At Bradford Jacobs, our Employer of Records (EOR) platforms provide full-proof solutions for companies wishing to establish their presence in the Greek economy, where compliance with local laws and regulations is essential for a smooth and hassle-free transition. We offer dedicated Greece Payroll solutions that can be tailored to your requirements.
We make business expansion easy. We navigate the administration of the Greek payroll system for you: as part of our service, we can include the returns and associated payments for wage tax and social security contributions directly from our payroll system to the local tax authority. We do the work, so you do not have to.
You may encounter some challenges regarding payroll during your expansion into Greece but allow us to take the reins and see to them for you, and answer any of your questions and concerns with our trusty guide on payroll for Greece.
What Greece Payroll Options Are Available for Companies?
Greece has a variety of payroll options to work with, depending on your business’ needs:
- Remote payroll - Operating a single payroll system for all your employees, which is done by adding your employees in Greece to your parent company’s payroll – however, these employees will have to operate under different regulations.
- Internal payroll - You may also operate payroll out of your subsidiary, especially if you are committed to growing your company’s presence in Greece. However, this requires a dedicated HR staff that understands the local employment and compliance laws.
- Greece payroll processing company - This is a popular method for many companies in Greece – working with a Greece payroll processing company will help in outsourcing your payroll – but they will not be able to help when it comes to compliance.
- Greece payroll outsourcing - Another option that solves both needs is working with a company like Bradford Jacobs. We will handle both your payroll and compliance for all your employees in Greece. We take the stress of administration off your shoulders so you can focus on what you do best.
Greece Payroll Services
Payroll regulations change frequently and failure to comply with them risks sanctions and financial penalties. A crucial part of our payroll service includes staying up to date with these demands – which also features administering returns and associated payments for wage tax, social security contributions from our payroll system to the tax authority. Our role includes:
- Registering with the Greek Tax Office for a Greek Tax Identification Number (AFM)
- Registering with the Unified Social Security Fund (E.F.K.A)
- Registering with the National Social Security Office (NSSO) for a Social Security Number (AMKA)
- Registering with the General Commercial Registry (GE.MI)
- Creating employment contracts for your new employees
- Applying for employees’ special expatriation status (if applicable)
- Calculating employees’ monthly salary and sending them their pay slips
- Researching for any available tax incentives
- Submitting employees’ and/or employer’s wage tax returns and national insurance forms
- Corresponding with the applicable national authorities regarding payroll changes and payments
- Creating and submitting your company’s annual accounts, administration, and year-end statements
- Creating payment schedules for wage tax, national insurances, and net wages
- Ensuring proficient personal income tax returns for you and your employees
Outsourcing payroll is a popular practice for most Greek employers, and it’s easy to see why. Outsourcing your company’s payroll saves money and time, and guarantees paid employees, filed tax returns, and fulfilled social security obligations in full and on time. Bradford Jacobs provides the complete service to remove the anxiety and stress from your administration.
Learn more about Greece Payroll and PEO services
What Is Required to Set up Greece Payroll?
What is required to set up Greece payroll may depend on how you will be establishing your presence in the country. If you would like to set up as a subsidiary, you will need to have your subsidiary established first – but this can take some time, depending on where you incorporate and the type of entity you choose. To start processing payroll in Greece, you will need:
- a tax identification number (known as an AFM number)
- a social security number (known as an AMKA number)
- a local bank account
Registering with the local tax and social contributions authorities will take approximately 5 working days.
It should be noted that it is not necessary to require a license before making any tax or social security fillings on behalf of a client. To do this, a proxy will be required – however, the client can provide authorization for this.
What Entitlement/Termination Terms Are Needed to Set up Greece Payroll?
Greek workers benefit from entitlements for employment and termination, which are enforced by the local trade unions and employment organizations:
National Minimum Wage: The National Minimum Wage of Greece was recently increased in 2019 to €758.30 per month. Greek workers are also entitled to bonuses throughout the year, which corresponds to an extra two months’ salary: a full month for Christmas, half a month for Easter and a half a month for vacation.
Working Hours: In Greece, the standard working week is 40 hours, and cannot work more than 10 hours a day. However, Greek workers may choose to add a further five hours to this each week – which attracts a 25% bonus on their normal pay rate.
Any work that is over 45 hours a week is classed as overtime, which comes with a 50% bonus across a maximum of 120 hours per year. If the limit is surpassed, further work is paid with a 75% bonus.
Leave: Paid leave allowance in Greece increases according to length of an employee’s service. Employees working five-day weeks are entitled to 20 days in their first year and receive additional days after a certain number of years has been reached. The highest entitlement for an employee is 25 days, with at least ten years of service.
However, leave allowances are increased pro-rota for employees who work six days a week.
Sick Pay: Greek workers are entitled to 50% of normal pay for the first three days of illness, which is paid by the employer. If an employee is sick for more than three days, the Greek Social Insurance System (IKA) takes over and pays the rest.
Holidays: Employees are also entitled to paid leave for national public holidays, which are announced every year. 14 holidays are regularly adhered to:
- New Year’s Day
- Shrove Monday
- Independence Day
- Good Friday
- Easter Sunday
- Easter Monday
- Labor Day
- Orthodox Whit Sunday
- Orthodox Whit Monday
- Assumption of the Virgin Mary
- National Day
- Boxing Day
Employees required to work on a holiday are entitled to daily wages, and a 75% bonus. Public holidays falling on a weekend are not celebrated on another day.
Maternity & Paternity Leave: For maternity leave, an employee is entitled to 17 weeks – eight before the birth and nine after it – which is paid at 100% of their salary. After this, however, a six-month period of special leave may be taken, which is paid at the national minimum wage. Both maternity and special leave are funded by the Greek Social Insurance System (IKA) and the Manpower Employment Organization (OAED).
Paternity Leave is two working days at the time of the birth, which is paid by the employer.
There is also an entitlement to up to four months of unpaid parental leave (per child) for each parent – this may be taken at any time until the child is six years old.
Termination/Severance: Severance pay can vary significantly, depending on the employee’s length of service. An employee’s severance pay in Greece increases by one month’s salary per year. The pay starts at one month for employees working between 2 months to year. After that, the pay gradually increases to 6 months a year for 10 years of service. The pay can go up to a maximum of 2 years’ salary if an employee has been working for 28 years or more.
If an employee receives due notice for termination, however, these severance figures are halved.
Between 2 months & a year - one month’s salary
A year up to 10 years - six months’ salary
28 years or more - a maximum of two years’ salary
For Greece payroll, it is important to note that there are compulsory 13th and 14th month salaries. These salaries correspond with holiday and vacation leave, and are categorized as follows:
- Easter: half a month’s salary
- Vacation bonus: half a month’s salary
- Christmas: a full month’s salary
What Taxation Rules Exist for Payroll?
To efficiently work with Greece payroll, it is crucial to know the local tax regulations. Employees’ salaries are subject to tax deductions – the percentage used varies according to the employee’s annual income. Every second month, the employer is obligated to pay taxes withheld from the employees’ salaries until that time with the submission of the appropriate statement. The employer must also submit an annual statement recording the total financial data of the year.
Employers and companies in Greece are also obliged to other payments:
- Corporate Tax: Entities must pay a corporate income tax of 24% on annual profits. The taxable period is the financial year – which ends on 31 December or 30 June. Corporate income tax must be filed by the 10th day of the fifth month following the end of the financial year. The corporate tax is payable in six equal monthly installments, which commences on the filing of the tax return.
- Income Tax: Employers are required to withhold employees’ income tax and remit them to the Greek Tax National Authority (EFORIA) by the 20th day of each month. Employers filing late or incorrect taxes may face fines or criminal action.
Employee income tax is assessed on a progressive scale in Greece, with rates ranging from 9%-44%, depending on the employee’s annual income. The tax brackets are as follows:
€0 – €10,000 - 9%
€10,001 – €20,200 - 22%
€20,001 – €30,000 - 28%
€30,001 – €40,000 - 36%
€40,001 and higher - 44%
- Social Taxes: The Unified Social Security Agency (EFKA) administers contributions to retirement, sickness, industrial injury, unemployment, and maternity funds, as well as the national health insurance system. EFKA coverage generally begins on the first days of employment.
Employers are required to pay EFKA contributions (including those with-held) by the last business day of the month. Failure to do so or filing late or incorrectly subjects employers to fines of 10-50% of monthly contributions.
EFKA contributions are divided between the employer and the employee: employers contribute about 26% of the employee’s gross salary, and the employee contributes about 16%. EFKA contributions include:
Pension - 33% employer, 6.67% employee
Supplementary Pension - 25% each for employers and employees
Healthcare - 3% for sickness and 0.25% for cash benefits for employers, 2.15% for sickness and 0.4% for cash benefits for employees
Unemployment - 17% for employers and 1.83% for employees
High occupational risk (depending on the industry) - 3.25% for employers and 2.2% for employees
- Solidarity Tax: Employees in Greece must pay a solidarity tax supplement based on their annual income. Employers are obliged to withhold this tax and are responsible for remitting it to EFORIA monthly. The solidarity tax rates are:
0 – 12,000 - 0%
12,001 – 20,000 - 2.2%
20,001 – 30,000 - 5.0%
30,001 – 40,000 - 6.5%
40,001 – 65,000 - 7.5%
65,001 – 220,000 - 9.0%
220,0001 and over - 10.0%
For more information on taxes, you can check out our Greek Tax page, or check out the Greece’s Independent Authority for Public Revenue (IAPR) website (https://www.aade.gr/).
Save time and do your payroll right
If you are looking to expand into Greece and need your payroll managed with extensive operation in compliance, contact us today to see what our International Payroll Services can do for you.