Learn the ins-and-outs of employee leasing in Greece
NNRoad provides full HR outsourcing services so you can hire employees in Greece, prior to having a legal entity there.
Read on to learn about the requirements to hire employees in Greece and be in touch to further discuss NNRoad’s employee leasing services.
A. Contract to hire employees in Greece
Employment contracts don’t have to be presented in writing to be valid. However, conditions of employment must be presented to the employee in writing.
The Labor Code requires that the employee’s benefits, working hours, salaries, and work schedule are provided to the employee.
B. Immigration Requirements
One of three work permits must be obtained to work in Greece: Non-EU/EEA citizens must obtain a visa to enter Greece and must then obtain a residence permit. EU/EEA citizens don’t need a visa to enter or work in Greece.
C. HR & Labor
Working hours: Full-time employees will work 40 hours a week.
The 40 hours are typically divided into
(1) 5 days a week and 8 hours a day
(2) 6 days a week and 6 hours and 40 minutes a day.
Employees can typically work 45 hours a week during a 5-day workweek or 48 hours during a 6-day work week. However, they will be guaranteed overtime pay of 120% of usual wages. Moreover, employees are guaranteed a 15-minute break if the workday lasts more than 6 hours.
Minimum working age: Employees must be 15 years old.
D. Payroll
Salaries are disbursed on a monthly basis, with the payday typically being at the end of the month.
E. Social Security
When hiring employees in Greece, social security contributions are mandatory and are to be made to the Unified Social Security Fund (E.F.K.A.).
The below rates apply for E.F.K.A. fund covering salaried employees:
Contribution rates in Greece
Social insurance in Greece: 16% of employee’s monthly gross salary.
Social insurance in Greece: 25.06% of the employee’s monthly gross salary.
F. Individual Income Tax & Benefits in Greece
Greece tax withholding is handled as a Pay-As-You-Earn.
Employers are required to withhold income tax from salaries, wages, and other remuneration paid to their employees.
The amounts withheld are determined in accordance with the scale of income tax rates applicable to individuals.
Benefits in kind are not subject to payroll income tax withholdings. Income tax must be withheld on a monthly basis by the employer. An individual is required to file a tax return every year.
*Note: The above rates do not include the Medicare levy of 2%. The above rates include changes announced in the 2018-19 Federal Budget.
Certain expenses are deducted from the gross income to reach taxable income. These deductible expenses include the following:
- Social security contributions
- Alimony paid by divorced spouses (only to each other) based on a notary deed. The maximum alimony on which a tax deduction of 10% is calculated is EUR 15,000.
- Donations and grants of specific instances and to restrictively listed bodies and organizations. The maximum amount of deduction is 5% of the total taxable income.
Residents receive the first AUD 18,200 of taxable income tax-free. Non-residents generally don’t benefit from a tax-free threshold, nor do they qualify for the various tax rebates and tax offsets
Family Tax Benefits- Provided family income is below certain thresholds.
Resident individuals may be entitled to Family Tax Benefit payments if they have a dependent child or a secondary school student under the age of 20 for whom one cares for at least 35% of the time.
The limits, rates, and nature of Family Tax Benefit payments vary. They depend upon family income, number of children, and ages of children. Also, they may change from year to year.
The standard VAT rate is 24%. The reduced rate for basic necessities is 13%. A super-reduced rate of 6% is imposed for certain medicines and vaccines intended for human consumption.
G. Employee Termination Policies
An open-ended employment agreement of a private employee who has worked for the company for more than 12 months can’t be terminated without prior written notice from the employer. It will take effect from the day after the employee is notified with the following conditions:
- For employees who have served from 12 completed months to two years, one month’s notice is required before dismissal;
- For employees who have served from two to five years, two months’ notice is required before dismissal;
- For employees who have served from five to 10 years, three months’ notice is required before dismissal; and
- For employees who have served 10 years or more, four months’ notice is required before dismissal.
Termination in the event of redundancy:
Collective redundancies are dismissals carried out by businesses or holdings employing more than 20 workers for reasons that do not concern the individuals being dismissed but rather any other financial or technical shortcomings of the business.
The provisions applicable to the calculation of compensation also apply to collective redundancies.
*Severance Pay
In the case of an open-ended employment agreement terminated by the employer, the severance pay is calculated accordingly:
*Note: There is a reduction in redundancy pay from 16 weeks to 12 weeks for employees with at least 10 years of continuous service.
H. Probationary Period
Employment with an open-ended employment agreement is considered to be employed for a probationary period for the first 12 months from the date that it comes into force.
An employment agreement may be terminated without notice and without severance pay. (Unless agreed by the parties.)
I. Rest & Holiday Leaves
An employee is entitled to a leave of 24 working days if the business operates a six-day working week system.
Or if the business operates a five-day working week system, of 20 working days. The employer is obliged to grant the annual leave by the end of the calendar year.
Contact us today to set up a discussion with NNRoad’s experienced consultants. We can provide more information about hiring employees in Greece and also learn more about your specific requirements.
