Working in Spain: 4 ways to earn your money

In short: There are four ways to earn your money in Spain: remotely for an employer in Germany or Austria, with a local job, as a self-employed person or with a pension and savings. Life is easiest for those who bring their income with them, because salaries in Andalusia and the Canary Islands are well below those back home. Each route has its own rules for social security and tax.

Route 1: Remote for an employer in Germany or Austria

A salary from back home and the cost of living in Spain: for many people this is the most attractive route. But it only works if your employer plays along, because it takes on obligations in Spain.

Social security

The basic rule in the EU is: you are covered by social security where you work. If you live in Spain and work from home there, you are subject to Spanish social security law. Your employer must register you with the Spanish social security system and pay the contributions there. It does not need a branch in Spain for this. It needs:

• an electronic registration with the Tesorería General de la Seguridad Social (the social security treasury) with an address in Spain
• a contribution account number (Código de Cuenta de Cotización)
• a representative resident in Spain who is authorised for the RED reporting system. That can be you or a Gestoría (an agency for paperwork and payroll).

An exception is created by the framework agreement on cross-border telework, which Spain, Germany and Austria have signed (in force since 1 July 2023). On a joint application by you and your employer, the law of the employer’s country continues to apply if telework in your country of residence makes up less than 50 % of your total working time. So you would have to keep working more than half the time in your employer’s country.

Income tax on wages

From the Spanish point of view, work is considered to be carried out where you physically work. If you are resident in Spain, Spain taxes your wages. According to a binding ruling by the Spanish tax administration from June 2026, a foreign employer does not have to withhold Spanish income tax as long as it has no permanent establishment in Spain and is not otherwise economically active there. You then declare the wages yourself in your income tax return.

The consequence for your bank account: without withholding, you pay nothing during the year, and the entire tax falls due with the annual return. Set the money aside in good time. The rates are in the article Taxes in Spain. Also clarify with your employer how wage tax deduction in your home country ends after you move away and whether your home office could have tax consequences for the company in Spain. Some companies solve the issue through a service provider that formally employs you in Spain (Employer of Record). This also needs to be checked in advance.

What remote work looks like in everyday life is covered in the article Moving to Spain as a digital nomad.

Route 2: A local job

A Spanish employment contract is the most direct way into the system: the employer registers you, and you have health and pension insurance. In return, you have to live with the Spanish salary level.

Minimum wage and salaries

The statutory minimum wage (SMI) in 2026 is 1,221 € a month over 14 payments, which is 17,094 € gross a year. If the extra payments are spread over twelve months, it comes to 1,424.50 € a month. That is 3.1 % more than in 2025.

The figures come from the annual wage structure survey of the statistics office INE (reference year 2024). For comparison: according to Eurostat, a full-time salary in 2024 averaged 53,791 € in Germany and around 33,600 € in Spain. Hospitality, where many jobs are created on the coast and on the islands, is the worst-paid sector.

Job market

In Q2 2026, the unemployment rate in Spain was 9.87 %. Andalusia had the highest rate of all regions at 14.56 %, and the Canary Islands were at 11.6 %. In the Canary Islands, youth unemployment (under 25) was 27.78 %. The figures for Q3 will be published at the end of October 2026. Finding a job without good Spanish is possible, but the choice is small and the competition is strong.

Contract and rights

Spanish labour law (Estatuto de los Trabajadores) treats the permanent contract as the norm. Fixed-term contracts are only allowed for special production circumstances (a maximum of 6 months, up to one year by collective agreement) or to cover for someone. For seasonal work there is the “fijo-discontinuo”, a permanent contract with interruptions. Other key points:

• a maximum of 40 hours per week on an annual average
• at least 12 hours of rest between two working days
• at least 30 calendar days of holiday per year
• a maximum of 14 public holidays per year, 2 of them local

You only need recognition of your qualification in regulated professions. For doctors, nurses, midwives, dentists, pharmacists, architects and vets, it is automatic within the EU. Language certificates or membership of a professional chamber may still be required. What a posting by your current employer means is covered in the article Moving abroad as an expat.

Route 3: Self-employed as an Autónomo

Self-employed people register with the tax office and in the special social security scheme for the self-employed (RETA). The framework agreement on telework only applies to employees. If you work as a freelancer from Spain, you pay your contributions there, even if all your clients are in Germany or Austria.

In 2026, the monthly contribution depends on net earnings, and the minimum contribution ranges from around 206 € to around 607 € depending on the bracket. Newcomers pay 80 € a month for the first 12 months with the Tarifa plana. On top of that come quarterly tax returns. You will find the process step by step under Registering as an Autónomo. In the Canary Islands, the island tax IGIC applies instead of VAT, and there is a separate article on it: Self-employed in the Canary Islands.

Route 4: Pension or savings

If you live on a pension, rental income or investment income, you are independent of the Spanish job market. A German pension is generally paid in full if you live abroad. If you only receive a pension from Germany or Austria, you remain health-insured there and register with the Spanish public health system using form S1. More on this under Health insurance in Spain.

For tax purposes: if you are resident in Spain, you pay tax there on your worldwide income. For statutory pensions from Germany, the German tax authorities may additionally levy a limited withholding tax depending on when the pension started, which Spain credits. Accounts, securities portfolios and property abroad must be reported. The details are in the article Retiring to Spain.

Taking unemployment benefit to Spain

If you are unemployed and want to look for a job in Spain, you can take your unemployment benefit with you for a limited time. The form for this is called PD U2. For unemployment benefit from Germany:

1. After becoming unemployed, you must have been available to the German employment service for at least 4 weeks. The agency can shorten this period.
2. You apply for the PD U2 at your Agentur für Arbeit (German employment agency) before leaving.
3. You register with the employment service in Spain within 7 days of leaving.
4. You are entitled to 3 months of continued payment. An extension to a maximum of 6 months is at the agency’s discretion.

The amount stays the same and continues to be paid from Germany. The same EU rules apply to unemployment benefit from Austria. Ask the AMS (Austrian employment service) before you leave how it handles the extension.

Frequently asked questions

Cover image: Zarateman · Wikimedia Commons · CC0