Dismissal Severance Calculator Spain | Calculate Compensation

Complete Legal Guide to Dismissal Severance in Spain (Workers' Statute)

Severance pay (indemnización por despido) in Spain is financial compensation mandated by the Workers' Statute (Estatuto de los Trabajadores) when an employment relationship is terminated by the employer or when a fixed-term contract expires.

The compensation amount depends directly on three factors: total gross annual salary (including prorated extra paychecks), exact length of service (measured in months, with partial calendar months rounded up to full months for dismissals), and the legal cause of termination.

Statutory Scales and Dismissal Types

Spanish labor law defines the following severance compensation tiers:

Unfair Dismissal (Despido Improcedente - Post Feb 12, 2012): 33 days of salary per year worked, capped at a maximum of 24 monthly payments (720 days).
Unfair Dismissal (Transitional Tier - Pre Feb 12, 2012): 45 days of salary per year worked, capped at 42 monthly payments (1,260 days). Both tiers are added together, subject to statutory limits.
Objective / Redundancy Dismissal (Despido Objetivo - Article 52 ET): 20 days of salary per year worked for economic, technical, or organizational grounds, capped at 12 monthly payments (360 days).
End of Fixed-Term Contract (Fin de Contrato Temporal - Article 49.1.c ET): 12 days of salary per year worked, calculated strictly proportional to calendar days of service.
Disciplinary Dismissal (Despido Disciplinario Procedente): 0 € severance.

Daily Wage Calculation & Tax Exemption Threshold

The calculation formula uses the worker's daily wage:

Daily Wage = (Gross Monthly Salary × Number of Paychecks) / 365 (or 366 in leap years).
Severance = Daily Wage × (Days per Year / 12) × Seniority in Months.
Tax Exemption (Article 7.e LIRPF): Statutory severance is 100% exempt from personal income tax and Social Security withholding up to a maximum limit of 180,000 €.

Post-Dismissal Procedures: Settlement Pay & Unemployment Benefits

Following an employment termination in Spain, workers must also verify their final settlement and benefit entitlements:

Final Settlement (Finiquito): Covers accrued unpaid salary, prorated extra payments, and untaken vacation days. Calculate your settlement with our Finiquito Settlement Calculator.
Unemployment Benefit (Paro): Check your monthly benefit amount and duration based on accumulated contribution bases with our Unemployment Benefit Calculator.

Practical Example

Example 1: Objective Dismissal (4 Years Seniority, 2,000 €/month × 14 Paychecks)

Input: Gross: 28,000 €/year | Daily Wage: 76.71 €/day | Seniority: 48 months (4 years) | Objective (20 days/year)

Output / Result: Total Severance: 6,136.80 € (80 statutory days of salary) | 100% Tax Exempt

Calculates standard economic redundancy severance without reaching the 12-month cap.

Example 2: Unfair Dismissal (Hired in 2018, 6 Years Seniority, 36,000 €/year)

Input: Gross: 36,000 €/year | Daily Wage: 98.63 €/day | Seniority: 72 months (6 years) | Unfair (33 days/year)

Output / Result: Total Severance: 19,528.74 € (198 statutory days of salary) | 100% Tax Exempt

Calculates post-2012 unfair dismissal scale well below the 24-month cap (72,000 €).

How to Calculate Dismissal Severance in 3 Steps

Enter Start and Dismissal Dates

Select your contract start date and final effective day of service to compute exact seniority in months and calendar days.

Enter Gross Salary & Paycheck Format

Type your base gross earnings (monthly or annual) and select whether extra bonuses are paid in 12 prorated or 14 separate payments.

Select Dismissal Cause & View Breakdown

Choose Unfair, Objective, or Temporary Expiry to immediately obtain your statutory daily salary, applicable compensation days, and net total.

Frequently Asked Questions about Severance & Dismissal

How many days of severance pay correspond to an unfair dismissal in Spain?

For unfair dismissal (despido improcedente), statutory compensation is 33 days of salary per year of service (capped at 24 monthly payments) for work performed after February 12, 2012. For service prior to February 12, 2012, compensation is calculated at 45 days per year (capped at 42 monthly payments).

What statutory severance applies to an objective or economic dismissal?

Objective dismissal (based on economic, technical, organizational, or production grounds under Article 52 ET) grants 20 days of salary per year worked, with a statutory maximum ceiling of 12 monthly payments (360 days of salary).

How is severance calculated upon the expiration of a fixed-term contract?

Under Article 49.1.c of the Workers' Statute, fixed-term and temporary contracts ending on or after January 1, 2015 entitle the employee to 12 days of salary per year of service, calculated proportionally to actual calendar days worked.

Is dismissal compensation subject to personal income tax (IRPF) in Spain?

Statutory mandatory severance pay established by the Workers' Statute or judicial conciliation is 100% exempt from IRPF up to a legal maximum limit of 180,000 € (Article 7.e of the Spanish Personal Income Tax Law). Any voluntary excess paid by the employer is taxed as ordinary employment income.

Dismissal Cause	Unfair Dismissal
Days Worked	0 days (0 months)
Daily Salary	0.00 € / day
Days of Severance per Year	33 days / year
Salary below SMI daily minimum (€46.83/day). Check contract terms.
Estimated Compensation	0,00 €

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