What are the wage rates available in Spain?

Can an employee be paid in shares, and can his or her salary consist only of shares, and are travel allowances considered part of his or her salary? Human Resources managers in companies should be very clear about the concepts of workers' pay and wage rates available in legislation.

The current regulations are rather lax in terms of how employees are paid, opening up the possibility for the professional and the organisation to agree on the terms of remuneration in each case, provided that they comply with minimum conditions that guarantee the rights of the worker.

It is therefore useful to look more closely at the types of wages in order to explore the option that best meets the interests of both employee and employer. For example, why not include in the payroll a childcare service to help children with special needs. reconciling work and family life if both parties agree, instead of paying a higher financial amount at the end of the month?

What is and what is not a wage

The wage concept is set out in Article 26 of the Royal Legislative Decree 2/2015, of 23 October, approving the revised text of the Workers' Statute Law, which defines it as follows:

Wages and salaries are defined as the total financial payments received by workers, in cash or in kind, for the professional provision of employment services as an employee, whether in return for actual work, whatever the form of remuneration, or for rest periods that count as work.

But what does the regulation mean when it talks about economic benefits? The fact is that not all income received by the employee from the employer can be considered as wages.

In this regard, the legal text except the following elements:

• The indemnities or allowances for expenses incurred as a result of their employment or relocation.
• The benefits and indemnities Social Security.
• The distance and transport bonuses.
• Compensation for transfers.
• The diets for board and lodging.

For example, on Ticket Restaurant would never be considered as part of the salary, but is conceived as a social benefit that occurs within the working day.

Thus, the salary is made up of the following components:

• The basic salary: is the remuneration fixed by the employee and the undertaking
• Wage supplements: these are amounts added to the payroll for different reasons such as seniority, special payments, participations, paid holidays, hazard or shift bonuses, productivity bonuses...

Wage rates

Given the regulatory flexibility on labour remuneration, when speaking about wage rates, a wide range of possibilities are available to companies and employees:

• Depending on the periodicity with which the payroll is paid:
  • Salary or wage monthly.
  • Salary fortnightly.
  • Wage or salary daily.
• According to the components that make it up:
  • Basic salary: the amount agreed in respect of the activity carried out.
  • Full salary: incorporates all salary supplements.
• Pursuant to the application of taxes or withholdings:
  • Gross salary: refers to the sum of all payroll items.
  • Net salary: the amount that the employee will receive after deduction of social security deductions and withholdings.
• Under the charging criteria:
  • Fixed salary: where the amount stipulated is equal in each pay period and without regard to efficiency or achievement, but subject to time-on-post criteria.
  • Variable salary: whether the final amount varies according to the employee's productivity.
  • Mixed salary: in the case of a fixed fee to which other variable amounts are added.
• Depending on the nature of remuneration:
  • Monetary wage: when the worker receives money in compensation for his or her work.
  • Wages in kind: if the employee receives other non-financial rewards for his or her activity, such as a company car, living expenses, canteen, dental insurance or shares in the company. However, this type of flexible compensation can never exceed 30% of the total salary and must be recorded and computed - for tax purposes - as financial remuneration.

After seeing all these possibilities, we need to consider some creativity in setting wage rates. Thus, if we offer shares to the employee - instead of money - he or she will not be losing income, but the company will strengthen ties with the employee, who in turn will strive to improve business performance in order to get more benefits from the shares.