Why Tenerife

Labour Market

General observations

In Spain, labour relations are regulated by the Workers’ Regulations, approved by Royal Legislative Decree 2/2015, of 23 October. These regulations have been adapted and modernised over the years, with the aim of making the labour market more dynamic in order to favour employment and investment.

Minimum age

The minimum age for hiring is 16. Children under the age of 18 are protected by a number of special rules which, for example, regulate that they may not work overtime or work at night.

Wages

The minimum interprofessional wage is adjusted annually. In 2019, it amounts to 900 euros per month or 12,600 euros per year, in twelve monthly instalments and two extra payments. In 2019, it is expected to rise to 900 euros per month, 12,600 euros per year. In any case, it is the collective agreements that determine the minimum wages for each professional group, always equal to or higher than the previous one.

Working day

The maximum working day is 40 hours per week. As with wages, collective agreements or individual contracts of employment can modify it, but never exceed it.

Holidays

Workers are entitled to a minimum of 30 calendar days of holiday per year. In addition, they may enjoy official holidays, which may not exceed 14 days a year.

Social Security

As a general rule, all employers, their workers, self-employed workers, members of production cooperatives, among others, must register and are obliged to contribute to the Spanish Social Security System. Employers must pay their own contributions (29.9% under the general rule, 31.1% for temporary contracts) and deduct and pay their workers’ contributions (6.35% or 6.4%, respectively) as Social Security contributions.

Trial periods

Companies can agree on a trial period to test the skills of a new worker. During this period, contracts can be terminated freely.

Labour costs

Tenerife offers an attractive business environment, with highly competitive labour and operating costs in a low-risk area within the European Union.

Labour costs in Spain, both in annual averages and in gross terms per hour, are 21% lower than the European Union average (EU-28), reaching a cost differential of 60% with respect to the Nordic countries.

Within Spain, average labour costs in the Canary Islands and Tenerife are among the lowest, offering significant savings compared to the main capitals.

Average total labour costs per employee in Spain and Tenerife, €

Fuente: INE, Segundo trimestre de 2018

National Total Tenerife Difference
    Industry 3.135 2.453 21,8%
     Construction 2.721 2.324 14,6%
    Services 2.497 2.201 11,8%

Source: National Statistics Institute, Second quarter of 2018.

To find out more about the types of contract included in the legislation, you can consult our Guide for Doing Business in Tenerife