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Unfair dismissal in Spain: what you actually get and how it is calculated

Improcedente does not mean void or objective: it means the dismissal lacked valid cause, and that classification fixes exactly what you are paid.

3 min readReviewed By Thorben Rasmus IdelReviewed by Nahar Geva

TL;DR

Unfair dismissal in Spain pays 33 days of salary per year of service (45 for time before 12/02/2012), prorated by months, capped at 720 days, or the old tranche up to 1,260. The finiquito is always paid on top, and the legal severance is exempt from IRPF within limits.

What "improcedente" means

A dismissal is improcedente (unfair) when the cause alleged is not proven (neither the serious breach behind a disciplinary dismissal nor the economic, technical, organisational or production grounds of an objective one) or when the required form fails. The social court judge declares it, or the company itself can acknowledge it in conciliation.

It is not the same as a void dismissal (one violating fundamental rights, whose consequence is mandatory reinstatement) nor a fair objective dismissal (20 days per year). The classification decides the money, which is why it is the first thing disputed.

The severance: 33 days per year, and 45 for the old tranche

Once unfairness is declared, the employer chooses within five days between reinstating the worker (paying the accrued back salaries) or paying severance. Article 56's severance is:

  • 33 days of salary per year of service since 12 February 2012, prorating shorter periods by months (every started month counts in full), capped at 720 days (24 monthly salaries).
  • For contracts signed before 12/02/2012, the time up to that date counts at 45 days per year (transitional provision 11). If that tranche alone already exceeds 720 days, it becomes the maximum, never above 1,260 days.

The salary used is the regulatory daily salary: the gross annual, extra payments included, divided by 365.

Example. A €25,200 annual salary (€1,800 across 14 payments) and 5 years and one month of service, all post-2012: 33 × 61 ÷ 12 = 167.75 days × €69.04 = €11,581.64. You can reproduce it with your own numbers in the dismissal severance calculator.

What you get on top of the severance

Severance is not the only amount. Every termination also settles the finiquito: the days worked in the final month, untaken vacation and the accrued share of the extra payments. It follows its own rules (the finiquito calculator applies them) and deserves a line-by-line check before signing.

And a dismissal, unfair or not, opens the door to unemployment benefit if you have contributed enough: claim it at SEPE within 15 working days of the termination.

Tax: the exemption worth knowing

The legal severance for unfair dismissal is exempt from IRPF up to €180,000 (article 7.e of the IRPF law). Two important nuances: anything agreed above the legal severance is taxed, and the finiquito is always taxed as salary, another reason not to blur the two concepts in a negotiation.

Deadlines that forgive nothing

  • 20 working days from the dismissal to file the conciliation request, the expiry period of the dismissal claim.
  • 5 days for the employer, after the ruling, to choose between reinstatement and severance.
  • 15 working days to claim unemployment benefit after the termination.

This information is educational and is not employment or tax advice. Facing a dismissal, consult a labour law professional promptly: the 20-day clock starts on day one.

Common mistakes

  • Confusing unfair with objective dismissal

    Objective dismissal (economic or organisational causes) pays 20 days per year capped at 12 monthly salaries. Unfair pays 33, and 45 for pre-2012 service.

  • Forgetting the finiquito is paid separately

    Days worked, pending vacation and accrued extra payments are ALWAYS settled, on top of severance.

  • Counting full years instead of started months

    Service is prorated by months and every started month counts in full: 5 years and 1 day is 61 months, not 60.

Frequently asked questions

How much does unfair dismissal pay?
33 days of salary per year of service (prorated by months) for time since 12/02/2012, capped at 24 monthly salaries; earlier time on pre-existing contracts counts at 45 days per year under transitional provision 11.
Who declares a dismissal unfair?
The social court judge, or the company itself by acknowledging it (in conciliation, for instance). Once declared, the employer has five days to choose between reinstatement with back salaries and paying the severance.
Does unfair dismissal give the right to unemployment benefit?
Yes: any dismissal (fair, unfair or objective) allows you to claim unemployment benefit if you have contributed enough. What generally does not is voluntary resignation.
Is the severance taxed under IRPF?
The legal severance for unfair dismissal is exempt up to €180,000 (art. 7.e of the IRPF law). The finiquito, by contrast, is always taxed as salary; they are different concepts.
What are salarios de tramitación?
The salaries accrued between the dismissal and the ruling's notification, paid when the employer opts for reinstatement (or when the dismissed worker is a workers' representative and chooses it).
Run your numbers in the dismissal severance calculator.

Related reading & calculators

Sources

  1. 1.Workers' Statute (RDL 2/2015), art. 56 and transitional provision 11 · Boletín Oficial del Estado
  2. 2.Severance calculation for contract termination · General Council of the Judiciary
  3. 3.IRPF Law 35/2006, art. 7.e · Boletín Oficial del Estado

Author / Reviewed by

Author

Thorben Rasmus Idel

Co-founder & writer

Co-founder of Calculadora Capital and the writer behind the methodology on every calculator and article. An entrepreneur and active investor, Thorben founded Idel Versandhandel GmbH, an international trading company operating across 16 countries, and invests across stocks, ETFs and cryptocurrency. He writes the methodology and verifies the math behind each page, drawing on hands-on business and investing experience to keep the tools and explanations grounded in how money, markets and taxes actually work for everyday people in Spain.

Reviewed by

Nahar Geva

Co-founder & reviewer

Co-founder of Calculadora Capital and the independent reviewer behind every calculator and article. An entrepreneur and active investor, Nahar brings a data- and product-driven mindset together with hands-on experience in the markets, investing across stocks and ETFs as well as cryptocurrency and other digital assets, alongside broader personal finance and real estate. On each page Nahar reviews the methodology and double-checks the math and figures, pressure-testing how the tools and explanations hold up against the way money, markets and taxes actually work for everyday investors.

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