Spanish firms must cover social security on unused vacation after contract ends

When an employment contract terminates before a worker has taken all accrued vacation days, Spanish law requires the employer to pay the unused days as a cash compensation in the severance payment. In addition, the employer must continue to make social‑security contributions for those pending vacation days, even if they extend beyond the month of termination. This obligation also affects the employee’s eligibility for unemployment benefits, as the period of paid but untaken vacation is counted before the unemployment insurance clock starts. Ilex Tax & Legal advises companies to carefully calculate the final settlement, issue the employer’s certificate, and notify Social Security to avoid administrative errors that could impact both the firm and the worker.

Proper planning and management of pending vacation can prevent later disputes and ensure compliance with labour and social‑security regulations.