Contract end date
📊 Settlement details breakdown
The final settlement (finiquito) is the official statement and payout you receive when your employment contract in Spain terminates. This applies under all circumstances, including objective dismissal, unfair dismissal, the end of a temporary contract, or your own voluntary resignation.
📝 What is included in your finiquito?
The final settlement consists of several distinct parts that are owed to you:
- Unpaid salary for the current month: Payment for any days worked during the month of termination that have not yet been paid.
- Unused vacation days: If you have not taken all of your accrued annual leaves (typically 30 calendar days per year), the employer must pay you for these days. These payments are subject to standard taxes and social security contributions.
- Accrued extra payments: If your contract includes 14 payments (where extra paychecks are given in June and December rather than prorated into your 12 monthly paychecks), you are owed a prorated portion of the next extra payment.
- Overtime wages: Any hours worked beyond your regular schedule that have not yet been compensated.
📐 Worked settlement example
Assume a voluntary resignation effective June 15 with an annual gross salary of €28,000.00 (regulatory daily salary of €80.00, extra payments not prorated) and 10 days of unused vacation.
- Vacation payout (10 days × €80.00): €800.00
- Unpaid June wages (15 days × €80.00): €1,200.00
- Accrued summer extra pay (nearly complete, 5.5 months): €1,833.33
✍️ Should you sign the finiquito document?
Signing a final settlement usually clears the employer of further liability. If you disagree with the calculations or have not received the funds, follow these steps:
- Write “no conforme” (not agreed) next to your signature, along with the actual date of signing.
- If you have not yet received the money via transfer or cash, write “cantidades no percibidas” (amounts not received).
- You have the right to request a worker representative (union delegate) to witness the signing.
🆚 Differences: Finiquito vs. Severance Pay
It is common to confuse these two terms, but they are separate legal concepts:
- Finiquito is mandatory in all contract terminations to settle ordinary salary and vacation balances.
- Severance pay (indemnización) is only paid if you are dismissed (excluding fair disciplinary dismissals) to compensate for the loss of your job.
❓ Frequently Asked Questions (FAQ)
The employer must provide the settlement proposal and pay the outstanding amount on your last working day. Any delays can justify a claim for interest.
Yes. Unlike severance payments, which are tax-exempt up to a limit, all standard components of your finiquito (vacations, final month wages, extra payments) are subject to standard income tax (IRPF) withholding and social security contributions.
You retain your full right to receive your final settlement (including unused vacation and accrued extra payments). However, you will not receive any severance pay and will not be eligible for unemployment benefits (paro) immediately.
Under a semi-annual accrual, the summer payment accumulates from January 1 to June 30, and the Christmas payment from July 1 to December 31. Under an annual accrual, each payment accumulates over 365 days leading up to the payout date.
If you signed without writing "no conforme", it is legally harder to dispute. However, if there are clear mathematical errors or if you can prove coercion, you have one year to file a claim in the labor courts.