Objective dismissal and ERE in Spain: the 20-day rule in 2026
An objective dismissal (despido objetivo) and each dismissal within a collective redundancy (ERE) carry at least 20 days of salary per year of service, prorated by month and capped at 12 months’ pay, roughly one year’s salary (article 53.1.b of the Workers’ Statute, which article 51.4 applies to collective redundancies). The employer must give written reasons, make the money available with the letter and allow 15 days’ notice. On €36,000 a year with a start date of 7 September 2020, an objective dismissal on 3 October 2026 pays €12,000, free of income tax. Redundancy plans negotiated with worker representatives often improve the days and the cap; the law only sets the floor. Try your own figures, including an agreed number of days, in the quick calculator.
Objective dismissal or ERE: what you get
Gross compensation
€15,781
| Tax-free | €15,781 |
| Taxable | €0 |
| Legal minimum (20 days, 12-month cap) | €15,781 |
Above 20 days, an agreed cap of 24 months’ pay is assumed.
The one-year cap and what it means for long service
Twelve months’ pay is 365 days of salary. At 20 days a year, the cap bites after 18.25 years. A logistics coordinator who joined in March 2007 on €41,000 would reach 391.67 days without the cap, but is paid 365: €41,000. The longer the service, the bigger the gap with an unfair dismissal, and the stronger the incentive to challenge the grounds.
For the shorter career in the opening example, the difference between objective and unfair dismissal is €7,800. That is the sum usually discussed at the conciliation hearing when an employee disputes the economic reasons given, for instance when the letter does not show losses or a fall in revenue over three consecutive quarters.
Notice, job-hunting time and pay in lieu
The 15-day notice period runs from the day you receive the letter. During it you keep your salary and are entitled to six hours of paid leave a week to look for work. Employers who want you gone immediately pay those days instead: in the first example, €1,479 added to the final settlement. Unlike the compensation, pay in lieu of notice is taxed and subject to social security.
What gets negotiated in an ERE
Collective redundancies in Spain go through a consultation period with worker representatives, and at least thirty days must pass between notifying the labour authority and the dismissals taking effect. Large employers rarely stop at the minimum: 30 to 45 days a year with a 24-month cap, lump sums per person and early-retirement arrangements for staff over 55 are common outcomes. A software lead hired in June 2012 on €58,000, leaving under a plan agreed at 40 days with a 24-month cap, receives €91,105. Of that, €75,162 is tax-free, the amount an unfair dismissal would have paid, and €15,943 is taxable, cut to €11,160 by the 30% allowance.
Objective dismissal or ERE: the reason changes the tax treatment
For objective dismissals the tax exemption depends on the ground. Economic, technical, organisational or production reasons (article 52.c) bring the same generous treatment as an ERE: exempt up to the unfair-dismissal figure. Other grounds, such as incapacity, are exempt only up to the statutory 20 days. This matters when an employer pays more than the minimum to avoid litigation.
Next steps: benefit and, for some, early retirement
Objective and collective dismissals give access to unemployment benefit; apply within fifteen working days. If you are within four years of your ordinary retirement age and have at least 33 years of contributions, a dismissal on these grounds can also open involuntary early retirement, as long as you have received or claimed the compensation; see the early retirement guide. For your exact figures, use the dismissal compensation calculator with your dates and any agreed days.
Checking the letter and the money
An objective dismissal letter must explain the ground in concrete terms: for economic reasons, the figures showing current or expected losses or falling revenue; for incapacity, the facts that show it. It must come with the compensation, by transfer or cheque, unless the employer states in writing that it cannot pay for economic reasons. Missing either element is a frequent reason for courts to declare the dismissal unfair. Check that the daily salary includes both extra payments and fixed allowances, and that your seniority date matches your contribution record. If you work reduced hours to care for a child or relative, the compensation must be calculated on the full-time salary (additional provision 19 of the Workers’ Statute).
Frequently asked questions
What counts as an objective dismissal in Spain?
Article 52 of the Workers’ Statute allows it for incapacity that arose after hiring, failure to adapt to technical changes in the job, economic, technical, organisational or production reasons affecting fewer people than a collective redundancy, and funding shortfalls in certain public programmes. Absences from work stopped being a ground in 2020.
When must the employer pay?
On the day it hands you the letter: 20 days per year, capped at 12 months’ pay, must be made available with the written notice. Only when it relies on economic grounds and states in the letter that it cannot pay may it postpone payment, which you can then demand once the dismissal takes effect.
How is an ERE different from an individual dismissal?
An ERE (expediente de regulación de empleo) is a collective redundancy: within ninety days it affects at least ten workers in companies under one hundred, ten per cent in companies of one to three hundred, or thirty in larger ones. It requires a consultation period with worker representatives, which is where better terms are usually negotiated.
Is ERE compensation above the legal minimum taxed?
Only the part above what an unfair dismissal would have paid, or above €180,000. In collective redundancies and objective dismissals for economic reasons, the tax exemption reaches the unfair-dismissal amount even though the legal minimum is only 20 days a year, so moderate improvements stay tax-free.
Can I take my employer to court after accepting the money?
Yes. Receiving the compensation does not mean accepting the dismissal. File for conciliation within twenty working days. If the court rules the dismissal unfair, the employer must top up to 33 days a year, 45 for service before 2012, or take you back.
Can an objective dismissal be declared void?
Yes. It is void, not just unfair, if it discriminates or breaches fundamental rights, or if it targets a pregnant employee, someone on or recently back from birth or adoption leave, or someone using certain family-related rights, unless the employer proves an unrelated reason. A void dismissal means reinstatement with back pay rather than compensation.
Related calculators and guides
Official sources
- Workers’ Statute (Estatuto de los Trabajadores), arts. 38, 49, 51, 53, 56 and transitional provision 11
- Personal Income Tax Act 35/2006, art. 7.e (exemption) and art. 18.2 (30% reduction)
- Spanish Tax Agency, 2025 income tax manual: severance payments
Figures checked against the consolidated texts of the Boletín Oficial del Estado on 3 October 2026. An indicative estimate that does not replace a decision of the administration or professional advice.