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Payroll & Tax in Greece

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Greece payroll & taxation

In 2014, Greece made paying taxes more costly for companies by increasing the corporate income tax rate; though it also reduced the employers’ contribution rate to the social security fund.

In 2016, however, Greece made paying taxes less costly for companies by reducing the rates for social security contributions paid by employers, making insurance premiums fully tax deductible and lowering property tax rates. At the same time, it defined entertainment expenses as nondeductible, reduced the depreciation rates for some types of fixed assets and increased the tax on interest income.

Your Payroll Options in Greece

Remote Payroll

A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Greece. Under Greece Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.

Local Payroll Administration

In some cases, a company will register their business in Greece under one of the forms available: General/Limited Partnerships, EPE, AE or IKE but prefer to have another company administering its payroll.  This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll

Larger companies with a commitment to Greece may wish to run their own local payroll for all employees, foreign and local.  In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff.  There will be a need for in country human resources personnel who have the background needed to manage a Greek payroll, and can fulfil all tax, withholding, and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations.  The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Irish employment laws.

Fully Outsourced Payroll & Employment

Companies can outsource the employment and payroll of their staff in Greece to a GEO, like Shield GEO. This is possible for both foreign workers and Greece nationals. This is the easiest, fastest and safest way to payroll staff in Greece.

Shield GEO manages all aspects of payroll for workers in Greece, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.

Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.

Read more about outsourced payroll and employment through Shield GEO.

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Setting up payroll in Greece

Information Explanation
Currency ?

Euro

Corporate Income Tax Rate

26% on taxable profits

Sales Tax

VAT: 23%

Withholding Tax

Dividends 10%;

Interests 15%;

Royalties and other payments 20%.

Tax Figures

Information Explanation
Corporate Income Tax ?

26% on taxable profits

Income Tax Rate ?
Grossed income Tax Rate (%)
Up to € 25,000 22
Next € 17,000 32
Over 42

Liabilities for Greek income tax (and certain other taxes) depend on where you’re domiciled.

The domicile is normally the country regarded as permanent home and where a person lives most of the year. For example, a foreigner working in Greece for a Greek company who has taken up residence in Greece and has no income tax liability abroad, is considered to have his tax domicile in Greece.

The country of domicile is particularly important when it comes to inheritance tax. A person is considered to be a Greek resident and liable to Greek tax if any of the following apply:

– His/her permanent home, i.e. family or principal residence, is in Greece.

– He/she spend over 183 days in Greece during any calendar year.

– He/she is employed or carry out paid professional activities in Greece, except when secondary to business activities conducted in another country.

– His/her centre of vital economic interest, e.g. investments or business, is in Greece.

Sales Tax ?

VAT: 23%

Withholding Tax ?

Dividends 10%;

Interests 15%;

Royalties and other payments 20%.

Employee Social Security (EE SS)

15.5%, calculated on gross salaries

Employer Social Security (ER SS)

24.56% as of July 2014, calculated on gross salary

Greece

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