Spain Severance Pay Calculator (Calculadora de Finiquito)
Calculate Spanish severance settlement (finiquito) and dismissal compensation (indemnización) from annual salary, service period, and dismissal type. Compare unfair dismissal and objective dismissal day-rates and caps.
How compensation differs by dismissal type
In Spain, the day-rate and cap used to calculate indemnización (severance compensation) depend on the type of dismissal.
| Dismissal type | Days per year of service | Cap |
|---|---|---|
| Unfair dismissal (despido improcedente) | 33 days (45 days for service before 12 Feb 2012) | 24 months' pay (42 months if mixed) |
| Objective dismissal (despido objetivo) | 20 days | 12 months' pay |
| Justified disciplinary dismissal / resignation | Not applicable | Not applicable (finiquito only) |
Regardless of the dismissal reason, finiquito items (unused vacation, prorated pagas extra) are always owed separately.
What are finiquito and indemnización in Spain?
In Spain, whatever the reason employment ends, the employer must pay the departing employee a "finiquito" (final settlement). The finiquito covers any unused annual vacation days and, if pagas extra (bonus payments) are not already prorated into monthly pay, a prorated share of the bonus owed for days worked so far. Depending on the type of dismissal, an additional "indemnización" (severance compensation) may also be owed, calculated from years of service and average daily pay according to a statutory day-rate and cap.
The amount of indemnización varies significantly by dismissal type. An unjustified "despido improcedente" (unfair dismissal) is compensated at 33 days' pay per year of service (45 days for any period before 12 February 2012), while an economically or technically justified "despido objetivo" (objective dismissal) is compensated at 20 days per year — both with statutory caps on the total months of pay. By contrast, a justified disciplinary dismissal or voluntary resignation triggers a finiquito but no indemnización. This tool estimates the full payout breakdown from just your annual salary, contract period, and dismissal type.
Sources used in this calculation
Statutory figures such as tax and insurance rates come from the public bodies listed below. They change when the law is revised, so please also check the primary source before relying on the result for an important decision.
- Spain severance/dismissal indemnity day-rate & caps — Spanish Official State Gazette (BOE) Effective from 2012-02 ／ Last checked 2026-09-05
How to use the finiquito calculator
- Enter your annual gross salary Enter your total annual gross salary before tax and social security deductions, including pagas extra.
- Enter the contract start and end dates The end date should be the day the dismissal (or resignation) actually takes effect.
- Enter unused vacation days Enter the number of annual paid vacation days not yet taken as of the dismissal date.
- Choose whether pagas extra are prorated Select "prorated" if bonus payments are already included in your monthly pay, or "not prorated" if they are paid separately.
- Choose the dismissal type and review the result Selecting unfair dismissal, objective dismissal, or justified disciplinary dismissal/resignation shows the finiquito and indemnización breakdown and the estimated total payout.
Tips for getting more out of it
- The prorated pagas extra calculation assumes none has been received yet this calendar year — adjust the figure yourself if you already received a mid-year bonus payment.
- If you have worked since before 12 February 2012, entering the correct contract start date automatically applies the mixed old/new day-rate calculation.
- This tool shows only the statutory minimum. If your collective bargaining agreement (convenio colectivo) or individual contract provides for more, that higher amount applies.
- The classification of a dismissal (procedente/improcedente/nulo) stated in the dismissal letter (carta de despido) can be overturned by a labour court (juzgado de lo social).
- Both finiquito and indemnización payments may be partially exempt from income tax (IRPF) withholding. Confirm the exact tax treatment with a professional.
When to use this tool
Check a severance offer from your employer
Estimate the statutory minimum with this tool and compare it against what your employer has offered, to check whether the offer meets or falls short of the legal minimum.
Compare unfair dismissal vs. objective dismissal amounts
For the same salary and years of service, the compensation can differ substantially depending on the dismissal type (33 days/year vs. 20 days/year). Switch the dismissal type to see the difference.
Estimate compensation for long-tenured employees spanning the 2012 reform
If you have worked since before 12 February 2012, that portion of your service uses the older 45 days/year rate. Simply enter your contract start date and the mixed calculation is handled automatically.
Check your finiquito settlement before resigning
Even without a dismissal, you can use this tool to estimate the finiquito portion (unused vacation and pagas extra settlement) that is always owed regardless of why employment ends.
Glossary
- Finiquito
- A final settlement payment owed by the employer when employment ends, regardless of the reason. It covers unused annual vacation days and, if not already prorated, a share of pagas extra bonus payments.
- Indemnización (severance compensation)
- A statutory compensation payment tied to the type of dismissal (e.g. unfair or objective dismissal), calculated from years of service and average daily pay. Not owed for justified disciplinary dismissal or voluntary resignation.
- Pagas extra
- Bonus payments common in Spanish employment practice, paid separately from the regular monthly salary (typically twice a year, in summer and at Christmas). They may be prorated into monthly pay or paid as lump sums.
- Annual gross salary
- The total annual gross salary before tax and social security deductions, used as the base for the daily pay rate in severance calculations. Include pagas extra in the total.
- 2012 labour reform (Real Decreto-ley 3/2012)
- A labour market reform that took effect on 12 February 2012, lowering the unfair dismissal day-rate from 45 to 33 days per year of service and the cap from 42 to 24 months' pay. Transitional rules apply to contracts that started before this date.
Frequently asked questions
Side Note — Why Spain's severance pay dropped by nearly half after 2012
Real Decreto-ley 3/2012, which took effect on 12 February 2012, was introduced as a centerpiece of Spain's labour market reform amid the deepening European debt crisis. Until then, unfair dismissal compensation stood at 45 days' pay per year of service with a cap of 42 months' pay — among the most generous in Europe. The reform cut this to 33 days per year with a 24-month cap, aiming to reduce dismissal costs, encourage hiring, and address an unemployment rate that had climbed above 25% at the time.
What makes the reform interesting is that it did not simply shift every existing worker to the new rate overnight. For employees already working before the effective date, the period up to that date is calculated under the old rule (45 days/year) and the period after under the new rule (33 days/year). This means longer-tenured employees benefit from the older rate for a larger share of their service — creating a somewhat intricate dual structure where two colleagues at the same company, differing only in how long they've worked there, can be entitled to different compensation formulas.
The reform drew strong opposition from labour unions, triggering several nationwide general strikes in 2012, while business groups supported the loosened dismissal rules as a way to encourage new hiring. More than a decade later, the 33 days/year, 24-month cap standard remains unchanged, and the reform is widely regarded as a major turning point in Spanish labour law.