Reductions for Permanent Hiring: Save on Social Security Contributions

It depends on the group. For someone long-term unemployed and over 45, the reduction is €128/month for 3 years: a total saving of €4,608. For a victim of gender violence, €128/month for 4 years comes to €6,144. The employer contribution for common contingencies is 23.60% of gross pay (Order PJC/178/2025), so the reduction can represent between 6% and 15% of the total labour cost over the period covered. When a training contract is converted into a permanent one, the reduction is €128/month (men) or €147/month (women) for 36 months.

The company must be up to date with its obligations to the AEAT and Spanish Social Security, must not have been barred from receiving public incentives, must not have made unfair dismissals of subsidised contracts in the previous 12 months, must have a registered equality plan if it has 50 or more employees, and must undertake to keep the employee registered with Social Security for at least 3 years (art. 9 of RDL 1/2023). Failing to keep the job for that period means repaying every amount received, plus surcharges and late-payment interest.

No. The general rule in RDL 1/2023 is that the reductions it sets out cannot be combined: only one reduction can be applied per contract (art. 12). Where other public grants for the same purpose also apply, the total cannot exceed 60% of the annual salary cost of the subsidised contract. The main exception is that the reduction for the dual training contract can be combined with the mentoring reduction. Hiring reductions ARE, however, compatible with the R&D&I tax deductions under art. 35 LIS.

The most significant change was replacing percentage-based reductions (which could reach 100% of the contribution) with fixed monthly amounts in euros. That makes the system more predictable, but it removes the 100% reductions that existed before. RDL 1/2023 also brought into one text what had been scattered across dozens of laws (partly repealing Law 43/2006) and added an express obligation to keep the job for 3 years as a general condition for every reduction.

The length varies by group: 36 months (3 years) for the long-term unemployed and for converted contracts; 48 months (4 years) for victims of gender violence, victims of terrorism, people at risk of social exclusion and people with borderline intellectual capacity; and 24 months where an employee is taken back after permanent incapacity. The clock starts on the date the permanent contract or the conversion takes effect. For part-time contracts (at least 50% of full time), the reduction is cut in proportion.