One of the most common questions we receive from our clients, especially business owners and self-employed workers, is: How much does an employee really cost me? The net salary they receive in their account each month is only part of the equation. For employers, the total cost of an employee includes: Gross salary + Social Security covered by the company + Severance pay in the event of dismissal.

1. Gross Salary
   The gross salary of the employee includes both what the employee receives in his/her account (net salary) and the personal income tax withholdings and social security contributions paid by the employee that are deducted from his/her payroll.
2. Social Security Social Security
   , which employers must pay for each worker, includes contributions for common contingencies, unemployment, vocational training, and work-related accidents. It represents between 31.75% and 32.95% of the Contribution Base, which generally corresponds to the gross salary of an average-wage worker.
3. Severance
   Pay : In temporary contracts, the employer is required to pay severance pay of 12 days per year worked upon termination of the contract. For permanent contracts, severance pay can be up to 33 days per year worked in the case of unfair dismissal, and 20 days in the case of fair dismissal. This potential cost is something employers should consider in their calculations.

Recommendation for the entrepreneur:

• Issue payrolls with the total cost to the company reflected in the payroll document. This way, you can clearly control each employee’s costs.
• For forecasting and budgeting purposes, the employer should take as an expense an approximation of the Base Salary x 1.40 to include all the additional costs of each worker.

At EXPERTALIA ASESORES SL , we can help you efficiently manage labor costs. We have extensive experience in labor , tax , and accounting-financial management.

Contact us to discuss your company’s needs and receive a personalized quote.