credit: before you start any course

• Notify FUNDAE that an in-person course is starting: usually at least 7 days before it begins

• Notify FUNDAE that the course is finished: after the course ends

• Apply the training bonus in your monthly Social Security settlement: before the deadline for the year ends in December

Checklist

• Confirm that the worker fits the profile of the bonus, such as young, long-term unemployed, disabled or at risk of exclusion.

• Check that the hire is not a replacement for a worker dismissed without cause or a close relative of yours.

• Register on the FUNDAE platform and notify each course before it starts and when it ends.

• Apply each bonus in your monthly Social Security settlement before the December deadline for training bonuses.

Frequently asked questions

Which hires are excluded from Social Security bonuses?

Hires that replace workers dismissed without cause, and hires of close relatives of the employer, are excluded, with specific exceptions. Positions you recently filled through an unfair, null or collective dismissal are also excluded. The worker must still fit the programme's profile, such as young, long-term unemployed or with a disability.

What happens if I stop meeting the conditions of a bonus?

You must repay the bonuses you received, with a surcharge and interest, and you may lose them in future periods.

Where can I find hiring subsidies from my own region?

You can find them on your regional employment service website, in your region's official gazette and in the national subsidies database. Regional subsidies usually come as annual calls with their own amounts and deadlines. Budgets can run out, so apply early.

Do I have to co-finance training paid with the FUNDAE credit?

It depends on size: firms with fewer than 10 workers pay nothing towards it, while larger firms co-finance 20% at 10-49 workers, 40% at 50-249 workers and 60% at 250 or more. You apply the bonus in your monthly Social Security settlement, and the deadline for applying it ends in December of the year.