Salary Components, Payroll and Wage Payment Rules in Spain

Salary Concepts and Their Characteristics

Characteristics of salary: Salary is convertible into money, delivered in cash or not, and is considered by the employer as an agreed payment to the collective of workers. It is based on reciprocity: work is paid in return for the work performed, and the employer pays regardless of the economic situation it is going through.

Salary Components and Minimum Wage

Salary components and minimum wage: Salary components are as follows:

• Base salary: fixed by unit of time or work, and determined by the Interprofessional Minimum Wage (SMI).
• Established in the applicable collective agreement.
• Established in the individual contract as agreed.

Salary supplements are amounts added to the base salary and may be set based on: personal conditions of the worker, the type or conditions of their work, or business situations or results.

Extraordinary Payments and Other Salary Concepts

Other salary concepts that are not part of the minimum salary components include:

• Overtime payments (structural): performed voluntarily as agreed in the collective agreement or contract.
• Extraordinary payments (structural): required by business needs, such as production peaks, shift changes, etc.
• Extraordinary payments for force majeure: paid to repair or prevent losses from disasters or other extraordinary damage, such as fires or floods.
• Extraordinary bonuses: paid when the worker has been employed for less than 2 years by the first day of December to receive the Christmas bonus.
• Special salary: any object or service delivered by the employer to the worker as economic compensation for the service provided.

Non-Salary Payments

Non-salary payments, also known as non-salary concepts, are as follows:

Non-salary labor payments: on occasions, the worker usually receives certain amounts from the employer which, however, are not considered salary.

Non-salary payments: extra-salary or labor concepts.

Significance of Non-Salary Payments

Non-salary payments: significance: these are economic compensations or expenses previously received by the worker, such as:

• Per diems, travel and allowances for displacements.
• Transport plus distance allowances.
• Amounts paid for the purchase of tools or useful work materials.

Compensation corresponding to the transfer of a worker from a place other than their usual residence, contract suspensions, and dismissals. Social security benefits are not considered salary and are provided for payment by the employer.

Legal Measures to Protect Salary

The following legal measures are established in our legal system to ensure salary is received lawfully:

• Non-seizability of salary.
• Privilege of wage claims.
• Wage Guarantee Fund.

Payroll: Definition and Difference from Salary

Payroll: a document signed by the employer and delivered to the worker as a receipt of the wage paid, which both parties sign as proof of payment.

Payroll is not the same as salary, because payroll may include non-salary concepts (such as allowances and compensations).

Salary Payment: Timing and Requirements

Salary must be paid according to the following requirements:

• On time: on the date set and agreed upon.
• Periodically: generally with monthly frequency, although weekly, fortnightly or daily payments are also possible. Wages paid less than monthly must be documented monthly.
• Documented: the employer must give the worker a document proving the wage payment, called a payslip or salary receipt.

Payroll Retention Period

Employers must keep payrolls for a period of 4 years, as proof where necessary.