Final Settlement in Spain: What It Includes and How to Check It Before Signing

Paola is 33, she is Peruvian and she lives in Zaragoza with her residence and work authorization. She has spent eight months as a warehouse worker at a logistics company, on a temporary contract due to production circumstances. Today is her last day. Mid-morning, human resources calls her in, puts a sheet of paper in front of her and says: “Sign quickly so we can make the transfer.” (The details of the case are illustrative.)

If your contract is also about to end, this article is for you. We will look at what the final settlement (finiquito) in Spain includes, how to check it before signing, what signing “received, not in agreement” (recibí, no conforme) means and how long you have to make a claim if something is missing. If you would like your final settlement reviewed before you sign it, you can message Fernanda Vargas on WhatsApp or book an appointment on her Calendly.

“Sign quickly so we can make the transfer”: Paola’s last day

The sheet Paola is given is titled “balance and final settlement” (saldo y finiquito). It has only a few lines. The first is the salary for the 20 days she has worked this month. The second says: “vacation: taken”.

Paola stares at that second line. In eight months she has only had five days off for vacation. She also sees nothing about the extra payments, which she has never received because they were not prorated in her payslips. And there is no severance pay at all, even though a coworker told her that when a temporary contract ends “they have to pay you something”.

Paola earns €1,400 gross per month in twelve payments. She is in a hurry, she needs the money and human resources keeps insisting that she sign now. This is exactly the moment when many people sign without reading. Let’s go step by step through what she should check before picking up the pen.

What the final settlement is and what the company must give you

The final settlement (finiquito) is the document that pays off the amounts the company owes you when your contract ends. Settling (liquidar) means doing the final accounts: adding up everything you are entitled to and have not yet been paid. That is why it is also called the “settlement document” (documento de liquidación) or “balance and final settlement”.

The final settlement is given when the employment relationship ends, whatever the reason: the end of a temporary contract, a dismissal or a resignation. What changes depending on the reason is whether or not there is severance pay. For example, if you leave of your own accord (resignation), you are not entitled to severance pay, but you are entitled to the other outstanding items.

The law does not allow the company to simply hand you the paper at the last minute. Article 49.2 of the Workers’ Statute (Estatuto de los Trabajadores) says:

“When the contract is terminated, upon notifying the workers of the termination or, where applicable, of the notice of termination, the employer must enclose a proposed settlement document of the amounts owed. The worker may request the presence of a legal representative of the workers at the time of signing the receipt of the final settlement, and the receipt shall state that it was signed in the presence of a legal representative of the workers, or that the worker did not make use of this option. If the employer prevented the presence of the representative at the time of signing, the worker may record this on the receipt itself, for the appropriate purposes.”

Put simply, this article gives you three guarantees:

• A proposal in advance. When the company informs you that the contract is ending (or gives you notice, that is, advance warning that it is going to end), it must enclose a proposed settlement. That way you have time to review it before signing.
• A representative by your side. You can ask for a legal representative of the workers to be present when you sign. The receipt must state whether you signed with a representative or did not use that option.
• A record if they prevent it. If the company does not let the representative be present, you can write that on the receipt itself.

In Paola’s case, the company had known for a long time when her contract would end. It could have given her the proposal in advance. Paola has the right to ask for that proposal in writing, to take it with her, to check it calmly and to ask for a workers’ representative to accompany her when she signs.

Item by item: salary, extra payments and vacation

Every final settlement is different, but some items appear almost always. To check them you need three documents: your contract, your payslips and the collective agreement (convenio colectivo) that applies at your company (the agreement for your sector that sets wages, extra payments and vacation).

1. Salary for the days worked in the last month

This is the simplest: you must be paid for the days you have worked in the month your contract ends and have not yet been paid for. Paola’s sheet does include this: her 20 days this month.

2. The proportional share of the extra payments

Many collective agreements provide for extraordinary payments (the “extra payments”, pagas extra). These payments build up little by little, month by month, even though they are paid on a specific date. If your contract ends before that date, you are entitled to the proportional share (parte proporcional): the portion of the payment you have already earned with the time you have worked.

Watch out for one important detail: if you received your extra payments prorated, that is, spread across each month in your payslip, you have already been receiving them and they should not appear again in the final settlement. If they were not prorated, as in Paola’s case, the share earned and not yet paid must appear.

How many payments there are, how much they are and over what period they are earned depends on your collective agreement. That is why there is no single formula: you have to look at what yours says.

3. Vacation earned and not taken

Vacation is meant for rest. But when the contract ends, the vacation you have earned and not taken is paid in money in the final settlement. You can read more about this in our article on when unused vacation days are lost.

The legal minimum is 30 calendar days of vacation per year, although your collective agreement may improve on it. If you have not worked the full year, you earn the share proportional to the time worked. That line saying “vacation: taken” is exactly the one Paola needs to challenge: it is not true that she has taken it all.

4. Severance pay, if applicable

Severance pay depends on the reason the contract ends: the end of a temporary contract, an objective dismissal, an unfair dismissal, and so on. Resignation, as we have seen, does not give the right to severance pay. In Paola’s case, the reason is the end of her temporary contract, and that has its own rules.

Severance pay at the end of a temporary contract: 12 days per year

Many people believe that nothing is paid when a temporary contract ends. That is not the case. Article 49.1.c of the Workers’ Statute provides:

“On completion of the contract, except in training contracts and fixed-term contracts for substitution, the worker shall be entitled to receive compensation equivalent to the proportional share of the amount that would result from paying twelve days’ salary for each year of service, or that established, where applicable, in the specific regulations that apply.”

In other words: when your temporary contract ends, you are entitled to severance pay of 12 days’ salary for each year worked, in proportion to the time you have been there. If you have worked less than a year, you receive the proportional share of those 12 days.

There are two clear exceptions: training contracts (contratos formativos) and substitution contracts (those signed to cover for another person). In those cases, this severance pay does not apply. In addition, the law preserves any compensation set, where applicable, by specific regulations.

Paola has a contract due to production circumstances, which is neither a training nor a substitution contract. She is therefore entitled to this severance pay, and it does not appear on her sheet.

This severance pay is not the same as severance for dismissal. If your contract does not end because it reaches its end date but because you are dismissed, the rules are different: you can read about them in our article on severance pay for unfair dismissal.

Paola’s numbers, step by step

Let’s work through an example with Paola’s figures. Remember that these figures are illustrative and that, to keep things simple, we start from several assumptions that may be different in your case:

• We use a reference daily salary of about €46.67 (€1,400 divided by 30 days). The salary used as the basis in your case may be different.
• We assume that Paola’s collective agreement provides for two extra payments of one month’s salary each (€1,400), earned over the course of the year, and that she has not received either of them. Your agreement may set other payments, other amounts or other periods.
• We apply the legal minimum of 30 calendar days of vacation per year.

With those assumptions, the numbers would look like this:

Item	Example calculation	Approximate amount
Salary for the 20 days of the last month	20 days × €46.67	€933 (already on her sheet)
Proportional share of the two extra payments	2 payments × €1,400 × 8/12 months	€1,867
Vacation not taken	30 days × 8/12 = 20 days earned, minus 5 taken = 15 days × €46.67	€700
Severance pay for end of contract	12 days × 8/12 = 8 days × €46.67	€373

According to this example, Paola’s sheet would be missing about €2,940 gross: the extra payments, 15 days of vacation and severance pay of about 8 days’ salary. That is not a small amount for someone who was about to sign “quickly”.

What matters is not the exact amount but the method: checking one by one that each item appears and that the numbers match your contract, your payslips and your collective agreement.

How to sign without losing your rights: “received, not in agreement”

Paola is not obliged to sign without checking. She has the right to ask for the proposal in writing, check it and, if she wishes, ask for a workers’ representative to accompany her. But what if she wants to collect what she is being offered now and, at the same time, claim what is missing?

That is what the wording “received, not in agreement” (recibí, no conforme) is for. By writing it next to your signature, you make it clear that you are receiving the amount paid to you but that you do not accept the numbers as correct. That way you collect what is offered and keep the option of claiming the difference. “Pending review” (pendiente de revisión) is also used.

If Paola decides to sign, the recommended steps are:

• Write “received, not in agreement” (recibí, no conforme) or “pending review” (pendiente de revisión) by hand next to her signature.
• Add the date.
• If she asked for a representative and the company did not allow them to be present, record that on the receipt itself.
• Keep a copy of the signed document.

And what happens if you sign without adding anything? A final settlement signed without reservations may have a releasing effect (efecto liberatorio), that is, it may serve to close the accounts between you and the company. That is why it is best not to sign blindly. That said, signing the final settlement is not a blank check: the courts review its content and assess each case, and the law does not allow you to waive non-waivable rights (Article 3.5 of the Workers’ Statute), that is, rights the law grants you that you cannot give up even if you sign otherwise.

Deadlines to claim: 20 days or one year

If something is missing from your final settlement, time is against you. There are two very different deadlines and it is important not to confuse them.

One year to claim amounts owed

If what you want is to claim money you are owed (extra payments, vacation, end of contract severance pay…), you have a deadline of one year (Article 59.2 of the Workers’ Statute). This is the most common case, and it is Paola’s if she only wants to collect what is missing.

20 working days to challenge a dismissal

If what you want is to challenge a dismissal or the termination of a temporary contract that you consider fraudulent, the deadline is much shorter. Article 59.3 of the Workers’ Statute says:

“The action against dismissal or termination of temporary contracts shall lapse twenty days after the day on which it occurred. The days shall be working days and the time limit shall be a limitation period for all purposes.”

This means you have 20 working days from the date of the dismissal or the termination of the contract. It is a limitation period (plazo de caducidad): once it passes, you can no longer bring a claim against the dismissal. And this deadline runs whether or not you have signed the final settlement.

For example, if Paola believed that her temporary contract was actually a sham (that she was hired as temporary for work that was not temporary) and that what has happened is a dismissal, she would have only 20 working days to challenge it. In that case it is best to act quickly and get the case reviewed as soon as possible.

Your final settlement checklist

Before signing, go through this list with your contract, your payslips and your collective agreement in front of you:

• Have you been given the proposed settlement in writing and with time to review it?
• Does it include the salary for all the days worked in the last month?
• Did you receive your extra payments prorated? If not, does the proportional share earned under your collective agreement appear?
• How many vacation days have you earned and how many have you taken? Are the missing ones paid?
• What is the reason for the termination? If it is the end of a temporary contract (other than a training or substitution contract), does the severance pay of 12 days per year, in proportion to the time worked, appear?
• Do you want a legal representative of the workers to be present? Ask for it.
• If you do not agree, have you written “received, not in agreement” and the date next to your signature?
• Have you kept a copy of everything?
• Are your deadlines clear: one year to claim amounts owed and 20 working days if you want to challenge a dismissal?

If something does not add up or you have questions about your collective agreement, Fernanda Vargas, employment lawyer in Madrid, can review your final settlement and help you claim what is missing. You can see how she works on her employment law page.

And Paola? In the end she did not sign in a rush. She asked for the sheet, checked it against her payslips and her collective agreement and confirmed that the extra payments, 15 days of vacation and the end of contract severance pay were missing. She signed “received, not in agreement”, with the date, kept a copy and collected what she was offered. She now has one year to claim the difference.

Frequently Asked Questions

If you have been given your final settlement and are not sure it is correct, message Fernanda Vargas on WhatsApp or book an appointment on her Calendly. She will go through each item with you before you sign or help you claim what is missing.