Unfair dismissal
33 days/year
max 24 months' pay
Objective / ERE
20 days/year
max 12 months' pay
Tax-free up to
€180,000
of the legal amount
Deadline to challenge
20 working days
from the dismissal
Estatuto de los Trabajadores and Ley del IRPF, checked 5 October 2026.
Work out your own indemnización
Your dates and pay, every dismissal type, and the tax-free part.
Which dismissal do you have?
The dismissal letter (carta de despido) states the type and the reason. That label decides almost everything, and it isn't final: if you challenge it, a court can reclassify it.
| Type | When it applies | Severance | Tax |
|---|---|---|---|
| Despido improcedente | No valid reason, or the employer accepts it is unfair (often at conciliation) | 33 days a year, max 24 months' pay | Exempt if agreed at conciliation or by a court |
| Despido objetivo | Economic, technical, organisational or production reasons; also unsuitability for the job or failure to adapt to changes. 15 days' notice | 20 days a year, max 12 months' pay | Exempt; for economic reasons up to the 33-day amount |
| Despido colectivo (ERE) | The same reasons, above a set number of staff in 90 days | 20 days a year minimum; often more by agreement | Exempt up to the 33-day amount |
| Fin de contrato temporal | A temporary contract reaches its end | 12 days a year | Taxable |
| Despido disciplinario procedente | Serious misconduct, upheld | None | Not applicable |
| Despido nulo | Discrimination, pregnancy, parental leave, rights violations | Reinstatement with back pay | Not applicable |
Estatuto de los Trabajadores, arts. 49, 51 to 56 (BOE). Your convenio colectivo or contract can improve on these.
How much severance you'd get: four examples
Dismissed on 31 October 2026, gross annual pay including the pagas extra. PayMetric Labs' own modelled estimate, using the same engine as our calculator:
| Service and pay | Unfair (33 days) | Objective (20 days) |
|---|---|---|
| 3 years, €28,000 | €7,595 | €4,603 |
| 7 years 8 months, €36,000 | €24,953 | €15,123 |
| 12 years, €45,000 | €48,822 | €29,589 |
| 20 years (pre-2012 start), €50,000 | €98,630 | €49,315 |
The method: divide annual pay by 365, multiply by the days for your dismissal type for each year of service, and prorate the last part year by months. Leftover days count as a whole month, so check that your employer hasn't rounded down.
Started before 12 February 2012? The years up to then count at the old 45-day rate. The total is capped at 720 days, unless the pre-2012 part alone is already higher, in which case that figure is the cap, up to 42 months' pay. On the 20-year example, the pre-2012 years alone are worth 240.0 days and the total hits the 720-day cap.
Is severance taxed in Spain?
Mostly not. Article 7.e of the Ley del IRPF exempts the amount the Estatuto makes compulsory, up to €180,000. No Social Security is charged on it either. Three conditions decide whether yours qualifies:
- Unfair dismissal: the 33-day amount is exempt only if it's recognised at the SMAC conciliation or by a court. A private deal with your employer isn't enough, which is why most unfair dismissals are settled at conciliation.
- Objective dismissal for economic or organisational reasons, and ERE: the exemption goes up to the 33-day amount, not just the 20 days you're owed. If your employer agrees to top it up to €24,953 in the main example, the whole payment is still tax-free.
- End of a temporary contract: the 12 days are fully taxable. The tax authority confirmed it in binding ruling V1088-26 of 18 May 2026, because the contract ends rather than being terminated. On €28,000 over three years, €2,762 becomes about €2,182 after IRPF.
Anything taxable that built up over more than two years of service is reduced by 30% before tax (art. 18.2 LIRPF). The Agencia Tributaria's manual sets out the limits.
The first 20 working days after a dismissal
- Get the carta de despido in writing, with the date it takes effect and the reason. For an objective dismissal the severance should be paid when you receive the letter.
- If you sign the finiquito, add 'no conforme' next to your signature. Signing doesn't stop you challenging the dismissal, but it helps.
- Check the figures: daily pay including the pagas extra, start date including any earlier contracts with the same employer, and part months rounded up.
- File the papeleta de conciliación at your region's SMAC within 20 working days. The clock stops while it's processed.
- Register with SEPE and apply for unemployment benefit (paro) within 15 working days (SEPE).
- If the conciliation fails, the next step is a claim at the Juzgado de lo Social. Many unions and labour lawyers give a first assessment for free.
Will the 33-day rule change?
Possibly, but not yet. After a complaint by the UGT union, the European Committee of Social Rights found that Spain's fixed cap doesn't compensate workers for their real loss, and the Council of Europe asked Spain again in June 2026 to change the law. On 9 September 2026 the Labour Minister, Yolanda Díaz, said compensation for unfair dismissal would be reformed to take account of each worker's circumstances.
There's no draft, no formula and no start date, and the talks with unions and employers are ongoing. Until a new law is in force, every dismissal is calculated on the current rules, and judges have so far applied them. We'll update this guide and the calculator when the reform is published.
Severance in Spain: questions
How much severance do I get in Spain?
It depends on how the job ended: 33 days' pay per year for an unfair dismissal (up to 24 months' pay), 20 days for an objective or collective dismissal (up to 12 months' pay), 12 days when a temporary contract ends, and nothing if a disciplinary dismissal is upheld. On €36,000 a year after 7 years and 8 months, that's €24,953 or €15,123.
How long do I have to challenge a dismissal?
20 working days (días hábiles) from the day after the dismissal takes effect, not counting weekends and public holidays. The first step is the conciliation request (papeleta de conciliación) at your region's SMAC. Miss the deadline and the dismissal stands, whatever its merits.
Can my employer choose to take me back instead of paying?
Yes. If a court rules the dismissal unfair, the employer has five days to choose between paying the 33-day compensation and reinstating you with back pay (salarios de tramitación). Most choose to pay. If the dismissal is ruled void (nulo), for example because it was discriminatory or happened during pregnancy, reinstatement is compulsory.
Why is my severance being taxed?
Usually because of one of three things: the unfair-dismissal amount wasn't recognised at conciliation or in court, the payment goes above the legal amount (or above €180,000), or it's the 12 days at the end of a temporary contract, which the tax authority confirmed in May 2026 is fully taxable. A taxable part from more than two years' service is reduced by 30% before tax.
Do I get unemployment benefit (paro) after a dismissal?
Yes, for any dismissal, including a disciplinary one, and at the end of a temporary contract, as long as you've contributed for at least 360 days in the last six years. Apply to SEPE within 15 working days. Resigning voluntarily doesn't give you the right to paro.
Is severance changing in 2026?
Not yet. In September 2026 the Labour Ministry said it will reform compensation for unfair dismissal so it reflects the real harm to each worker, after the European Committee of Social Rights and the Council of Europe found the 33-day cap insufficient. There's no formula or date, and talks with unions and employers are still under way. Until a law changes, the 33-day rule applies.
What's the difference between the finiquito and the indemnización?
The finiquito is what you're owed anyway: salary for the days worked, unused holiday and the prorated pagas extra. The indemnización is compensation for the dismissal and comes on top. Check both before you sign, and sign as 'no conforme' if you might challenge the dismissal.
Methodology and limits
Amounts follow the Estatuto de los Trabajadores (arts. 49.1.c, 53.1, 56.1 and DT 11ª) and Tribunal Supremo case law on prorating by months. Tax follows art. 7.e and 18.2 of the Ley del IRPF, the Agencia Tributaria's 2025 manual and DGT ruling V1088-26. Checked 5 October 2026.
Examples are PayMetric Labs' own modelled estimates using annual pay ÷ 365. Courts sometimes use the monthly salary or different pay elements, so your figure can differ. Estimated IRPF uses the general scale on top of a year's salary; regional rates and other income change it. General information, not legal advice.