How to calculate the final settlement in Spain in 2026: formula, examples and calculator

Every time a contract ends in Spain, two people sit down to do the same sum. The person leaving wants to know how much they are owed, and the employer wants to know how much it will cost. Both usually get it wrong for the same reason: they mix up two things the law keeps apart, the final settlement (finiquito) and severance pay (indemnización).

Here is what goes into each one, the formula for every part, a worked example with real figures and a calculator to check your own case.

In short. The final settlement is what has already been earned and not yet paid: salary for the days worked in the last month, holiday not taken and the pro rata share of the extra payments. It is due however the contract ends. Severance pay is something else and only applies in some cases: 33 days’ salary per year of service for an unfair dismissal, 20 for an objective dismissal and 12 when a temporary contract ends. Resigning, or a fair disciplinary dismissal, means a settlement but no severance pay.

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Final settlement and severance pay: what each one is

The word finiquito does not appear as such in the Workers’ Statute (Estatuto de los Trabajadores). Article 49.2 talks about the document settling the amounts owed, which the employer must propose when it notifies the termination. It is a settlement of debts: everything the person has already earned by working and has not yet been paid.

Severance pay is not a debt for work done. It is compensation for losing the job, which is why it depends on how and why the contract ends.

	Final settlement	Severance pay
What it is	What was earned and not paid	Compensation for losing the job
When it is paid	Whenever a contract ends	Only for some types of termination
What it depends on	Salary and dates	Salary, length of service and type of termination
Legal basis	Articles 31, 38 and 49.2 ET	Articles 49.1.c, 53 and 56 ET
Tax	Taxed under IRPF, with social security	Tax free up to the statutory minimum and €180,000

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What the final settlement includes

• Salary for the days worked in the last month that has not been paid yet.
• Holiday earned and not taken. This is the only point at which it can be exchanged for money: while the contract lasts, that is forbidden (article 38.1 ET).
• The pro rata share of the extra payments earned since the last one was paid, unless they are spread across every monthly payslip (article 31 ET).
• Anything else outstanding: overtime, commission, incentives already earned, allowances or expenses to be reimbursed.
• Any deductions that apply: advances, holiday taken in excess or, if the collective agreement provides for it, the days of notice the person did not give when leaving.

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How to calculate the final settlement step by step

1. Salary for the days of the last month

Gross monthly salary ÷ 30 × days worked that month. The month is settled as a 30-day commercial month, so someone who works the whole month is paid the same in February as in August. The monthly salary is the gross annual salary divided by 14 if there are two separate extra payments, or by 12 if they are spread monthly.

2. Holiday not taken

First, the days earned in the year the contract ends: holiday days per year × days worked in the year ÷ 365. With the legal minimum of 30 calendar days, that is 2.5 days per month worked. Take away the days already taken, and pay the result at the daily salary: the gross annual salary, extra payments included, divided by 365.

If the person took more days than they had earned, the difference is negative and it is usually deducted from the settlement.

3. Pro rata share of the extra payments

Amount of the payment × days earned since the last one was paid ÷ 365. When each payment accrues is set by the collective agreement. Most commonly, the Christmas payment accrues from January to December and the summer one from July to June, so the summer payment made in July has already covered the previous twelve months. If the extra payments are spread across the monthly payslip, nothing is outstanding under this heading.

4. Everything else

Overtime, commission or allowances are added at their amount. And in an objective dismissal, if the employer does not give the 15 days’ notice required by article 53.1.c, it must pay the salary for those days.

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A worked final settlement example

Someone on a gross annual salary of €25,200 in 14 payments (€1,800 a month), on a permanent contract since 1 March 2021, last day worked 15 October 2026, 30 calendar days of holiday a year and 12 already taken. From 1 January to 15 October there are 288 days, and the daily salary is 25,200 ÷ 365 = €69.04.

Item	Calculation	Amount
October salary	1,800 ÷ 30 × 15 days	€900.00
Holiday not taken	30 × 288 ÷ 365 = 23.67 days earned; 23.67 − 12 = 11.67 days × €69.04	€805.79
Christmas payment	1,800 × 288 ÷ 365 (January to October)	€1,420.27
Summer payment	1,800 × 107 ÷ 365 (July to October)	€527.67
Settlement total		€3,653.74 gross

That €3,653.74 is paid whether the person resigns, is dismissed or reaches the end of their contract. What changes from one case to another is what comes next.

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Settlement and severance pay calculator 2026

The example above is already loaded. Change the salary, the dates, the holiday or the way the contract ends, and you will see the final settlement, which is always paid, separately from the severance pay, which depends on the case.

The calculator also has its own page, to keep it handy without the article.

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When severance pay applies, and how much

How the contract ends	Severance pay	Cap	Legal basis
Resignation	None	Not applicable	Art. 49.1.d ET
Fair disciplinary dismissal	None	Not applicable	Art. 55.7 ET
Not passing the probation period	None	Not applicable	Art. 14 ET
End of a temporary contract	12 days per year	No cap	Art. 49.1.c ET
Fair objective dismissal	20 days per year	12 months’ pay	Art. 53.1.b ET
Collective dismissal (ERE)	At least 20 days per year	12 months’ pay	Arts. 51 and 53.1.b ET
Substantial change not accepted	20 days per year	9 months’ pay	Art. 41.3 ET
Unfair dismissal	33 days per year	24 months’ pay	Art. 56.1 ET
Termination for the employer’s serious breach	33 days per year	24 months’ pay	Art. 50.2 ET

Two exceptions at the end of a temporary contract: training contracts and the substitution contract do not carry the 12 days.

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How severance pay is calculated

Daily salary × days per year × years of service, up to the applicable cap.

• The daily salary is the gross annual salary, with the extra payments and salary supplements, divided by 365. Items that are not salary, such as allowances or the transport supplement, do not count.
• Years of service run from the seniority date to the last day worked. Periods of less than a year are prorated by months (article 56.1 ET), and the Supreme Court counts a part of a month as a whole month.
• The cap is measured in months’ pay, each one twelfth of the annual salary: 24 for an unfair dismissal (two years’ salary), 12 for an objective one (one year) and 9 for a substantial change. Only contracts older than 2012 have a cap in days, explained next.

Contracts older than 12 February 2012

The 2012 labour reform cut unfair dismissal pay from 45 to 33 days per year, but it kept what had already been earned. For a contract older than that date, the time worked up to 11 February 2012 counts at 45 days per year and the time after it at 33. The total cannot exceed 720 days, unless the older period alone already does: then that period is paid, up to 42 months’ pay (eleventh transitional provision of the Statute). The calculator applies this rule by itself when the start date is earlier.

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A worked severance pay example

The same person as before: from 1 March 2021 to 15 October 2026 there are 5 years, 7 months and 15 days. The part of October counts as a whole month, so the service counted is 5 years and 8 months, or 5.67 years.

Type of dismissal	Days of salary	Severance pay	Settlement + severance
Unfair	33 × 5.67 = 187 days	€12,910.68	€16,564.42
Fair objective	20 × 5.67 = 113.33 days	€7,824.66	€11,478.40
Fair disciplinary	0	€0.00	€3,653.74

The gap between the first row and the last is exactly the confusion this article started with: the settlement is the same in all three cases, while the severance pay ranges from zero to almost €13,000.

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Signing the settlement: «not in agreement», a representative and deadlines

• The employer must propose the settlement together with the termination notice or the advance notice (article 49.2 ET).
• The person can ask for a workers’ legal representative to be present when signing, and the receipt must state whether one was there or the option was not used.
• Signing «not in agreement» (no conforme) lets the person collect what is offered and claim the difference later. Signing does not mean giving anything up, and the courts do not treat a settlement as a waiver when it does not set out clearly what is being settled.
• Deadlines to claim: 20 working days to challenge a dismissal (article 59.3 ET) and one year to claim amounts owed (article 59.1 ET).
• When it is paid: the law sets no general deadline. It is usually paid with the last payslip or on the last day, and many collective agreements regulate it.
• Deregistration from social security is filed within three calendar days of the termination.

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What is taxed and what is not

The final settlement is salary: it is taxed under IRPF and carries social security contributions, holiday not taken included.

Severance pay is exempt from IRPF up to the compulsory amount set by the Statute, with a limit of €180,000 (article 7.e of the IRPF Act), and carries no contributions. Anything agreed above the statutory minimum is taxed. For an unfair dismissal, the exemption requires it to be recognised at the conciliation hearing or in a court ruling.

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Common mistakes when calculating the settlement

1. Mixing up settlement and severance pay. Someone who resigns gets no severance pay, but does get their whole settlement.

2. Forgetting the pro rata extra payments. With 14 payments it is usually the largest item in the settlement.

3. Working out holiday over the contract rather than the year. What counts is the holiday earned in the year the contract ends, minus what was taken that same year.

4. Using only the base salary for the daily salary. Extra payments and salary supplements count too.

5. Rounding service down. Fifteen days of a month count as the whole month.

6. Not knowing how many holiday days were really taken. It is the figure that causes the most arguments, and the one fewest people have to hand on the last day.

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The figure that is almost always missing: the holiday balance

Of everything above, the salary and the dates are in the contract. What is rarely to hand is how many holiday days each person has earned and taken this year, including half days, requests approved late and days nobody deducted. And it is exactly the item of the settlement that gets disputed most.

In Quantummycos every person has their balance up to date: days earned, approved, awaiting approval and left. On the Enterprise plan, every departure also gets its own offboarding checklist, person by person, with the steps your company sets: the settlement, social security deregistration within three days, the employment certificate, returning equipment or removing access. You can open the app and try it with your team. Free plan for up to 2 users, no card needed.

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Keep reading

• Employee onboarding and offboarding in Spain 2026: checklist and deadlines, everything to do when someone leaves, in order.
• Holiday entitlement in Spain 2026, where the balance paid in the settlement comes from.
• What an employee really costs a company in Spain in 2026, from gross salary to total cost.
• Paid leave in Spain 2026: days by situation, the absences that are not holiday.

Sources

• Workers’ Statute, consolidated text (BOE): articles 14, 31, 38, 41, 49, 50, 51, 53, 55, 56 and 59, and the eleventh transitional provision.
• Act 35/2006 on Personal Income Tax (BOE): article 7.e, on the exemption for dismissal compensation.

This article is for information only and is not legal advice. Your collective agreement may improve these minimums and set a different accrual for the extra payments: always check the current consolidated text in the BOE and speak to your employment adviser. Last reviewed: October 2026.