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Working remotely for a German company while living in Spain is a common setup for software developers in Europe. Germany offers some of the highest remote salaries in the EU - a senior backend developer can earn around €95k gross. Meanwhile, Spain provides a lower cost of living, great weather, and a growing remote-first tech scene. But the legal and tax reality is more complex than just a simple job change.
When a German company hires you and you live in Spain, the arrangement falls into one of two categories. You can either become a Spanish autónomo, or the German company can employ you directly through an Employer of Record (EOR). As an autónomo, you register as self-employed in Spain and invoice the German company as a client. This is the simplest path for the employer, but it means you’ll have to pay your own social security contributions and manage quarterly VAT and income tax filings. On the other hand, if the German company employs you through an EOR, you’ll receive a Spanish payslip and have access to Spanish labor rights, including paid leave and social security credits for pension. However, EOR fees can add cost, which may be passed on to you as lower gross compensation.
So, which one is better? If the German company is large and well-funded, it’s probably worth pushing for EOR employment - the labor protections are significantly stronger. But if the role is contract-based or the company is a startup, being an autónomo is standard and acceptable. And let’s be real, the freedom to work for multiple clients and have full flexibility is a big plus.
Now, where do you pay taxes? Tax residency is determined by where you live, not where your employer is based. If you live in Spain for more than 183 days per year, you’re a Spanish tax resident and you’ll pay Spanish income tax on your worldwide income, including your salary from the German employer. Germany won’t tax your employment income as long as you’re not physically working from Germany for significant periods. There’s also a double taxation treaty between Spain and Germany that prevents you from being taxed in both countries, so you won’t have to worry about paying taxes twice.
Social security is another important consideration. Under EU social security coordination rules, you contribute to the social security system of the country where you work - which is Spain. As an autónomo, you’ll register with Spain’s RETA and pay monthly contributions, which will go towards Spanish healthcare, unemployment insurance, and eventually your Spanish state pension. If you’re employed via EOR, your Spanish payroll will handle this automatically.
When it comes to salary, German companies vary significantly in whether they apply location-adjusted pay or pay the same regardless of where the employee lives. Location-agnostic companies, like remote-first startups and scale-ups, will pay the same rate they would offer a Germany-based developer. But location-adjusted companies, like large German corporations, will anchor your offer to Spanish market rates, which can be significantly lower. For example, a senior backend developer in Spain can earn around €58k gross, compared to €95k in Germany. That’s a big difference - roughly 40-60%. So, before negotiating, it’s essential to determine which camp your target company is in.
To get a sense of the going rate, you can use the Xeito salary calculator to benchmark Germany vs. Spain rates for your exact role and seniority. And when negotiating, don’t be afraid to point out that your output is identical to a Germany-based developer. Many companies will meet you part-way if you push.
When reviewing your contract, make sure to check for key clauses like intellectual property, non-compete, termination notice, and currency. German contracts often include strong IP assignment clauses, so read these carefully. And if you’re moving to Spain for the first time, you may be eligible for the Beckham Law, which offers a flat 24% tax on Spanish-sourced income up to €600k for the first 6 years. That’s a significant tax break, so it’s worth exploring.
In the end, working remotely for a German company while living in Spain can be a great opportunity, but it’s essential to understand the legal and tax implications. By doing your research and negotiating a fair salary, you can make the most of this setup and enjoy the benefits of living in Spain while working for a German company. And who knows, you might just find that the freedom and flexibility of remote work are worth more than any salary.
Want the numbers for your situation? Try the Xeito remote-salary calculator — compare net take-home and cost of living across European tech hubs in 30 seconds.
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