Gross to net Payroll Engine Spain

G2N Nova is the premier Gross-to-Net Engine for Spain, delivering precise, real-time payroll calculations while ensuring full compliance with Spanish regulations. Supporting payroll processing in Spain and over 100 other countries, it guarantees 100% accuracy without compromising data security.

Unlike traditional payroll solutions, G2N Nova performs gross-to-net calculations without storing or accessing any employee-identifiable information. This ensures that all sensitive payroll data remains securely within the client’s own systems, simplifying compliance with strict data privacy laws.

Discover a smarter, more secure way to handle payroll in Spain. Request a demo today!

Gross to net payroll tax engine for Spain

Are you looking for real-time payroll tax updates in Spain? Powered by G2N’s Payroll Tax Engine Spain, our cutting-edge cloud-based platform delivers continuous updates tailored to Spanish payroll regulations. This advanced tax engine for Spain seamlessly integrates with historical payroll data in pay statements, ensuring accuracy and compliance.

Your Objective

• Maintain your current HCM/ERP/WFM software without switching to an external payroll provider.
• Partner with a trusted provider offering a plug-and-play solution for payroll tax updates.

Solutions

1. HCM/ERP/WFM Systems: G2N integrates effortlessly with all major HCM, ERP, Time, Pay, and Attendance systems, allowing organizations to continue using their existing infrastructure without disruption.
2. System Integrators: G2N enables system integrators to easily add cross-border payroll functionality to their platforms. This simplifies international payroll management while giving integrators full control over the user experience, ensuring tailored and seamless payroll solutions for their clients.
3. Enterprises: Simplify your payroll management with G2N’s unified platform. Eliminate processing headaches, free up valuable time to grow your business, enhance your products, or finally take that much-needed vacation!
4. SMEs: Built for flexibility and growth, G2N scales effortlessly to accommodate your expanding workforce and evolving compliance needs. From 1 to 120,000 records, G2N ensures accurate real-time gross-to-net payroll processing, making it the perfect solution for small and medium-sized businesses.
5. Service Providers: Focus on what matters most to your clients and your business with G2N’s seamless payroll processing platform, trusted by leading Fortune Global 500 companies.

How It Works

Input

• Employee Data: Captures key details, including salary, benefits, and personal information.
• Leave Management: Tracks and processes employee leave, absences, and time off.
• Time & Activity Tracking: Monitors work hours, attendance, and overtime to ensure accurate payroll calculations.

G2N Nova Process

• Country-Level Filing: Integrates with Spanish tax and social security authorities to ensure precise statutory filings in compliance with local regulations.
• Country-Level Compliance: Adheres to Spain’s payroll laws, supported by an in-house compliance team to guarantee regulatory alignment.
• Global Payroll Engine – Gross-to-Net Computation: Executes real-time calculations, acting as a payroll calculator for Spain to ensure accurate salary processing, deductions, and tax compliance.

Output

• General Ledger (GL): Generates detailed financial records for accounting and reconciliation.
• Treasury Management: Provides reports for effective cash flow and treasury planning.
• Bank File Generation: Prepares secure bank files for seamless payroll disbursement.
• Payslips: Issues detailed payslips outlining deductions, taxes, and net pay, serving as an accurate salary calculator for Spain.

G2N Nova is a flexible, scalable, and compliant payroll solution designed to meet Spain’s payroll processing needs. It seamlessly integrates with existing systems, delivering a transparent and efficient payroll experience.

Features of G2N Payroll Engine Spain

Gross-to-Net Calculation

G2N Payroll Engine Spain provides a precise payroll calculator for Spain, ensuring accurate gross-to-net payroll calculations that fully comply with Spanish labor laws and tax regulations.

Compliance with Spanish Tax Authorities

Our solution guarantees full adherence to Spain’s payroll and tax regulations, enabling seamless payroll processing while ensuring complete compliance with local legal requirements.

Data Privacy and Security

G2N prioritizes employee data protection by maintaining strict confidentiality and safeguarding sensitive payroll information in accordance with Spain’s GDPR and data privacy laws.

Automated API Integration with Payroll Systems

G2N seamlessly integrates with Spanish payroll systems through automated APIs, facilitating smooth and efficient payroll tax management while ensuring regulatory compliance.

GDPR Certified, SOC 1 & SOC 2 Compliant

Our platform meets the highest international security and privacy standards, including GDPR certification, SOC 1 & SOC 2 compliance, ensuring secure and reliable payroll processing in Spain.

ISO 20000, ISO 27001, and ISO 27701:2019 Certified

G2N holds ISO 20000, ISO 27001, and ISO 27701:2019 certifications, guaranteeing top-tier service quality, robust security, and effective privacy management for businesses operating in Spain.

OWASP ASVS 3.0 Compliant

Our payroll solution adheres to OWASP ASVS 3.0 standards, protecting payroll data from potential vulnerabilities and ensuring a secure, compliant payroll experience in Spain.

Benefits

Everything you need to know about Gross to Net Calculation in Spain

Calculating gross-to-net salary in Spain requires considering multiple factors, including salary structure, tax deductions, employment conditions, and personal circumstances. Below is a breakdown of the essential elements that influence payroll calculations in Spain.

Key Information Required for Gross-to-Net Salary Calculation

 Personal and Family Situation

• Marital Status: Single, Married, Divorced, Separated, or Widower
• Dependents: Number of people under financial care, including children and elderly relatives

Type of Employment Contract

• General employment contract
• Fixed-term contracts of less than one year (subject to different tax rates)

Professional Category

Spain’s labor law classifies employees into categories that impact tax rates and deductions:

Engineers and Graduates

Administrative and Workshop Managers

Non-Qualified Assistants

Administrative Officers

Subalterns

Administrative Assistants

First and Second Class Officers

Third Officers and Specialists

Engineers and Qualified Assistants

Pawns (unskilled workers)

Workers under 18 years of age

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Disability Status

Disability levels impact tax reductions and social security contributions:

• No disability
• 33% – 65% disability
• 33% – 65% with assistance
• 65% or greater disability

Geographical Mobility

If an employee relocates to another municipality for work, tax benefits may apply.

Autonomous Community

Each region in Spain has specific tax rules, exemptions, and deductions. The applicable tax regime depends on the employee’s residency status:

• Non-residents (subject to the Beckham Law tax regime)
• Residents in one of Spain’s Autonomous Communities, including:

• Andalusia
• Aragon
• Asturias
• Balearic Islands
• Canary Islands
• Cantabria
• Ceuta and Melilla
• Castile-La Mancha
• Castile-Leon
• Catalonia
• Extremadura
• Galicia
• Madrid
• Murcia
• La Rioja
• Valencia
• Navarre
• Basque Country

People Under Financial Care

• Relationship Type: Ascendant (parent/grandparent) or Descendant (child/grandchild)
• Age of dependent
• Dependent’s disability status

Flexible Remuneration (Retribución Flexible)

Employees may receive part of their salary as non-cash benefits, which may offer tax advantages:

• Health Insurance
• Meal Vouchers
• Transport Allowance
• Nursery or Childcare Benefits

Activity Type & IVA (VAT) Tax Rate

For professionals and self-employed workers, the applicable IVA (VAT) tax rate depends on the nature of the service:

• No IVA (exempt services)
• Regular Rate (21%)
• Reduced Rate (10%)
• Super Reduced Rate (4%)

Social Security Contributions

Starting January 1, 2025, a new solidarity contribution will be introduced in Spain as established by Royal Decree-Law 2/2023. This additional charge is designed to strengthen the sustainability of public pensions by applying to those employees whose earnings exceed a specified monthly threshold.

What Is the Additional Solidarity Contribution?

1. Purpose: The measure aims to ensure the long-term viability of Spain’s public pension system by imposing an extra contribution on high earners.
2. Threshold: For 2024, the maximum contribution base is set at €4,720.5 per month. The additional contribution will only apply to the portion of an employee’s salary that exceeds this limit. Importantly, this extra contribution does not create any additional benefit rights.

Contribution Rates and Progression

The contribution is structured into three progressive tiers based on how much the earnings exceed the maximum base:

• Tier 1 (Up to 10% above the base):
  • 2025 Rate: 0.92%
  • 2045 Projection: 5.5%
• Tier 2 (10% to 50% above the base):
  • 2025 Rate: 1%
  • 2045 Projection: 6%
• Tier 3 (Above 50% of the base):
  • 2025 Rate: 1.17%
  • 2045 Projection: 7%

Splitting the Contribution Between Employer and Employee

The contribution is divided in the same manner as common contingencies:

• Employer Contribution: 83%
• Employee Contribution: 17%

For example, in 2025:

• Tier 1:
  • Employer: 0.77%
  • Employee: 0.15%
• Tier 3:
  • Employer: 0.98%
  • Employee: 0.19%

These rates are expected to increase proportionally by 2045.

Practical Example: Impact on a €10,000 Monthly Salary

Consider an employee earning €10,000 per month. With the 2024 maximum base in place, the additional solidarity contribution would be calculated as follows:

In 2025

1. Tier 1:
   • Employer: €3.63
   • Employee: €0.71
2. Tier 2:
   • Employer: €15.67
   • Employee: €3.21
3. Tier 3:
   • Employer: €28.61
   • Employee: €5.55

Total Monthly Contribution

• Employer: €47.92
• Employee: €9.46
• Combined Total: €57.38

In 2045 (Projected Rates)

• Tier 1:
  • Employer: €21.62
  • Employee: €4.34
• Tier 2:
  • Employer: €94.41
  • Employee: €18.88
• Tier 3:
  • Employer: €170.51
  • Employee: €33.86

Total Monthly Contribution

• Employer: €286.55
• Employee: €57.05
• Combined Total: €343.60

Equity Mechanism (MEI) contribution

The Intergenerational Equity Mechanism (MEI) is a contribution designed to reinforce Spain’s public pension system by ensuring long-term sustainability. This mechanism replaces the previous pension reserve fund approach and gradually increases contribution rates over time.

Updated MEI Contribution Rates for 2025

The MEI contribution applies to all workers and is automatically deducted from payroll. Employers bear the larger portion of the contribution, while employees contribute a smaller percentage. The incremental increase in 2025 aligns with Spain’s efforts to strengthen pension funding while distributing the responsibility between businesses and workers.

Personal Income Tax

Spain’s tax framework includes various tax categories. For this discussion, we focus on two key types: the Autonomous Tax—set by each region—and the Income Tax for Sociedad Limitada (corporate entities). The following details outline the tax rates applicable for the year ended 31st December 2025.

Income Tax Rates for Sociedad Limitada in the Community of Madrid

The table below presents the combined state and regional income tax rates for Sociedad Limitada companies, using the Community of Madrid as an example. Note that while these rates are government-set for Madrid, other regions may have different figures.

Tax Rates Across Autonomous Regions

Each Autonomous Community in Spain can set its own tax rates. Below is an overview of the current rates by region:

• Basque Country: 22%
• Navarre: 20%
• Catalonia: 20%
• Asturias: 20%
• Balearic Islands: 20%
• Extremadura: 20%
• Aragon: 20%
• Cantabria: 20%
• Castile and León: 20%
• Castilla-La Mancha: 20%
• Ceuta: 20%
• Melilla: 20%
• Murcia: 20%
• Andalusia: 20%
• Galicia: 20%
• Valencia: 20%
• Canary Islands: 19%
• La Rioja: 19%
• Madrid: 19%

Conclusion

Discover the efficiency of modern payroll management with a personalized demo of G2N. Witness how our cutting-edge platform simplifies every step of payroll processing—from precise gross-to-net calculations to ensuring full compliance with local regulations. Request your tailored demo today and see how G2N can transform your payroll operations, boost efficiency, and deliver unmatched accuracy for your organization.

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