Global Payroll — 17 min
If you’re looking for the right location to hire remote workers, Greece is an excellent choice. Greece has an educated workforce that’s ready and able to work for foreign companies remotely. However, hiring and paying Greek workers takes some preparation.
Greece is part of the European Union (EU), which has its benefits and drawbacks. EU member countries are easier to do business with, but they also require foreign companies to navigate some bureaucracy to hire and pay workers properly. It’s easy to make costly legal mistakes if you don’t follow the correct procedures for beginning your employment of Greek workers.
Luckily, you don’t need to navigate the hiring process by yourself. In this article, you’ll learn the best way to hire Greek workers, how to pay them the right way, and all the financial details that will help you make better hiring and payment decisions.
Ready to learn more? Then let’s dive in.
Greece is a beautiful country that is still recovering from economic struggles. In 2015, the government defaulted on its debts, and the job market in the country is still working to reach previous levels.
The country also has a long history of valuing education. Higher education is free to Greek citizens, so more than half of the women and a third of the men in the country have at least one college degree. However, the educated people of Greece remain underemployed on the whole. Further, the country’s significant tourism industry has resulted in a population with a deep familiarity with English; more than half of the country speaks it.
When combined, these three factors make Greece a tempting talent market for foreign businesses. By choosing to hire a remote employee in Greece, you can connect with talented, educated workers who speak English and are ready to contribute right away.
The first and most important consideration you need to determine before hiring anyone in Greece is how you’ll pay them. Paying people overseas has several complications. You’ll need to navigate the bureaucracy of both Greece and the EU to pay your workers appropriately. As a result, there are three ways for foreign businesses to hire remote employees in Greece:
The most well-known method of paying Greek remote workers is also the most labor-intensive. If you want to pay your workers yourself, you must create a legal entity in Greece. This entity will act as a branch of your company in Greece, and you’ll manage all financial and tax concerns for your Greek employees through this entity.
If you want to hire an employee but don’t want to open an entire legal entity, you can work with an employer of record. These organizations have pre-existing legal entities in countries like Greece and will hire and pay your employees for you. Remote can act as your employer of record in Greece, allowing you to hire and pay great workers without opening new branches yourself.
If you don’t want to hire your Greek workers as full employees, you can pay them as contractors instead. When a worker is classified as a contractor, your company doesn’t need to pay them through a legal entity in Greece. Instead, you can send the funds through direct transfer tools like PayPal or more secure solutions like Remote Contractor Management.
Like all EU members, Greece uses the euro. As a result, most remote workers in Greece prefer to be paid in euros. While there may be ways to pay in other currencies, like the American dollar, it’s best to assume that you’ll need a way to convert your currency into euros before hiring a remote worker from Greece.
All of your Greek workers will be required to pay taxes in Greece, so it’s important to understand how Greek taxes work. Like the US, Greek tax brackets are progressive. The tax rate is applied to the amount of income within that bracket.
For example, if someone in Greece makes €25,000 per year, they pay 9% taxes on their first €10,000, 22% taxes on their second €10,000, and 28% on the last €5000. That leads to taxes of €900, €2200, and €1400, or €4500 overall. Employers are required to withhold Greek income tax on behalf of their employees, but not for contractors.
Not every part of an employee’s salary is taxable. Greece does offer some salary exemptions, but not many. This is in part a response to Greece’s recent financial struggles. The tax requirements in Greece will significantly impact how you choose to hire and pay Greek workers.
Greece doesn’t offer a tax bracket that’s exempt from taxes. This means that everyone who makes money in Greece is responsible for paying income taxes, as is every company that employs traditional employees. Bonuses and allowances from employers are also taxed in full.
Social security contributions are paid before income tax is calculated. As such, the amount of a Greek employee’s salary that goes toward social security is not taxed. Similarly, if they need to pay for medical expenses for their family, those funds are deducted from their taxes. Finally, the first 15% of mortgage and rent payments on employees’ first residences are deducted from their taxes.
A per diem payment is a daily allowance that companies grant their employees for different expenses. Many businesses offer per diem payments for business trips, but they can also cover other day-to-day costs. Some employers choose to pay their staff daily instead of monthly or weekly, and these payments are known as “per diems” as well.
In Greece, per diems are typically taxed in full. This is true whether a per diem refers to an employee paid daily or an allowance granted by an employer. However, per diem allowances are not subject to withholding and are reported by the employee on their personal taxes.
There’s a fundamental difference between allowances and reimbursements in Greece. An allowance is granted by a company in advance for their employees to use to purchase necessary services, items, and equipment. This is on top of the regular salary.
Meanwhile, a reimbursement describes when a company gives employees funds for things they need to buy for their jobs. This is not in addition to their regular salary. Essentially, the company buys these items for the employee by reimbursing them for the expenses.
Greece requires employers to make two significant mandatory payroll deductions on top of taxes: pensions and health insurance. These deductions go to one of the multiple “social insurance” foundations in the country. Different industries must submit these deducted funds to the foundation that’s responsible for their activities. The most common is IKA, also known as the Social Insurance Foundation.
IKA covers both pensions and health insurance. The tax rate for IKA is 15.5% for employees and 24.56% for employers.
In Greece, the minimum wage is €758.33 per calendar month. However, Greece operates on a 14-month calendar, so the actual minimum salary for these 14 pay periods is €650. Combined with the country’s working hours laws, this comes out to €4.23 per hour.
Greece follows the Western standard of a 40-hour workweek. In a five-day workweek, this leads to eight-hour days, and in a six-day workweek, a workday is six hours and 40 minutes. It must be made clear in the employment agreement whether a worker is on a five-day or six-day schedule. Employers can’t require workers to work more than 48 hours a week on average, more than three hours of overtime in a day, or more than 150 hours per year.
If a five-day employee works six days a week, the sixth day is paid at 130% of their regular rate. If an employee works more than the allotted hours in a day for their schedule, they are to receive overtime pay at 120% of their standard hourly rate for those extra hours. Similarly, if an employee works more than 45 hours a week on a five-day schedule or 48 hours a week on a six-day schedule, they receive 140% of their regular rate for those extra hours.
You can pay contractors with tools like Remote’s Contractor Management solutions or direct means like PayPal. You can pay contractors in multiple currencies, although most contractors in Greece prefer to be paid in euros.
If you choose to hire contractors rather than full employees in Greece, you need to be careful. Misclassifying an employee as a contractor can lead to significant legal problems. The Greek government could sue you for back taxes, as could your employee. You may even lose control of your intellectual property if your employee classification is questioned.
If you’ve hired someone as a contractor incorrectly, you may need to convert them to an employee to avoid penalties. You can learn more about the subject in our article, When should you convert a contractor to an employee?
In addition to other concerns, working with contractors may involve complications regarding your intellectual property. Be sure to understand the risks and include ownership of work performed in every contractor agreement.
If you choose to hire proper employees, you’ll need to do more work to pay them. The two options are opening your own legal entity or working with an employer of record.
Opening your own legal entity may be the sensible choice if you have specific plans to open a new office in Greece for the long term. You may also want to open an entity if you have more than a dozen employees in the country and intend to continue hiring indefinitely.
If you do not already own an entity in Greece, using a global employment partner to act as your employer of record (EOR) is safer, simpler, and easier to scale. An EOR lets you hire employees outside of your home country without having to manage the bureaucracy yourself. By going through an EOR, you can hire employees in the country quickly and then transfer the employees to your own entity (if you choose to open one) at a later date.
The EOR operates the legal entity in the country you want to hire from and technically hires the employee for you. However, in every other way, the employee works for you. The EOR simply manages financial and legal concerns like payment and taxation. Whether you’re considering hiring one person or many, an EOR will help you hire who you need, when and where you need them.
Whether you want to hire remote contractors or employees, Remote can help. Our employer of record services, contractor management portal, and local entity in Greece make it easy for companies of all sizes to begin employing workers in Greece right away.
You don’t need to manage payroll or take on the risks of employee misclassification yourself. Remote helps you hire your international workers with ease.
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