How to Calculate a Domestic Worker's Final Settlement

What the final settlement is and what it covers

The final settlement is the document that records the sums an employer must pay a worker when the employment relationship ends — whether through dismissal (with or without severance) or the worker's voluntary resignation. It must be paid on the last working day and reflects everything earned but not yet received.

Whatever the reason for the termination, a domestic worker's final settlement is made up of:

• Salary for the days actually worked in the final month that have not yet been paid.
• The pro-rata share of the extra salary payments, unless these are already spread across the 12 monthly payslips.
• Holiday earned but not taken (domestic workers are entitled to 30 calendar days a year).
• Overtime worked but not paid, plus any other allowances or amounts agreed in the contract.
• Severance pay, only where the termination is a dismissal that entitles the worker to it.

The final settlement and severance pay are not the same thing

The final settlement is always paid when the contract ends. Severance pay, by contrast, only applies to certain dismissals and is calculated and paid separately. Since Royal Decree-Law 16/2022 (Real Decreto-ley 16/2022) came into force on 9 September 2022, employers can no longer terminate at will: the dismissal must be given in writing and with a stated cause, and it gives the worker access to unemployment benefit (prestación por desempleo). For more detail, see our guide on how to manage the dismissal of a domestic worker.

With a voluntary resignation there is no severance pay, but the worker is still entitled to their final settlement (salary owed, extra payments and untaken holiday).

How to calculate a domestic worker's final settlement step by step

1. Salary for the days worked (salary owed)

First work out the daily wage by dividing the gross monthly payslip by 30, then multiply it by the days of the final month still owed:

• Daily wage = gross monthly salary / 30
• Salary owed = daily wage × number of days worked still owed

2. The pro-rata share of the extra salary payments

Domestic workers receive two extra salary payments a year (one in summer and one at Christmas), each equal to one month's salary. Each payment accrues over its own half-year, so it must be pro-rated across the days of that half-year, not across the 360 days of the year (this is the most common calculation error: dividing a payment by 360 undervalues it by almost half). If the extra payments are already spread across the 12 monthly payslips, they do not form part of the final settlement because they have already been paid month by month.

The correct formula is: payment amount / days in the accrual half-year × days elapsed since the start of that half-year. You will find more detail in our article on the extra salary payments for domestic workers.

3. Holiday earned but not taken

A worker accrues 30 calendar days of holiday a year (2.5 days for each month worked). The final settlement pays out the days earned that have not been taken:

• Days earned = 30 × days worked / 365
• Days to pay = days earned − holiday days already taken
• Amount = days to pay × daily wage

You can read more in our pieces on domestic workers' holiday entitlement and on whether holiday can be paid in lieu.

4. Other items: overtime and notice period

The final settlement also includes any overtime worked but not paid, along with any amount agreed in the contract. In addition, termination requires notice: 7 days if the relationship lasted less than a year, and 20 days if it lasted more than a year. If the employer does not honour that notice period, they must compensate the worker with the salary for the notice days not given.

5. Deductions: Social Security and income tax

The final settlement is calculated gross. The worker's own Social Security (Seguridad Social) contribution is deducted from the total. Personal income tax (IRPF), by contrast, is not withheld when a family resident in Spain hires for its own home: the duty to withhold falls on companies and on those who pay in the course of a business activity (Article 99.2 of the Income Tax Act, LIRPF; Article 76.1 of the IRPF Regulation), so the worker is paid without withholding and declares her income herself if she has to. A non-resident employer is a different case: Article 76.1.d does include non-residents who pay employment income in Spain. We explain this in our article on whether income tax must be deducted from a domestic worker's pay.

A worked example of a final settlement calculation (2026)

Imagine a full-time domestic worker (40 hours a week) earning the 2026 Spanish minimum wage (SMI): 1,221 €/month across 14 payments. Their contract began on 1 January and ends on 3 September; their last salary was paid on 31 August, leaving 3 days of September still owed. They have taken no holiday, and the most recent extra payment (the summer one) was paid on 1 July.

Daily wage = 1,221 / 30 = 40.70 €.

Salary owed: 3 days still owed × 40.70 = 122.10 €.

Pro-rata extra payment: the Christmas payment accrues over the second half-year (from 1 July to 31 December, 184 days). From 1 July to 3 September, 65 days have elapsed, so: 1,221 × 65 / 184 = 431.33 €.

Untaken holiday: from 1 January to 3 September they have worked 246 days (8 months and 3 days). Days earned = 30 × 246 / 365 = 20.22 days. As none have been taken: 20.22 × 40.70 = 822.95 €.

Total final settlement (gross) = 122.10 + 431.33 + 822.95 = 1,376.38 €. To this figure you would add, where applicable, any unpaid overtime and any dismissal severance pay, and subtract the worker's Social Security contribution. The TGSS works it out on the contribution base for her monthly pay band (Order PJC/297/2026, Article 15), for the days she was registered (the 3 days worked plus the 20.22 days of untaken holiday, Article 147.1 LGSS), not as 6.40% of this figure: at the 2026 minimum wage (base 1,424.50 €) that comes to roughly 70 €.

For the calculation to be correct, you need to start from a properly prepared payslip and the salary in force. See our guides on how to prepare a payslip for a domestic worker and how much a domestic worker earns in Spain in 2026. If you would rather hand over the registration, payroll and termination process, take a look at our prices.