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GDPR Obligationscalendar_todayUpdated: 1 March 2026schedule4 min read

What Is a Processing Agreement?

verifiedLast reviewed 1 March 2026 · GDPRWise legal team

A processing agreement is mandatory when you have personal data processed by an external party. Learn what it must contain and download our free template.

summarizeKey Takeaways
  • check_circleA processing agreement is mandatory as soon as you have personal data processed by a third party
  • check_circleThe contract must cover at least 8 topics, including security measures and sub-processors
  • check_circleWithout a processing agreement you risk a fine of up to 10 million euros or 2% of annual turnover

What is a processing agreement?

A processing agreement (also known as a Data Processing Agreement or DPA) is a contract required under the GDPR when an organisation has personal data processed by another party. This contract governs the responsibilities and obligations of both parties.

When do you need a processing agreement?

You need a processing agreement when you share personal data with an external party that processes this data on your behalf. Examples include:

  • Your accountant who has access to employee data
  • An email marketing tool such as Mailchimp or ActiveCampaign
  • Your cloud storage service (Google Workspace, Microsoft 365)
  • An external payroll processor

What must it contain?

The GDPR (Article 28) requires a processing agreement to cover at least the following topics:

  1. The subject and duration of the processing
  2. The nature and purpose of the processing
  3. The type of personal data and categories of data subjects
  4. Security measures
  5. Engagement of sub-processors
  6. Assistance with data subject requests
  7. Data breach notification obligations
  8. Deletion or return of data upon termination

What if you don’t have a processing agreement?

Without a processing agreement, you are in breach of the GDPR. The supervisory authority can impose fines of up to 10 million euros or 2% of your annual turnover, whichever is higher.

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This article was written by the GDPRWise team and reviewed by our privacy experts. We regularly review our content for accuracy and legal correctness.