A senior software engineer costs a US company roughly three times what the same engineer costs in Spain. The median tech salary in Spain sits around €54,000 a year against €168,000 in the United States, and a quarter of American developers clear €240,000, four times what most Spanish senior profiles earn.
That gap is not a statement about talent. It is a statement about two labour markets, and for a US company willing to hire across the Atlantic it is the single largest lever on engineering cost that does not involve lowering the bar.
This guide is written for the company doing the hiring, not the candidate. What the numbers actually are by role, what lands on your P&L once employer costs are counted, what the engineer takes home after Spanish tax, and the three legal routes to put someone on the payroll.
What "average salary" means before you budget with it
Two figures circulate under that name and they do not say the same thing. Budget with the wrong one and you will be wrong in a predictable direction.
The mean is distorted by the top
The mean adds every salary and divides by the headcount, so outliers drag it upward. Five engineers where four earn $100,000 and one AI specialist earns $600,000 have a mean of $200,000, a number that describes none of the five.
The median is the one to use
The median is the midpoint: order every salary and take the middle one. Half earn more, half earn less. In that same team the median is $100,000, which does describe the typical engineer.
Every figure in this article is a median unless stated otherwise. When you read a salary report that only publishes an average, assume it is inflated by the top tail.
And a national figure still decides nothing
Even the median moves by market. In the US, a software engineer in fintech and a civil engineer in construction are not in the same market; $150,000 in San Francisco and $150,000 in Austin are not the same life. In Spain the same is true between Madrid and a smaller provincial capital, though the spread is far narrower.
The gap by role
The difference holds across the profiles US companies hire most, which is what makes the arbitrage reliable rather than anecdotal.
| Role | Spain (median) | United States (median) |
|---|---|---|
| Software engineering | €61,000 | €165,000 |
| DevOps and cloud | €60,000 | €175,000 |
| Data science and AI | €64,000 | €170,000 |
A three-person team covering those disciplines costs about €185,000 a year in salary in Spain. The same three people in the US clear €500,000.
One caveat that costs the most when ignored: these are medians. They describe the market, not the specific person you want. Hiring in the top 1% of local talent runs 30% to 40% above these bands. That is the engineer other companies are chasing too, who is not looking, and who turns down two approaches a month. A role the median puts at €61,000 closes at €79,000 or €85,000 when the candidate is that one.
That is still a fraction of the US equivalent. But budgeting at the median while interviewing for the top 1% is the most expensive contradiction in this market: you pay for the full process, reach the final call, and lose the candidate over a gap you could see coming from the start.
What it actually costs you as an employer
Gross salary is not your cost. This is the section US companies most often get wrong, because the Spanish structure has no direct American equivalent.
Employer social security contributions sit on top of gross pay. In Spain the employer pays a substantial contribution for every employee, covering healthcare, pensions, unemployment and workplace accident cover. It is a meaningful percentage of gross, not a rounding error. It is not deducted from the employee's salary; it is added to your cost. Confirm the current rate with your gestoría or your EOR before you model headcount, because the bases and caps are revised annually.
Salaries are usually quoted in 12 or 14 payments. The Spanish norm is fourteen: twelve monthly payments plus two extra payments, typically in July and December. The annual gross is the same either way: €56,000 over fourteen payments is €4,000 a month, not €4,667. But a US hiring manager reading a monthly figure will misjudge the annual number by around 17% in one direction or the other. Always agree the annual gross first.
Thirty calendar days of holiday is the legal minimum, roughly 22 working days, against the 10 to 15 days that are common in the US. It is not a benefit you offer; it is the floor.
Termination is not at-will. Spanish law provides severance calculated on seniority and the type of dismissal, with different rules for periods before and after the 2012 reform. If you are modelling worst cases, our severance pay calculator will give you the number for a specific case.
The practical takeaway: the fully loaded cost of a Spanish hire is meaningfully above the gross figure, and the comparison against a US salary still wins comfortably. But run it with the loaded number, not the gross one, or your first Spanish hire will land over budget for reasons that had nothing to do with the negotiation.
What the engineer takes home
The employee's side matters because it explains why a Spanish engineer accepts a number that looks low from Palo Alto.
The US deductions stack up
American gross is higher and shrinks the most on the way to the bank account:
- Federal income tax, progressive and the largest single piece.
- State income tax, from 0% in Texas or Florida to over 13% in California.
- Local tax in some cities, New York among them.
- Private health insurance, which can exceed $1,000 a month for family cover even with an employer contribution.
- 401(k) contributions, which are optional in name and near-mandatory in practice.
An engineer in Austin on $150,000 can see 30% to 35% disappear to federal tax and health cover alone, before state tax.
The Spanish deductions are simpler and buy more
In Spain the deductions are income tax (IRPF) and social security. Those contributions fund universal public healthcare at no additional cost, a contributory state pension, unemployment benefit, sick leave and parental leave.
A senior engineer in Madrid on €60,000 sees a total withholding of 30%: €3,900 in social security (the employee's 6.50%) and €14,131 in income tax. They keep €41,969 net a year, around €3,497 a month over twelve payments. You can check any other figure in our gross to net salary calculator.
So the gross is lower and the withholding is not small. What differs is the "social wage": those contributions buy healthcare, pension and unemployment cover that their American counterpart pays for separately, out of what is left after their own deductions.
If you want the exact take-home for a figure you are considering, our gross to net salary calculator does it by region and number of payments.
Purchasing power: why the number works for both sides
A high salary does not guarantee a better life; what matters is what it buys. This is where the comparison stops being lopsided.
Madrid against San Francisco
Rent, one-bedroom apartment:
- San Francisco: over $3,500 in the centre.
- Madrid: between €1,200 and €1,500 in the centre.
Transport and eating out:
- San Francisco: $81 monthly transit pass. Dinner for two over $100.
- Madrid: €21.80 monthly transit pass with the current subsidy. A comparable dinner, €50 to €70.
A developer in Madrid on €60,000 gross, around €3,600 net a month, can live better than one in San Francisco on $160,000, around $8,500 net, where rent alone can take 40% of it.
And the benefits culture is different
The American package is built around financial upside: RSUs as the main hook, performance bonuses worth 15-25% of base, private health cover as a standard benefit that is rarely free.
The Spanish package is built around time and security: 30 calendar days of holiday, real flexibility and remote work, and permanent contracts that offer a stability the at-will market does not have.
An offer that competes in Spain combines a salary above the local market with benefits that improve daily life. Matching a San Francisco number is neither necessary nor, usually, believable.