ERE severance in Spain: how it's calculated and how much you can get

What is an ERE and why does it matter

An ERE (Expediente de Regulación de Empleo) is the Spanish legal process companies must follow when making collective redundancies. If your company is restructuring, cutting costs or closing a division, an ERE is likely the mechanism being used.

Understanding how severance is calculated in an ERE can make a significant difference to what you walk away with.

How severance is calculated

The formula is straightforward: daily wage multiplied by the number of days per year worked, multiplied by your total years of service.

Your daily wage is your gross annual salary divided by 365. If you earn 40,000 € gross per year, your daily wage is roughly 109.59 €.

The number of days per year depends on the type of dismissal. In an ERE, the statutory minimum is 20 days per year worked, capped at 12 monthly payments.

So for 5 years of service at 40,000 € gross: 109.59 × 20 × 5 = 10,959 € gross.

All figures are gross. Net will depend on your tax bracket and personal circumstances.

20 days is the floor, not the ceiling

This is the most important thing to understand. The law sets a minimum, not a maximum.

In practice, particularly at profitable companies or in large restructuring processes, exit agreements regularly go above the statutory minimum. Some workers negotiate 30, 40 or even 50 or more days per year worked.

Companies often have reasons to offer more: closing agreements quickly, avoiding conflict, protecting their reputation or encouraging voluntary departures.

What else can you negotiate

Beyond the indemnización, a well-negotiated exit can include:

• Finiquito: the settlement of pending items at contract end, including accrued holiday not taken, pro-rated extra payments (pagas extras) and any days of the current month worked but not yet paid.
• Bonus or variable pay pending at the time of departure.
• Accelerated RSU vesting if you hold company stock.
• Extended private health insurance coverage.
• Outplacement or retraining support.

The consultation period

In most ERE processes there is a formal consultation period (periodo de consultas) during which terms are negotiated, either individually or collectively through a works council.

This is your window. The first number on the table is rarely the final one.

Tax treatment of ERE severance

Statutory severance (indemnización por despido) is generally exempt from income tax (IRPF) up to the legal minimum. Any amount negotiated above the statutory minimum is typically subject to tax, though specific rules apply depending on circumstances.

Verify your situation with a tax adviser or employment lawyer before signing anything.

Use the calculator

The golayoff calculator lets you model your indemnización, finiquito and any additional negotiated items in seconds. Free, anonymous, no signup required.