When a job ends in Spain, two very different payments often get confused: the finiquito and the indemnización (severance). Foreign workers are frequently told they got a "finiquito" and assume it includes compensation for the dismissal — it usually does not. Knowing the difference protects you from signing away money you are owed.
Quick comparison: finiquito vs severance
| Concept | Finiquito | Severance (indemnización) |
|---|---|---|
| What is it? | Settlement of money already owed | Compensation for ending the contract |
| When is it due? | Always, at any contract end | Only for certain dismissals |
| If you resign? | Yes | No |
| Unfair dismissal? | Yes | Yes (33 days/year) |
| Objective / collective? | Yes | Yes (20 days/year) |
| End of temporary contract? | Yes | 12 days/year (per contract) |
| Taxed in IRPF? | Yes (as normal pay) | No (up to legal limit) |
What the finiquito includes
The finiquito settles everything the company owes you when the relationship ends, regardless of the reason. The usual items are:
- Pending salary: the days of the current month already worked but not yet paid.
- Proportional extra payments: if you have not yet received the extra payment (paga extra) for the current period, you are owed the proportional part since the last one.
- Unused holiday: holiday accrued during the year that you could not take, calculated on your gross daily salary.
- Pending extras: commissions, overtime, allowances or any other earned but unpaid salary item.
Example finiquito calculation
An employee on €2,000 gross/month plus two extra payments of €2,000 each. Collective agreement: 22 working days of holiday. Dismissed on 15 June, with no holiday taken in 2026:
Note this is gross and taxed as salary. It is entirely separate from any severance for the dismissal itself.
What severance is and when it applies
Severance (indemnización) compensates you for the loss of the job, and only applies to certain dismissals: 33 days per year for unfair dismissal (capped at 24 months), 20 days per year for objective or collective dismissals, and 12 days per year at the end of most temporary contracts. If you resign, there is no severance. Statutory severance is exempt from IRPF up to €180,000.
Can I accept the finiquito and still challenge the dismissal?
Yes — but be careful how you sign. Signing the finiquito as "recibido" (received) acknowledges only that you got the money. Signing as "conforme" or accepting "saldo y finiquito" (settled and finished) can be read as waiving further claims. If you intend to challenge the dismissal, add "no conforme, pendiente de revisión" (not in agreement, pending review) next to your signature and keep a copy. You still have only 20 business days to file a conciliation claim.
Check your severance entitlement by salary, contract type and years worked. Free, no sign-up.
Redundancy Pay Calculator →Frequently asked questions
What is the difference between finiquito and severance?
The finiquito settles money already owed (paid at any contract end). Severance compensates for the dismissal and only applies to certain terminations. You can get both when dismissed.
What does the finiquito include?
Pending salary, proportional extra payments, unused holiday and any pending commissions or overtime. It is taxed as normal salary.
Do I get a finiquito if I resign?
Yes — it settles what you already earned. But there is no severance if you resign voluntarily.
Can I refuse to sign?
Yes. Sign as "recibido" (received), not "conforme" (agreed), to keep the right to challenge later.
Is unused holiday paid?
Yes, holiday accrued but not taken is paid in the finiquito, on your gross daily salary.
How long to pay it?
Normally on the last day or with the final payslip. Late payment can be claimed and may carry interest.