Moving to a new city for work is one of the biggest expenses a worker can face. The good news is that Spanish legislation provides several mechanisms to ensure this cost does not fall 100% on your own pocket: employer reimbursement, IRPF-exempt allowances and, in some cases, tax deductions. We explain what you are entitled to and how to manage it.
Cases in which your employer must pay for your relocation
1. Compulsory transfer due to geographical mobility (Art. 40 ET)
If your employer transfers you to a workplace in a different municipality, requiring you to change your residence, the Workers' Statute grants you:
- Financial compensation covering your own expenses and those of dependent family members (removal, transport, temporary accommodation)
- 30 days to accept or reject the transfer
- If you refuse, the right to severance pay of 20 days per year worked, up to a maximum of 12 months' salary
Medium and large companies usually pay the full removal cost against invoice. Smaller companies typically offer a fixed amount (between €1,500 and €4,000) and you arrange the service yourself.
2. New employment with a relocation package
If a company hires you for a position in another city or country, it is standard practice in the technology, financial and healthcare sectors to offer a relocation package that includes:
- Professional door-to-door removal (budget against invoice)
- Temporary accommodation for 1–3 months
- Exploratory flights beforehand
- Legal advice on residence/visa if you are coming from outside the EU
IRPF-exempt expenses: the relocation allowance
The Spanish Tax Agency considers EXEMPT from IRPF the amounts your employer pays you for:
- Removal of personal effects (limit: the actual cost, justifiable with an invoice)
- Travel expenses for you and dependent family members
- Hotel accommodation for up to 9 months after the transfer (reasonable amounts)
This means that amount is not taxed: if your employer pays €3,000 for your removal against invoice, you receive the full €3,000 with no IRPF withholding. This is a significant tax benefit compared to regular salary.
Requirements for the exemption
- The transfer must be outside the municipality of your habitual residence
- It must be documented (employer's transfer order)
- Expenses must be supported by invoices in the name of the employee or the company
- The employer must correctly declare it in the annual Form 190
Work relocation to the Canary Islands: additional tax incentive
If your transfer takes you to the Canary Islands and you register as a resident there, you add to your IRPF savings:
- AIEM exemption on your personal belongings (no Canarian import duty)
- Canarian regional deductions on IRPF (more favourable than most other regions)
- 75% resident discount on flights and ferries to the mainland
- If you work for a ZEC (Canarian Special Economic Zone) company: Corporate Tax rate of 4%
We coordinate your removal with the necessary documentation (DUA, certificate of registration, employment contract) so that you can activate all incentives from the very first month.
Personal tax deductions (if your employer does NOT pay)
If the move is your own initiative or is not covered by your employer's package, the deduction is more limited. Removal expenses are NOT deductible on a personal income tax return as a general rule.
Exceptions:
- Self-employed individuals: if the move is required by your business (change of premises), it is 100% deductible as a business expense under IRPF
- Certified remote workers relocating to another region: in some cases, the costs of the workspace (not the full removal) are deductible if declared by the employer
- Economically dependent self-employed (TRADE): may deduct if the move is required by their main client
Time off and paid leave
The Workers' Statute grants 1 working day of paid leave for a house move (Art. 37.3 ET). Some collective bargaining agreements extend this to 2–3 days. Check your sector agreement: in hospitality, transport or Canarian retail, more days are frequently offered.
More details in our guide: How many days off for a house move are you entitled to.
Documentation you must keep
- Letter or email from your employer authorising the transfer and the reimbursable amount
- DETAILED invoice for the removal service (in your name or the company's name)
- Hotel/transport receipts for the days of the move
- Rental agreement/title deed at the new destination
- Certificate of registration at the new address
If the company pays the provider directly, it is in your interest to have the invoice issued in your name, or to request a copy, as this will make it easier to justify the exemption if the Tax Agency requests information from you.
Comprehensive service for work-related relocations
Horizont Atlantic regularly works with HR departments of companies transferring employees to the Canary Islands. We issue detailed invoices with all the necessary items for the IRPF exemption to be accepted by the Tax Agency, and we coordinate operations with your company's finance department if required.
Whether your employer has transferred you or you are moving voluntarily, request a quote indicating that it is a work-related move and we will send you a fiscally optimised proposal.
