Objective dismissal severance in Spain is not tied to worker misconduct: the employer claims a reason, usually economic, technical, organisational or production-related. That is why the law gives you severance, lower than for an unfair dismissal but payable without having to win a court case.
The short answer
20 days’ salary per year worked, prorated by month for periods shorter than a year, up to 12 monthly salaries. This is Article 53 of the Estatuto de los Trabajadores (Workers Statute).
What grounds allow objective dismissal?
- Economic, technical, organisational or production-related grounds at the company.
- Inability to do the job arising after the worker started it.
- Failure to adapt to reasonable technical changes to the role.
How to calculate it
- Daily salary: annual gross salary (including extra payments) divided by 365.
- Seniority: full years and, for shorter periods, months.
- Formula: daily salary × 20 days × years of service.
- Cap: the result cannot exceed 12 monthly salaries.
Example
Pedro has worked for the company for five years and four months and earns €27,000 gross per year.
- Daily salary: €27,000 ÷ 365 = €73.97.
- Severance days: 20 × 5 = 100, plus 20 × 4/12 = 6.67 days → 106.67 days.
- Approximate severance: 106.67 × €73.97 ≈ €7,890.41.
- Cap of 12 monthly salaries (€27,000): it does not apply.
If the same dismissal is found unfair (despido improcedente), the rate becomes 33 days per year: 33 × (5 + 4/12) = 176 days; the approximate amount is €13,019.18. The approximate difference is €5,128.77, which is why checking the letter matters. For this calculation, see our unfair dismissal severance guide.
The amounts use the unrounded daily salary; multiplying the displayed intermediate figures may produce a difference of a few cents.
When it is paid
The employer must make the severance available when handing you the dismissal letter. There is an exception: if the dismissal is for economic reasons and the employer shows that it cannot pay at that point, it may delay payment, but must state this in the letter. You keep the right to claim the money.
Notice: 15 days and six hours a week
- The employer must give 15 days’ notice. Failing to do so does not invalidate the dismissal, but it must pay the wages for the missing notice days.
- During the notice period, you are entitled to six paid hours off each week to look for another job.
Objective, disciplinary and unfair dismissal
| Type | Reason | Severance |
|---|---|---|
| Justified disciplinary dismissal | Serious misconduct by the worker | None (but final settlement is due) |
| Justified objective dismissal | A company reason (economic, technical…) | 20 days per year, capped at 12 monthly salaries |
| Unfair dismissal (of either type) | Ground not proved or procedural defect | 33 days per year, capped at 24 monthly salaries |
If a formal requirement is missing
If the letter does not state the reason, or severance is not made available, the dismissal may be declared unfair. The decision is null if it is motivated by prohibited discrimination or breaches fundamental rights; Article 53.4 also protects situations such as pregnancy, birth-related leave, reduced working hours and childcare leave. In those specially protected cases, the employer may still prove an unrelated objective reason that specifically justifies terminating that worker’s contract. You can challenge it within 20 working days; see the deadline for challenging a dismissal.
Is severance taxed?
The legally required severance is exempt from Spanish income tax, up to €180,000. If the employer offers more than the legal amount, the difference may be taxable. Check how the payment is itemised.
Objective or collective dismissal?
When an employer dismisses many workers at once, or crosses certain thresholds, it is not an individual objective dismissal but a collective dismissal (ERE), with a different procedure. See the distinction in ERTE and ERE in Spain.
And then, unemployment benefit
After an objective dismissal, you are in a legal situation of unemployment, so you can claim paro (contributory unemployment benefit) if you have paid enough contributions. You have 15 working days to apply, and our benefit duration guide shows how long it could last.