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Paying the Director and Non-Resident Staff of a Spanish SL: IRNR, RETA and the Estatutos Trap
An administrador's salary is not automatic — the estatutos must allow it. Non-resident directors pay 19% or 24% IRNR. Founders owning over 50% must register in RETA. Here is how payroll and Social Security work for foreign-owned Spanish companies.
Paying the Director and Non-Resident Staff of a Spanish SL: The Rules Most Founders Discover Too Late
After incorporating a Spanish SL, the first operational question most founders face is simple: how do I pay myself? The answer is neither simple nor automatic. The administrador's remuneration, the applicable tax withholding, and the Social Security treatment all depend on decisions made at incorporation — and on where the director actually lives.
The Administrador Remuneration Problem
A Spanish SL is managed by its administrador — the appointed director who holds legal authority over the company. The administrador can be a shareholder, an external professional or, most commonly, the founder themselves.
The critical point that most foreign founders discover after incorporation: an administrador is not automatically entitled to a salary. Under Spanish corporate law (Ley de Sociedades de Capital), the administrador's remuneration must be explicitly provided for in the estatutos sociales — the company's articles of association. If the estatutos do not contain a remuneration clause, the position is legally gratuitous (gratuito), and any payment made to the administrador lacks a valid legal basis.
This is not a formality. A Spanish bank processing a transfer from the SL's account to the administrador's personal account will request documentation of the legal basis for the payment. The Agencia Tributaria assesses whether remuneration declared in tax returns corresponds to the statutory framework. Getting this wrong at incorporation creates a problem that requires a notarial amendment to the estatutos to correct — an avoidable delay.
The two standard approaches are:
For foreign founders who intend to pay themselves from the SL from day one, the remuneration clause should be included in the original estatutos drafted at incorporation.
The critical point that most foreign founders discover after incorporation: an administrador is not automatically entitled to a salary. Under Spanish corporate law (Ley de Sociedades de Capital), the administrador's remuneration must be explicitly provided for in the estatutos sociales — the company's articles of association. If the estatutos do not contain a remuneration clause, the position is legally gratuitous (gratuito), and any payment made to the administrador lacks a valid legal basis.
This is not a formality. A Spanish bank processing a transfer from the SL's account to the administrador's personal account will request documentation of the legal basis for the payment. The Agencia Tributaria assesses whether remuneration declared in tax returns corresponds to the statutory framework. Getting this wrong at incorporation creates a problem that requires a notarial amendment to the estatutos to correct — an avoidable delay.
The two standard approaches are:
- Retribución fija: a fixed annual salary specified in the estatutos (or by shareholder resolution if the estatutos authorise this)
- Retribución variable: performance-linked pay, which requires a shareholder resolution (acuerdo de la junta) determining the amount each year
For foreign founders who intend to pay themselves from the SL from day one, the remuneration clause should be included in the original estatutos drafted at incorporation.
Tax Withholding on Administrador Salary: Resident vs Non-Resident
The applicable tax and withholding rate on the administrador's salary depends entirely on where the administrador is tax resident.
Resident Administrador (IRPF)
An administrador who is tax resident in Spain is subject to standard Spanish personal income tax — IRPF (Impuesto sobre la Renta de las Personas Físicas). The company must apply a withholding (retención) when paying the salary and remit it to the Agencia Tributaria quarterly via Modelo 111 (declaration of withholdings made), with an annual summary via Modelo 190.
The standard IRPF retention rate for administradores and directors is 35% of gross salary — significantly higher than the rate applied to ordinary employees. For companies with annual revenue below €100,000, a reduced retention rate of 19%applies during the first two years of activity.
An administrador who is tax resident in Spain is subject to standard Spanish personal income tax — IRPF (Impuesto sobre la Renta de las Personas Físicas). The company must apply a withholding (retención) when paying the salary and remit it to the Agencia Tributaria quarterly via Modelo 111 (declaration of withholdings made), with an annual summary via Modelo 190.
The standard IRPF retention rate for administradores and directors is 35% of gross salary — significantly higher than the rate applied to ordinary employees. For companies with annual revenue below €100,000, a reduced retention rate of 19%applies during the first two years of activity.
Non-Resident Administrador (IRNR)
An administrador who is not tax resident in Spain is subject to IRNR — Impuesto sobre la Renta de No Residentes (Non-Resident Income Tax) on income sourced in Spain, rather than IRPF.
The IRNR withholding rates on director remuneration are:
The company retains and remits the IRNR monthly or quarterly via Modelo 216, with an annual informative summary via Modelo 296. The non-resident administrador separately files Modelo 210 to declare their Spanish-sourced income if required.
An administrador who is not tax resident in Spain is subject to IRNR — Impuesto sobre la Renta de No Residentes (Non-Resident Income Tax) on income sourced in Spain, rather than IRPF.
The IRNR withholding rates on director remuneration are:
Residency Status | IRNR Rate |
EU / EEA resident | 19% |
Non-EU resident (no applicable DTAA) | 24% |
Non-EU resident with DTAA | Reduced by treaty (varies) |
The company retains and remits the IRNR monthly or quarterly via Modelo 216, with an annual informative summary via Modelo 296. The non-resident administrador separately files Modelo 210 to declare their Spanish-sourced income if required.
For non-resident administradores from countries with a Double Taxation Agreement with Spain — which includes the UK, Germany, India, Israel, UAE and most countries where Voixa's clients are based — the applicable rate on director remuneration may be reduced by treaty. The specific reduction depends on the treaty's article covering directors' fees or employment income, and the administrador must present a certificado de residencia fiscal issued by their home tax authority to claim the reduced rate.
Social Security: The RETA Rule That Controls Everything
For foreign founders who are both shareholders and administradores of their Spanish SL, the Social Security treatment is determined by the percentage of the company they own — not by their role title.
The controlling rule in Spain is the RETA (Régimen Especial de Trabajadores Autónomos) — the self-employed Social Security regime. Under Spanish law:
The RETA cuota (monthly Social Security contribution) in 2025 ranges from approximately €200 to €530 per month, based on the net income bracket selected, under the real income-based contribution system that replaced the prior flat-rate structure from 2023.
For non-resident administradores who do not physically work in Spain, the Spanish Social Security obligation generally does not arise — provided the administrador has no habitual physical presence in Spain for the company's activity. Where the administrador visits Spain regularly to manage the company, Social Security and PE implications may both arise and require assessment. The applicable bilateral Social Security treaty (if any) between Spain and the administrador's country of residence determines which country's system applies.
The controlling rule in Spain is the RETA (Régimen Especial de Trabajadores Autónomos) — the self-employed Social Security regime. Under Spanish law:
- A socio-administrador who owns more than 50% of the SL's share capital is required to register as a trabajador autónomo in RETA, regardless of whether they have an employment contract. They cannot be covered by the general employee Social Security regime (Régimen General).
- A socio-administrador owning between 25% and 50% is also generally required to register in RETA in practice, particularly where they perform management functions.
- A socio-administrador owning less than 25% may be able to register in the Régimen General as an employed director, depending on the structure and whether there is a genuine subordinated employment relationship.
The RETA cuota (monthly Social Security contribution) in 2025 ranges from approximately €200 to €530 per month, based on the net income bracket selected, under the real income-based contribution system that replaced the prior flat-rate structure from 2023.
For non-resident administradores who do not physically work in Spain, the Spanish Social Security obligation generally does not arise — provided the administrador has no habitual physical presence in Spain for the company's activity. Where the administrador visits Spain regularly to manage the company, Social Security and PE implications may both arise and require assessment. The applicable bilateral Social Security treaty (if any) between Spain and the administrador's country of residence determines which country's system applies.
Employment Contracts for Spanish-Based Employees
For employees who physically work in Spain — whether Spanish nationals or foreign residents with a valid work permit — the Spanish labour framework applies in full.
Key parameters for 2025:
The company must register as an employer with the TGSS (Tesorería General de la Seguridad Social), register each employee before their first working day (alta en Seguridad Social), issue monthly payslips (nóminas) and remit withholdings and contributions monthly.
For a Spanish SL with a single salaried employee earning €30,000 gross per year, the total annual employment cost to the company is approximately €40,000 after employer Social Security contributions — a figure that surprises founders accustomed to employment costs in lower-burden jurisdictions.
Key parameters for 2025:
- SMI (Salario Mínimo Interprofesional): €1,134 per month gross (14 payments per year), applicable to all employment contracts in Spain
- Convenio colectivo: the sectoral collective agreement applicable to the company's activity — which may set minimum salaries higher than the SMI and determine working hours, leave and other conditions
- Social Security employer contributions: approximately 29.9% of gross salary (covering contingencias comunes, unemployment, professional training and wage guarantee fund), paid by the company in addition to the gross salary
- Employee Social Security contribution: approximately 6.35% deducted from gross salary
The company must register as an employer with the TGSS (Tesorería General de la Seguridad Social), register each employee before their first working day (alta en Seguridad Social), issue monthly payslips (nóminas) and remit withholdings and contributions monthly.
For a Spanish SL with a single salaried employee earning €30,000 gross per year, the total annual employment cost to the company is approximately €40,000 after employer Social Security contributions — a figure that surprises founders accustomed to employment costs in lower-burden jurisdictions.
Non-Resident Employees Working Outside Spain
For foreign founders who want to hire team members who live and work outside Spain, the administrative picture is substantially more complex — and more frequently mishandled.
A Spanish SL that employs a worker who habitually works in France, Poland or India does not simply apply Spanish payroll rules to that worker. The worker's employment income is taxable in the country where the work is performed, not where the employer is registered. Spanish Social Security does not cover work performed abroad under standard rules. The employer — the Spanish SL — has payroll and Social Security registration obligations in the employee's country of residence under that country's domestic law.
The practical options for a Spanish SL with non-resident staff are:
A Spanish SL that employs a worker who habitually works in France, Poland or India does not simply apply Spanish payroll rules to that worker. The worker's employment income is taxable in the country where the work is performed, not where the employer is registered. Spanish Social Security does not cover work performed abroad under standard rules. The employer — the Spanish SL — has payroll and Social Security registration obligations in the employee's country of residence under that country's domestic law.
The practical options for a Spanish SL with non-resident staff are:
1. Local employment contract in the employee's country — the Spanish SL establishes payroll compliance in the employee's country of residence. This is correct but administratively intensive for small companies with one or two foreign employees.
2. Employer of Record (EOR) service — a third-party EOR employs the worker locally in their country of residence and invoices the Spanish SL a service fee covering salary, employer contributions and administration. This is the most common solution for Spanish SLs with international remote teams and avoids the need to register as an employer in multiple jurisdictions.
2. Employer of Record (EOR) service — a third-party EOR employs the worker locally in their country of residence and invoices the Spanish SL a service fee covering salary, employer contributions and administration. This is the most common solution for Spanish SLs with international remote teams and avoids the need to register as an employer in multiple jurisdictions.
3. Contractor / service agreement — the worker invoices the Spanish SL as a freelancer or through their own local company. This is administratively simple but requires that the arrangement reflects genuine commercial independence. A long-term exclusive relationship with fixed "working hours" dressed as a freelance contract is subject to reclassification as an employment relationship under both Spanish and local law — with retroactive Social Security and tax exposure.
4. Posted worker (trabajador desplazado) — where a foreign employee temporarily works in Spain on behalf of a non-Spanish employer or a Spanish parent entity, the posted workers framework applies: the worker remains on their home country's Social Security (evidenced by an A1 certificate) while Spanish labour law minimum standards apply to the period of posting.
4. Posted worker (trabajador desplazado) — where a foreign employee temporarily works in Spain on behalf of a non-Spanish employer or a Spanish parent entity, the posted workers framework applies: the worker remains on their home country's Social Security (evidenced by an A1 certificate) while Spanish labour law minimum standards apply to the period of posting.
The Administrador Sin Retribución: When Not Paying Is a Valid Strategy
Not every founder wants to extract income through the administrador salary channel. For founders whose primary income comes from a foreign company (through dividends, royalties or service fees) and who operate the Spanish SL as a holding or market access vehicle rather than a personal income source, designating the administrador role as gratuito — unpaid — is a valid and common approach.
An unpaid administrador has no IRPF, IRNR or RETA obligations arising from their role in the Spanish SL. The company pays no payroll taxes on the position. This simplifies the compliance calendar significantly and is entirely lawful provided the estatutos reflect the gratuito designation from the outset.
The trade-off is that the administrador cannot receive salary from the SL without a subsequent notarial amendment to the estatutos — which requires time and cost. Founders who anticipate paying themselves through the SL should build the retribución clause in from day one.
An unpaid administrador has no IRPF, IRNR or RETA obligations arising from their role in the Spanish SL. The company pays no payroll taxes on the position. This simplifies the compliance calendar significantly and is entirely lawful provided the estatutos reflect the gratuito designation from the outset.
The trade-off is that the administrador cannot receive salary from the SL without a subsequent notarial amendment to the estatutos — which requires time and cost. Founders who anticipate paying themselves through the SL should build the retribución clause in from day one.
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