Your guide to payroll in Greece

Greece has a distinct payroll landscape, which is shaped by strong labor protections, civil law traditions, and a multi-layered social insurance framework under EFKA. 

Businesses looking to expand into the Greek market must have thorough knowledge of 14-month salary structures, collective agreements, strict termination rules, and more. 

This guide walks you through Greek payroll in detail, including social security contributions, employer taxes, income tax, and more. Employers must maintain payroll compliance in Greece for smooth business operations. 

A workforce management platform, like Payoneer Workforce Management, can assist with Greece payroll processing and help streamline the procedure for onboarding talent and payroll management in Greece. 

Read on to know more about how to pay employees in Greece. 

Greece payroll: Wages and other payments

Employers must pay employees in Greece by remaining compliant with the payroll regulations in the country. Employees are entitled to a minimum wage, sick pay, overtime pay, maternity and paternity pay, and more in the country. Here are the details:

Payroll cycle in Greece

The payroll cycle in Greece is monthly. The pay date in the country is the last day of the month. 

Minimum wage

The payout currency in Greece is the Euro (EUR, €). The minimum wage in Greece is €830 per month. 

Overtime pay

Employees in Greece are entitled to overtime pay. The overtime hours in the country are:

• For a 5-day week, 5 hours of overtime per week
• For a 6-day week, 8 hours of overtime per week

Sick pay

Employees in Greece are entitled to sick pay. 

• Workers who have worked for just 10 days with an employer before falling sick will receive 15 days’ pay if they spend the first year of service or one month for the following years with the same employer. 
• If the illness lasts for three days, employees will receive ½ of their daily wage for each of the three absent days. This is the maximum limit. 
• If the sickness persists for more than 3 days, the employee will receive sickness benefits from IKA-ETAM from the 4th day till the sickness subsidy lasts. 

Maternity pay

The Public Employment Service (DYPA, formerly OAED) manages maternity pay in Greece. Female employees in Greece are entitled to 119 days of maternity leave in the country – 56 days before childbirth and 63 days after the delivery. 

Eligible mothers are entitled to a special maternity protection allowance for 9 months. The allowance is paid at a rate equivalent to the statutory minimum wage. 

Paternity pay

Male employees in Greece are entitled to paternity leave for 14 working days. Employers have to pay 100% of the employee’s regular salary. 

Severance pay

Severance pay in Greece is determined by the employee’s employment duration. Here are the details:

Payroll in Greece: Contributions and deductions

Similar to Belgium, payroll management in Greece includes accounting for a well-defined set of statutory contributions and deductions. Right from withholding income tax in Greece to social security contributions, all taxes must be calculated accurately and remitted on time. 

Income tax

Employees have to pay income tax in Greece. The country has a progressive tax slab from 22% to 45%. 

Social security contributions in Greece

Social security contributions in Greece are made both by the employee and the employer. The contributions are calculated as a percentage of gross earnings. Employee and employer contributions vary. 

• Employees have to pay 13.87% for social security contributions. 
• The percentage of employer taxes in Greece for social security contributions stands at 22.29%. 
• The total percentage is 36.16%.  

For an employment cost breakdown, employers can use our employee cost calculator for detailed calculations. 

Other employee benefits

Though employees have to pay an income or salary tax in Greece, there are some amazing employee benefits they can enjoy. Some of them are as follows:

Public health insurance

In Greece, employees get mandatory public health insurance. The insurance is provided by the Greek National Health System (ESY). 

Earned/Annual leave

Employees in Greece are entitled to earned/annual leave, based on their employment tenure. 

Annual bonus

An annual bonus is a major benefit for employees in Greece. Employees in the country are entitled to 13th and 14th-month salaries. 

• By 21st December, employees get the 13th-month salary in full for Christmas. 
• The 14th-month salary is divided into two payments. The first half is disbursed at Easter and the other half in the summer. 

This typically accounts for the holiday or vacation bonus.

Leave allowance

In Greece, employees are entitled to a leave allowance. It typically doesn’t exceed half of the regular salary. It is calculated based on the number of sick days taken, and it must be paid before the summer vacation.

Greece payroll compliance best practices

Payroll compliance in Greece is mandatory for employers to reduce legal hassles and penalties. Employers have to abide by the various labor and tax regulations in the country. 

Here are some payroll compliance best practices in Greece:

• Staying updated with legislative changes is a must. Greek labor and tax laws are updated frequently. Monitor announcements from AADE (Greek Tax Authority) and EFKA so that all the latest regulations are followed in payroll practices. 
• Maintain accurate employee records by documenting employee contracts, working hours, salary details, and leave balances for audits and inspections. Employees have a payslip requirement in Greece as salary evidence. 
• EFKA contributions and income tax withholdings must be submitted within the stipulated monthly deadlines. This helps avert interest charges and penalties. 
• Always verify if company-level or sector-specific collective bargaining agreements apply. These might set terms beyond the statutory minimums. 

Your options for payroll services in Greece

If you want to engage talent and manage effective payroll in the country, you can choose from the three ways mentioned below:

• Set up a local entity in the country: If you set up a local entity in Greece, employers can make a legal business presence. Though this is a time-consuming process, it helps standardize your control over payroll management in Greece. 

• Hiring independent contractors: Employers can hire independent contractors in Greece for a particular task/project. The contractors get their payment at the end of the project. Employers typically have no liabilities towards the contractors. However, one must be aware of misclassification risks, as they can lead to penalties.

• Workforce management platform: Seeking assistance from a workforce management platform helps with Greece payroll processing, along with onboarding and local compliance. Employers can maintain the Greek payroll seamlessly with such a platform. 

Payoneer Workforce Management not only helps you streamline payroll management in Greece, but also offers support with employee onboarding, taxation, compliance with local labor laws and regulations, leave and benefit entitlements, and more. Employers can minimize administrative work with the help of this platform. 

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FAQs

1. How does Payoneer Workforce Management help pay employees in Greece?

Payoneer Workforce Management helps with engaging talent and payroll management in Greece. It assists with employee salaries and wages, along with necessary deductions and contributions. The platform offers a unified dashboard for managing employees, Greece payroll processing, and localized benefits as per local regulations. 

2. How is income tax calculated for employees in Greece? 

Income tax in Greece is calculated on a progressive scale, ranging from 22% to 45%, depending on annual earnings. Employers are responsible for withholding and remitting the correct tax amount each month.

3. What records must employers maintain for payroll compliance in Greece?

Employers must keep payroll records, employment contracts, tax filings, and contribution receipts for a few years. These documents are essential during audits conducted by AADE or EFKA.

4. What are the employer social security contribution rates in Greece? 

Employers contribute approximately 22.29% of an employee’s gross salary to EFKA, covering pension, healthcare, and other social insurance funds, in addition to the employee’s own contributions.

5. What are the deadlines for submitting payroll contributions in Greece?

EFKA contributions and income tax withholdings are typically due by the last working day of the month following the payroll period. Missing deadlines results in financial penalties and interest charges imposed by the authorities.