Firstly, and on the back of the publication of the General State Budgets corresponding to 2018, a significant improvement on paternity leave was introduced. As from 5 July, paternity leave was extended from four to five weeks. Another change was also introduced regarding how the leave is taken. Under this regulation, the last week of leave can be used separately within the following nine months as from the data of birth of the child.
In October, the Supreme Court decreed that maternity payments are to be exempt from income tax, which entails a change in the criteria the Tax Agency has established to date. This change is applied retrospectively, going back to 2014. As such, repayments can be requested for those periods.
Based on this change, which took effect in November, the Tax Agency established that such exemption would also apply to paternity leave.
Contribution benefits – Maternity and paternity leave in Spain
It is also important to mention, that when a worker is on maternity or paternity leave, the company may receive benefits of up to 100% of its contributions for employment contracts to substitute said worker. These benefits are applied to the company’s contributions corresponding to both workers.
These benefits are also applicable to the hiring of personnel that substitute workers who have their contracts put on hold, due to risks during pregnancy or during breastfeeding, by means of provisional contracts that are valid for the duration that such workers are on leave due to the corresponding situation.
To apply these benefits, the hired worker will have to be registered as a job seeker and the company must be up to date with the payment of its tax and social security obligations when the contract is formalised and during the entire period in which the benefits are applied.
It is also important to mention, that once the provisional contract has terminated, the company should not give any severance pay to the worker due to the termination of the employment contract.
If you have an employee who will soon be eligible for maternity and paternity leave in Spain and you would like to know how you can receive these benefits, please do not hesitate to contact us.
Teresa Abril
