How severance pay is calculated in Spain
The formula is the same for every type of termination:
Severance = daily salary × days per year × years worked, with a maximum that depends on the type of dismissal.
- Daily salary: annual gross salary (including extra payments) divided by 365.
- Years worked: from the start of your employment to the dismissal date. Periods shorter than a year are prorated by months, and here any started month counts as a full one.
- Days per year and cap: depend on the reason (see table).
Days per year and caps
| Type of termination | Days per year | Cap |
|---|---|---|
| Unfair dismissal (improcedente) | 33 | 24 monthly payments |
| Unfair dismissal, time before 12/02/2012 | 45 | 720 days (up to 42 monthly payments) |
| Fair objective dismissal (objetivo) | 20 | 12 monthly payments |
| End of temporary contract | 12 | No cap |
| Fair disciplinary dismissal | 0 | — |
An objective dismissal is based on economic, technical, organisational or production reasons, or on the employee’s lack of fitness for the job. If a court finds it unjustified, it becomes unfair and severance rises to 33 days per year. The end of a temporary contract gives no severance for training contracts or replacement (sustitución) contracts.
Worked example: unfair dismissal
Someone started working on 1 March 2018 and is dismissed on 31 August 2026, with a gross salary of €30,000 a year.
- Daily salary: 30,000 / 365 = €82.19.
- Length of service: 8 years and 6 months, i.e. 8.5 years.
- Days of severance: 33 × 8.5 = 280.50 days.
- Amount: 280.50 × €82.19 = €23,054.79. The 24-month cap (€60,000.00) isn’t reached.
If the same person had started on 1 March 2000 and been dismissed on 28 February 2026, they would add up 540.00 days for the pre-2012 period and 464.75 for the period after. Since the total exceeds 720 days, they’d receive the cap: €59,178.08.
Remember that, on top of severance, your employer owes you your final settlement (finiquito), and you’ll probably be entitled to unemployment benefit.
Frequently asked questions
How many days of severance pay am I entitled to per year worked in Spain?
It depends on how the employment ends: 33 days per year for unfair dismissal (despido improcedente), 20 days for a fair objective dismissal (despido objetivo) and 12 days when a temporary contract ends. A disciplinary dismissal ruled fair gives no right to severance pay.
Which salary is used to calculate severance pay?
The gross salary you were earning at the time of dismissal, including prorated extra payments and fixed salary supplements. It’s divided by 365 to get the daily salary. Allowances and travel expenses aren’t salary and aren’t included.
How are partial months counted?
The Workers’ Statute says periods shorter than a year are prorated by months. This calculator counts any started month as a full month, the most common criterion in Spanish courts. Some rulings prorate by days, which would give a slightly lower amount.
I started working before 2012. Does anything change?
Yes, for unfair dismissal. Time worked before 12 February 2012 counts at 45 days per year, and time after at 33 days. The total can’t exceed 720 days of salary, unless the pre-2012 period alone already exceeds it; in that case the cap is what that period gives, up to a maximum of 42 monthly payments.
Is severance pay taxed in Spain?
The statutory severance set by the Workers’ Statute is exempt from income tax up to €180,000. Anything above the legal amount (for example, an improved payout agreed with the company) is taxable. For unfair dismissal, the exemption requires the unfairness to be recognised at the conciliation hearing or by a court.
Does severance pay include my final settlement (finiquito)?
No. The finiquito covers what your employer owes you for work already done (days of the last month, unused holidays and accrued extra payments). Severance pay compensates for losing your job and is added to the finiquito when it applies.
Other calculators
- Net salary calculator: Gross to net pay in Spain: income tax withholding (IRPF), Social Security and your monthly take-home pay.
- Final settlement (finiquito) calculator: Last month’s salary, unused holidays, pending extra payments and severance when you leave a job in Spain.
- Unemployment benefit (paro) calculator: Whether you qualify for unemployment benefit in Spain, how long it lasts and how much you’ll get.
- AI CV analyzer: check how well your CV matches a specific job offer and what to improve.