What an employee really costs beyond the salary

Terms used

• Paga extra — The paga extra is one of two extra salary payments a year, usually paid in June and December.
• AT/EP — AT/EP is the employer-only contribution for work accidents and occupational diseases, set by activity.
• CNAE — The CNAE is the national activity code that decides your accident insurance rate.
• FOGASA — FOGASA is the wage guarantee fund that pays workers when an employer cannot.
• MEI — The MEI is a yearly rising pension levy shared between employer and employee.
• Mutua — The mutua is a mutual insurance body that can manage sick pay and accident benefits for Social Security.
• Gestoría — A gestoría is an administrative adviser's office that handles payroll and paperwork for a fee.

Key rules

• Accident insurance: You alone pay the AT/EP contribution, and the rate depends on your activity's CNAE code.
• Fixed-term contracts: Unemployment contributions are 6.70% on fixed-term contracts against 5.50% on indefinite ones.
• Sick pay: You pay days 4-15 of common illness at 60% of the regulatory base.
• Extra payments: Budget two extra payments a year unless the collective agreement spreads them over the monthly pay.

The short answer

Budget well above the gross salary. Employer Social Security contributions alone add roughly 30-32% of the contribution base. Accident insurance, extra payments, paid leave, sick pay and admin costs come on top. The calculator below turns these into a yearly figure.

Employer Social Security contributions

You pay these on top of the gross salary, on the employee's contribution base. The employer rates for 2025 were:

• Common contingencies: 23.60%
• Unemployment: 5.50% for an indefinite contract, 6.70% for a fixed-term or temporary one
• FOGASA: 0.20%
• Vocational training: 0.60%
• MEI: 0.67% in 2025

The MEI is a yearly rising levy for the pension system. For 2026 it is 0.90% in total, of which you pay 0.75% and the employee pays 0.15%.

A fixed-term contract therefore costs 1.20 points more in unemployment contributions than an indefinite one. Rates are set every year, so check the current year's rates before you finalise a budget.

Accident insurance (AT/EP)

You alone pay the accident and occupational disease contribution (AT/EP). The employee pays nothing towards it.

The rate is a percentage of the contribution base. It depends on the CNAE code of your activity, and some occupations, such as office staff, have their own rate. Your Social Security registration documents show your rate. The published rate table lets you check it.

Extra payments, vacation and leave

• Two extra payments a year (paga extra). They are usually paid in June and December. If the collective agreement spreads them over the monthly pay, they are already in the 12 monthly payments, but the yearly total is the same.
• Vacation. At least 30 calendar days of paid vacation a year. The collective agreement can set more.
• Public holidays. Up to 14 a year, set by the State and your region.
• Paid leave. 15 calendar days for marriage, plus leave for the death, illness or hospitalisation of relatives, moving home and public duties. Since 2023 there are also 4 days for urgent family reasons and 5 days of care leave.

You pay the salary during all of this, so the cost is the same as for days worked, with no output in return.

Sick pay

For common illness or a non-work accident:

• Days 1-3: Social Security pays nothing. Some collective agreements make you pay these days.
• Days 4-15: you pay 60% of the regulatory base.
• From day 16: Social Security (or the mutua) pays 75% of the base. You normally advance it through payroll and it is netted off your contributions.

For a work accident or occupational disease, Social Security pays 75% from the day after the event. You pay the day of the event itself.

Many collective agreements require employer top-ups, so read yours before you budget.

Other costs to include

• Occupational risk prevention: an outside prevention service, medical checks and training.
• A gestoría or payroll adviser.
• Equipment, software and workspace.
• Collective agreement extras.
• A severance provision. This is 20-33 days of pay per year worked, depending on the type of dismissal, or 12 days per year when a temporary contract ends.

What to do

1. Find your AT/EP rate in your registration documents.
2. Read your sector's collective agreement for vacation, leave, sick pay and extras.
3. Use the calculator below to estimate the full yearly cost.
4. Add a margin for sick pay and severance.

Timeline and deadlines

• Budget the two extra payments (paga extra), unless the collective agreement spreads them over the monthly pay: usually in June and December

• Budget paid vacation for each employee: at least 30 calendar days per year

• Allow for paid leave for marriage: 15 calendar days when the employee marries

• Allow for leave for urgent family reasons: 4 days when the reason arises

• Allow for care leave: 5 days when the employee needs it

• Set aside sick pay if the employee is off with common illness: Social Security pays nothing, and some collective agreements make you pay these days: days 1-3 of the absence

• Pay sick pay at 60% of the regulatory base: days 4-15 of the absence

• Advance Social Security's 75% through payroll: from day 16 of the absence

Documents you need

• Your registration documents from Social Security, which show the accident and occupational disease (AT/EP) rate that applies to your business.

• The accident rate table published by Social Security, to find the rate for your activity's CNAE code and for occupations with their own rate, such as office staff.

• The collective agreement for your sector, which can improve the minimum vacation, paid leave and sick pay and add extras to your budget.

Estimate the full yearly cost of an employee

Work it out

What you enter

• Yearly gross salary, including extra payments (EUR): Your draft employment contract or the salary you have agreed with the employee.
• Employer unemployment rate (5.5 for an indefinite contract, 6.7 for a fixed-term one) (%): Your contract type: use 5.5 for indefinite and 6.7 for fixed-term or temporary.
• Your work-accident and occupational-illness rate (%): Your Social Security registration documents, which show the rate for your activity code and the employee's occupation.

Figures used

• Employer common contingencies rate: 23.6 % (as of 2025)
• Employer FOGASA (wage guarantee fund) rate: 0.2 % (as of 2025)
• Employer vocational training rate: 0.6 % (as of 2025)
• Employer MEI (intergenerational equity) rate: 0.75 % (as of 2026)
• Maximum monthly contribution base: 5,101.2 EUR (as of 2026)
• Minimum wage per year (14 payments): 17,094 EUR (as of 2026)

Worked example (with Yearly gross salary, including extra payments 24,000 EUR, Employer unemployment rate (5.5 for an indefinite contract, 6.7 for a fixed-term one) 5.5 %, Your work-accident and occupational-illness rate 1.5 %)

When the sum misleads

• If the shortfall to the minimum wage is above zero, the salary is only legal for part-time work, in proportion to the hours.
• The monthly base cannot fall below the minimum base for the employee's professional group, so a very low salary can cost more than this sum shows.
• Hiring bonuses and other incentives are not included here; ask your gestor, a professional who handles payroll and tax filings, which ones you qualify for.
• The salary should include the extra payments; if they are paid separately, enter the full yearly total.

Frequently asked questions

Who pays the accident insurance rate for an employee?

You alone, as the employer, pay the accident and occupational disease contribution (AT/EP); the worker pays nothing toward it. The rate is a percentage of the contribution base and depends on your activity's CNAE code (the code for your type of business) and the occupation.

Does a fixed-term contract cost more in Social Security than an indefinite one?

Yes, the unemployment contribution is higher for fixed-term and temporary contracts: in 2025 it was 6.70% against 5.50% for indefinite contracts. The other employer rates stay the same. Budget this difference when you price a short contract.

How much does the MEI levy cost me in 2026?

In 2026 the MEI levy is 0.90% in total, of which you pay 0.75% and the worker pays 0.15%. In 2025 your share was 0.67%. The levy is planned to rise every year, so use the current year's figure.