Extra payments in Spain (pagas extra): when they are paid and how they are taxed
Extra payments (pagas extra or gratificaciones extraordinarias) are a right under the Spanish Workers' Statute: at least two a year, one at Christmas and another in the month set by the collective agreement, usually June or July.
How much each extra payment is
The amount is set by the collective agreement. Most commonly each payment equals one month of base salary, sometimes with supplements such as seniority. If your contract states a gross annual salary in 14 payments, each extra payment equals one monthly payment: gross annual salary divided by 14.
When they accrue
Each payment accrues over a period, usually:
- Summer payment: January to June, or July to June of the following year.
- Christmas payment: January to December.
If you have not worked the full period, you receive the proportional part.
Spread payments
If the collective agreement allows it, extra payments can be spread across the 12 monthly payslips. You get more each month and there are no extra payments, but your annual pay is the same. We explain it in 12 or 14 payments?.
How they are taxed
- IRPF: the same withholding percentage applies as to your other payslips.
- Social Security: it is not deducted in the month of the extra payment, because it is already contributed for proportionally every month. That is why a net extra payment is slightly higher than a normal payslip.
If you leave the company
Any accrued but unpaid portion of your extra payments is included in your final settlement.