Submit An Inquiry

Global Payroll Resources

Understanding Payroll in Greece: What Global Companies Need to Know About Greece’s Payroll

Jan 16, 2018 

Having held an iconic influence over human history and civilization, Greece is known for its many contributions to modern life, including democracy, the Olympics, and political science. Greece is also home to great natural beauty, ancient architecture, and a modern culture that is teeming with life. With a population of 10.75 million and a GDP of $194.6 billion, Greece has the infrastructure and workforce required by companies looking to expand internationally.

Currently the government and people of Greece are in a state of flux as they navigate a new direction for their economy. Companies looking to set up an international payroll will benefit from a payroll solution provider who understands the cultural and financial institutions and requirements in this historic nation. 

Business Basics

Companies must first register their name with the Commercial Chamber, before visiting the Notary Public and the General Commercial Registry to set up their organizations. In addition to the registration fees, businesses must provide their Articles of Association complete with information regarding the location, capital, and shareholders of the company. Non-EU companies will need to open a Greek bank account with a deposit of at least €60,000. Getting a bank account is relatively easy and shouldn't take longer than a couple business days, so long as companies have the proper paperwork. It's recommended that large companies do business in person with well-known bank branches. 

Employment Law & Employee Rights

Employers are not required to provide written contracts to employees upon hiring, though they are highly encouraged to do so. Probationary periods are allowed, with the maximum length of time determined by the nature of employment. For those on fixed contracts with a firm start and end date, employers and employees should negotiate the probationary period prior to employment. For indefinite employment periods, probation cannot last longer than one year. Collective bargaining was established in Greece in 2016; however, it's not clear yet if or how it will be practiced among the workforce.

The standard workweek in Greece is 40 hours. Greece has overwork and overtime laws, based on how much additional work is done per week. If an employee works a few extra hours, they qualify for overwork compensation, paid at 120% of their regular wage. Usually, overwork is up to 5 or 8 hours of additional time, depending on the employer and industry. Any additional hours count as overtime and are paid at 140% the normal salary. If an employee works more than 120 overtime hours in a year, overtime compensation is increased to 160% of the regular salary. 

Payroll Assessment

Compensation & Severance

The minimum wage in Greece is €684 per month, with the average income being €780 per month. In addition to salary, employers are required to provide both a Christmas and Easter bonus, each equivalent to 50% of an employee's monthly wage. Annual raises are customary, although wage growth is determined on an individual basis by employer and employee. Severance in Greece is dependent on how much notice the employee is given and how long they've been with the company. Employers may pay up to double the amount of severance if they don't give employees the required advanced notice. For example, individuals with five years of service for a company are entitled to at least three months’ notice of termination. The employer may pay just 1.5 months of salary with advanced notice, as opposed to three full months with no advanced notice. 

Tax Requirements & Withholding

The corporate tax rate in Greece is 29%, and personal income is taxed on a progressive scale. Employers are required to deduct taxes from the employee paycheck and distribute them to the appropriate tax offices. Social security is usually 27% of income; however, the percentage may be lower depending on your industry. VAT is anywhere from 6 to 24%. Tax exemptions include shares traded on the Athens Stock Exchange, as well as certain income derived from shipping. 

 Personal Income  Tax Rate
 Up to €20,000  22%
 €20,001 - €30,000  29% 
 €30,001 - €40,000  37% 
 €40,001 and more  45% 

 

Time Off & Paid Leave

Time off allowances vary in Greece depending on the length of employment and whether the employee works a five- or six-day week as standard. Within the first year of employment, workers receive paid holidays in proportion to the time they’ve worked, meaning they accrue vacation for each month worked, for a total of 20 days for the year (24 days for employees working six-day weeks). In their second year of employment, workers earn 21 days (25 for six-day schedules). Upon commencing their third year of work, employees are entitled to 22 days of paid time off from the very start of the year.

In the case of extended illness, employees are entitled to 15 days off with no pay if they have worked less than a year for the company. If they've worked more than a year, they are to receive up to one month of time off with full pay. Generally, Social Security will pay an ill employee's salary if the employer does not. New mothers receive up to 17 weeks off, with 8 weeks taken prior to giving birth. Employers cover one month of pay if the employee has worked for the company for more than a year. In addition, there are 12 public holidays that employers are expected to cover at full pay. 

Date  Greece Public Holiday Schedule
 January 1st  New Year's Day
 January 6th   Epiphany
 7th Monday before Easter   Clean Monday
 March 25th   Independence Day
 Friday before Easter   Orthodox Good Friday
 Monday after Easter  Orthodox Easter Monday
 May 1st  Labor Day
 50 days after Easter  Holy Spirit Monday
 August 15th   Assumption Day 
 October 28th  The Ochi Day
 December 25th  Christmas
 December 26th  Synaxis of the Mother of God

Looking Ahead 

The resilient island of Greece has undergone several changes in recent months, including revised taxation laws and payroll regulations. Working with an experienced global payroll solution that understands and monitors those changes can make all the difference in establishing your international payroll and maintaining compliance.


This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from a qualified professional.


Recent Articles

What to Expect in Global Payroll in 2019

This has been a significant year for global payroll and HR teams, with important technology developments, fundamental

5 Essentials for the Future of Payroll Shared Service Centers

Shared service centers (SSCs) have been in existence for many years, implemented primarily to reduce business’ costs.

Country Payroll Spotlight: 7 Key Facts about Payroll in Spain

As part of our continuing effort to help payroll professionals everywhere address the complexity of global payroll,

6 Keys to a Successful Global Payroll Implementation

Implementing a new global payroll solution can be a daunting prospect. Whether it’s the first global solution for your

HCM & Payroll Integration: A Look at CloudPay Connect 2.0

As organizations of all sizes continue to re-evaluate and address legacy HR and payroll systems and processes en route


About CloudPay

 
next generation payroll analytics

Next Generation Global Payroll Analytics: Your journey to building process transparency and making payroll a catalyst for improved business performance.

global payroll implementation

Global Payroll Implementation: A comprehensive guide to building a business case, selecting a solution and successfully deploying global payroll.

building a business case for global payroll

Building a Business Case for a Global Payroll Solution: Learn how to build a benefits-driven business case for a change in global payroll.

Unlock the
Possibility in
Your Payroll

Whether you manage payroll in five countries or 50, you need a global solution that ensures compliance beyond borders and insights that will move your company forward.

Contact Us Today
SIGN UP FOR OUR NEWSLETTER