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 isn't salary

The wage concept is covered in Article 26 of the Royal Legislative Decree 2/2015, of 23 October, approving the revised text of the Workers' Statute Law, that defines it thus:

Salary shall be considered to be all economic remuneration of workers, in cash or in kind, for the professional provision of labour services on behalf of a third party, whether they remunerate actual work, whatever the form of remuneration, or periods of rest that are counted as work.

Now, what does the regulation mean when it talks about economic perceptions? Because not all income received by the employee from the employer can be considered as wages.

In this regard, the legal text exception 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 accommodation and maintenance.

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 constituted by the following components:

The basic salary: It is the remuneration agreed upon by the worker and the company.
Wage supplements: These are amounts that make up the payroll for different reasons, such as length of service, extraordinary payments, profit-sharing, paid holidays, hazardous duty allowances or shifts, productivity bonuses, and so on.

Wage rates

Given the regulatory flexibility regarding remuneration, when talking about wage rates, Companies and employees have a wide range of options available to them:

Based 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.
In accordance with the application of taxes or withholdings:
- Gross salary: It refers to the sum of all payroll items.
- Net salary: the amount the employee will receive once Social Security contributions and deductions have been taken away.
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: if the final amount varies depending on the employee's productivity.
- Mixed salary: in the case of a fixed fee to which other variable amounts are added.
Based on the nature of remuneration
- Monetary wage: When the worker receives money in compensation for their work.
- Wages in kind: if the employee receives other non-monetary rewards for their activity, such as a company car, accommodation expenses, canteen, dental insurance or company shares. However, this type of Flexible remuneration can never exceed 30% of the total salary and must be included and accounted for –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 – they won't be losing income, but the company will strengthen its ties with the employee, who in turn will strive to improve business results to obtain greater benefits from their shareholding.