Expatriates who wish to live and work in the Balearic Islands must be in possession of a Spanish work permit. Work permits for the Balearic Isles can be applied for and obtained at the nearest Spanish embassy. Alternatively, foreign nationals can contact the Spanish Ministry of Labor for further advice and to find the relevant application forms. In order to be granted a work permit, the expat must be shown to have a sufficient skill set and adequate experience to fill the Balearic Islands position they are applying for. The applicant must have an official letter confirming an offer of employment from a company registered in Spain. Alternatively, if the company is registered overseas, then the applicant must have a minimum of six months' experience with the business and an official letter describing the assignment at hand. Preference is given to foreign workers with some demonstrable link to Spain, particularly Latin American citizens.
The autonomous regions of Spain, including the Balearic Islands, contribute more than 50% of Spain’s entire tax revenue. Income tax in the islands is regulated and overseen by the Central Spanish Tax Authority, Agencia Tributaria. Foreigners who have resided in the Balearic Islands for 183 days or more will be officially considered to be a Spanish resident. Most employers use the PAYE system and deduct the income tax from their employees’ wages, alternatively residents must declare their worldwide net income at the end of each tax year: the deadline is the 30th June. Workers in the Balearic Islands who earn less than 12,450 EUR are eligible to pay the minimum amount of 20% income tax. Anyone earning between 35,200 EUR and 60,000 EUR is liable to pay 39% and for any income above this amount, the maximum tax rate is 47%.
Employees in the Balearic Islands pay contributions towards the island’s social security system by the income tax deducted from their earnings. These payments go towards welfare benefits which are awarded to residents who have been debilitated by illness or injury, old age pensioners, parents on maternity or paternity leave and the long-term unemployed, among others.
The retirement age in the Balearic Islands is 65, although this age is lowered for arduous or dangerous work. To be eligible to receive a retirement pension, the worker must have paid at least 30 years’ worth of social security contributions. As such, expats are often exempt, however, those hailing from other EU member states can take advantage of the EU Social Security Coordination.