Working remotely in Spain for UK company: your options

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How to put a Spain-based worker on a compliant footing

1. Establish the facts: duration, role and tax residence direction. Pin down whether this is a temporary posting with a return date or an indefinite move, what the person actually does, and when Spanish tax residence is likely to begin under Spain's residence rules. Temporary postings and permanent moves lead to different instruments, and seniority matters because a senior person concluding business from Spain sharpens the company's own tax exposure there.
2. Take advice on social security and tax positions early. The UK and the EU maintain social security coordination arrangements that can keep a genuinely temporary posted worker in the UK system for a limited period, with certificate paperwork to match, while longer or indefinite arrangements shift contributions to Spain. Which applies is fact-specific and time-limited, so get professional advice and the certificate question settled before the move, not after the first payslip.
3. Choose the employment vehicle for the long term. For an indefinite stay the realistic choices are registering the UK company in Spain as a foreign employer to run Spanish payroll and contributions itself, or moving the person onto an employer of record's Spanish entity with a locally compliant contract while they keep working for you day to day. The EOR route prices as a monthly per-employee fee and avoids operating registrations of your own.
4. Re-paper the relationship and close the UK loose ends. Whichever vehicle wins, the person needs a contract that reflects Spanish employment terms, and the UK side needs tidying: PAYE treatment, any UK benefits that cannot follow them, pension arrangements and the treaty position on where their employment income is taxed. Document the handover date so the two systems do not overlap or gap.

The risks of leaving the arrangement informal

The quiet failure mode is the employee who moved a year ago and is still on UK payroll as if nothing happened. The exposures accumulate on both sides: Spanish employment law protections the person can later assert regardless of what the contract says, social security contributions that should have been paid in Spain, and the possibility that the person's activity creates a taxable presence for the company in Spain, particularly where they negotiate or conclude contracts there. None of these depend on the company having intended anything; they follow from where the work happens.

There is also a data and insurance layer: employer's liability cover, data protection arrangements and workplace obligations were all bought for a UK-based employee. An arrangement that was never redesigned for Spain tends to fail several of these at once, and the cost of regularising grows with every month of back contributions. Nothing on this page is legal or tax advice; the position turns on the specific facts and current UK, EU and Spanish rules, so take professional advice on both sides of the border.

Where an employer of record fits, and what it costs

An EOR with a Spanish entity resolves the employment layer in one move: it becomes the legal employer in Spain, issues a compliant Spanish contract, runs Spanish payroll and contributions, and invoices the UK company salary plus statutory costs plus a fee. The UK company keeps direction of the work. This is the standard instrument when one or two people are involved and the company has no other reason to build a Spanish presence, and it converts an open-ended compliance project into a monthly line item; the vendor table on this site shows verified published pricing for providers covering Spain.

The EOR does not solve everything. The company's own tax exposure from what the person does in Spain is unaffected by who employs them, immigration status is a separate question for non-UK nationals, and at several Spanish hires the fee stack starts arguing for a Spanish entity instead. Treat the EOR as the employment fix within a picture your advisers have looked at whole.

Common questions

Can an employee just keep their UK contract while living in Spain?

Not durably. Where someone habitually works generally determines the employment protections and social security system that apply, so an indefinite move to Spain pulls the employment into Spanish rules regardless of the contract's governing law clause. Temporary postings have their own time-limited arrangements.

Does the UK company have to set up a Spanish entity?

No. The main alternatives are registering as a foreign employer to run Spanish payroll without a full entity, or engaging an employer of record whose Spanish entity employs the person. A subsidiary usually only makes sense once several people or commercial activity justify it.

What does the employer of record route cost for Spain?

A monthly per-employee service fee on top of salary and Spanish statutory employer costs. Published prices for the vendors in this index are shown in the comparison table with the vendor's own pricing page linked beside each figure.

Does using an EOR remove the company's tax risk in Spain?

It resolves employer obligations, not corporate ones. Whether the person's activity creates a taxable presence for the company in Spain depends on what they do there, especially concluding contracts, and needs its own advice.

Coverage by country

• Employer of record vendors covering Singapore
• Employer of record vendors covering Mexico
• Employer of record vendors covering Spain
• Employer of record vendors covering Colombia
• Employer of record vendors covering United Kingdom
• Employer of record vendors covering France
• Employer of record vendors covering Hungary
• Employer of record vendors covering New Zealand