Spain severance and final pay calculator (finiquito)

When a job ends in Spain there are two separate things: the finiquito, the pay you have already earned (salary, holiday and extra payments), and severance, which only exists in some cases and depends on why the contract ends and how long you have been there. Employers cannot simply pay a month and be done: Spanish law fixes the days per year.

Enter the salary, the dates and the cause. The calculator separates each item, applies the days per year and caps for each type of dismissal, handles the pre-2012 rule and shows how much of the severance is exempt from income tax.

Severance depends on the cause: 33 days of pay per year of service for unfair dismissal, capped at 24 months; 20 days per year, capped at 12 months, for objective and collective dismissal; and 12 days per year when a temporary contract ends. Fair disciplinary dismissal and resignation carry no severance.

Periods under a year are prorated by months. If you started before 12 February 2012 and the dismissal is unfair, that period is calculated at 45 days per year and the later one at 33.

The finiquito adds the days worked in the last month, untaken holiday and the pro-rata extra payments, all at annual salary divided by 365 per day.

Finiquito and severance are different things

• The finiquito is what you have already earned: unpaid days worked in the month, untaken holiday and the pro-rata extra payments. It is always paid, however the contract ends.
• Severance compensates for losing the job and only exists in some cases: unfair, objective or collective dismissal, and the end of a temporary contract.

What is paid depending on the cause

• Unfair dismissal: 33 days of pay per year of service, up to 24 months. When a dismissal is declared unfair, the employer chooses between reinstating the worker or paying this severance.
• Objective dismissal, for economic, technical, organisational or production reasons: 20 days per year, up to 12 months, with 15 days’ notice. It is made available to the worker when dismissal is notified.
• Collective dismissal: 20 days per year with the same cap, although an agreement with staff can improve it.
• End of a temporary contract: 12 days per year, except for training contracts and replacement contracts.
• Fair disciplinary dismissal, resignation and mutual agreement: no legal severance.

Why many calculators get Spain wrong

• Service before 12 February 2012 counts at 45 days per year, not 33. Long-serving staff are the main reason the 720-day cap can be exceeded.
• The daily wage uses the whole annual salary, including extra payments and wage supplements, divided by 365.
• Periods under a year are prorated by months, so the treatment of odd days changes the result.
• Spanish employers may owe notice pay or procedural payments that this calculator does not model.

Tax on the severance

The legal severance for dismissal, as fixed in the Workers’ Statute, is exempt from income tax up to €180,000. Anything agreed above the legal minimum by collective agreement or contract is taxable. The finiquito is taxable as employment income.

Common mistakes

• Calculating severance on monthly pay without the extra payments.
• Applying 33 days to all service when part of it predates 2012.
• Forgetting the 24- or 12-month caps.
• Assuming resignation gives rise to severance: it does not.
• Counting holiday in working days: holiday is at least 30 calendar days.
• Leaving out the pro-rata extra payments when they are not spread across the months.

Limits of this calculator

• The reference wage is the annual salary you enter divided by 365. If your agreement or the judge uses another base, the result changes.
• Odd days count as a full month, the usual approach in courts, or proportionally if you choose. The law only says periods are prorated by months; we have not seen a rule that fixes the fraction.
• It does not calculate back pay during litigation, the 15 days’ notice in objective dismissal if not given, void dismissals or severance under collective agreements.
• Extra payments accrue by calendar half-year. Your agreement may set another period.
• The income-tax exemption is shown for unfair, objective and collective dismissal; the end of a temporary contract may need separate analysis.
• Amounts are in euros and gross.

Notice

This is an estimate, not legal advice, and it does not replace a Spanish labour lawyer or the calculation your employer gives you. Before signing a finiquito, check each item.