Greece

Registrations and Establishing an Entity

In order to process payroll in Greece, a company must have a legal entity set up. The estimated completion of this process will depend on the type of company (e.g. IKE, Ltd, A.E.) and it will take approximately two months to complete.

In order for a company to start processing payroll in Greece, a company will need a tax number (obtained from the tax authorities) and an AME number (obtained from the social contributions authorities). It is estimated that registering with the tax and social contributions authorities will take five working days.

No license is necessary before making any tax/social security fillings on behalf of a client. A proxy will be required; however, the client can provide the authorization for this.

Banking

Usually, banks are open Monday to Thursday 08:00 to 15:00 and 08:00 to 14:30 on Fridays.

It is not mandatory for employees to be paid via Greek bank account, it is however mandatory for the authorities (income tax and social contributions) to be paid via a Greek bank account.

Working Week

The working week in Greece is Monday to Friday, with the weekend being Saturday and Sunday.

Holiday Accrual / Calculations

Every employee is entitled to 20 days paid holidays in their first year of service, 21 days in the second year and 22 days in their third year.

If the employee completes 10 continuous working years with the same employer, they are entitled to 25 days paid holiday.

If the employee completes 25 continuous working years, they are entitled to 26 days paid holiday.

If the employee has a total of 12 or more working years’ experience, they are also entitled to 25 days paid holiday.

Maternity Leave

A mother to be has the right to 56 days of leave before the estimated date of the birth and 63 days of leave after it. The employer has to cover the salary as well as the insurance of the employee for the first 30 days of leave if the employee has completed one year of service in the company and 15 days of leave if the employee has not completed one year of service in the company. The rest of the days are covered by the Social Insurance Institution.

The mother also has the right to nine months leave after the end of the 63 days. During that time, her compensation and insurance are only covered by the state. A new mother cannot be laid off for at least 18 months after she has given birth. Furthermore, when she returns to her working duties, she has the right to a reduced shift.

Specifically, she can work an hour less each day for two and a half years or - if the employer agrees - she could work two hours less a day for a year and an hour less for half a year.

Paternity Leave

When the baby is born, the father is entitled to take 14 working days off.

Sickness

In case of an absence because of illness, the employee has to visit a doctor approved by the Social Insurance Institute so that a formal document can be issued stating the days the employee requires to recover. The employer covers half the amount of the salary and the insurance of the first three days of recovery. For any additional day, the employee will get a portion of their salary from the Social Insurance Institution and the remaining from their employer.

National Service

Greek males between the ages of 19 and 45 are required by Greek law to perform military service for at least nine months. This applies to any individual whom the Greek authorities consider to be Greek, regardless of whether or not the individual considers himself Greek, has a foreign citizenship and passport, or was born or lives outside of Greece.

Employers are not required to pay the employee whilst they undertake national service.

Tax & Social Security

The tax year in Greece runs from 1 January to 31 December each year.

Income Tax

The employer is responsible for contributing to Solidarity Tax, Income Tax and Social Security Contributions (IKA).

An individual is subject to income tax on his/her total net income in Greece and abroad. Net income that is sourced in Greece is taxed irrespective of the place of residence of the individual. Income arising abroad is taxed if the individual is a resident of Greece. For income tax purposes, the income derived by individuals is divided into certain categories. Taxable income is calculated based on the rules of each category and the total taxable income of the individual is the aggregate of the categories.

Employment and Pension Income

Income tax contributions must be made by the end of each month.

The penalty for late submission/payments is 10% of the total amount payable.

Every second month, the employer is obligated to pay the amount of taxes withheld from the employees’ salaries until that time by submitting the appropriate statement. Furthermore, the employer has to submit an annual statement with the total financial data of the year.

Social Security

All salaries are subject to social insurance deductions. There are a number of different social insurance foundations. Each foundation is responsible for a different working specialty.

IKA – Contributions

All percentages are calculated on the gross salary with a pre-set limit of deductions.

The employer is obliged to remit contributions by the end of the following month. Late payment incurs a 3% surcharge in the first month and 1% per additional month.
Quarterly reporting of employee data is mandatory. Fines are 10% for the first month and 30% for each following month.

Payroll

It is legally acceptable to provide employees with online payslips in Greece.

Reports

Payroll reports must be kept for at least 10 years.

Reporting

Monthly

At the end of each month, there are a number of documents that must be submitted to the authorities. These include; APD file (IKA file) (Social contributions), income tax declaration and any extra contribution file. Submissions can be made online, or if they are last minute, they must be done in person.

Yearly

The annual Company Income Tax Statement must be submitted via the relevant internet service each year. The deadline varies each year. Employee’s annual statements will include the annual gross and net income of the employees and any withheld tax and social security amounts. The annual statements are generated and provided by 31 March of the following financial year.

Payslip example 

New Employees

All new employees must be registered with the Tax Office and IKA. They must obtain an AMKA (Social Security Number) in person. New starts must be registered before the date of recruitment otherwise, there will be fines.

For any expat new starts, the following documentation is required:

• ID card/passport
• Completion of form M1 and M7
• Utility bill
• Employer confirmation for his/her recruitment
• AMKA confirmation
• A copy of the employee’s Greek bank account details

Again, the information regarding expat employees must be submitted before their recruitment date otherwise fines will be applicable.

In order to work in Greece, each employee must have a VAT number. If employees do not have one, they must obtain one from the Greek authorities.

Leavers

When there is a leaver, a termination form must be submitted to the local authorities no later than eighty-four days after the employee’s termination.

If the leaver has been terminated, then payment should be on their last day. If the leaver has resigned, payment will depend on the deadline for each allowance.

Expenses

The taxable income in Greece will be established by deducting the following expenses; Social Security Contributions, interest paid for buying a house for the first time and medical care expenses where applicable.

EU National

All EU nationals must apply for a “Registration Certificate” once they have spent three months in Greece. The Registration Certificate replaces the “Residence Permit” and is obligatory. The new certificate is open dated and will not need to be renewed.

Documents required for a working person applying for a registration certificate:

• The passport used when the applicant entered Greece
• A statement by the applicant’s duly certified by the local Labour Inspectorate, or a statutory declaration (Ypefthini Dilosi) in Greek specifying the nature and duration of the work to be done by the applicant and confirming local health cover

Documents required for the worker’s family:

• The passport used when the applicants entered Greece
• A document issued by the appropriate authority of the country of origin showing their relationship, e.g., marriage/birth certificates translated into Greek, or a statutory declaration (Ypefthini Dilosi) in Greek confirming the relationship

Permanent Residence Certificate

Optional, available to EU nationals who are married to a Greek citizen or have made Greece their permanent home. Must prove over 5 years of continuous residence.

Applications are submitted at the local Aliens Police or police station closest to residence.

Non-EU Citizens

Must obtain an entry visa before arriving in Greece. This is typically obtained at the Greek Embassy or Consulate in the applicant’s home country.

Documents required include:

• A valid passport
• Employment contract
• Proof of adequate medical insurance
• Criminal background check

Residence/Work Permit (after arrival):

Within 30 days of arrival, application must be made at the local municipal office or police station. Validity ranges from one to five years depending on circumstances.

Before applying:

• Obtain a tax number
• Obtain AMKA (social security number)

Applications must be in Greek, either submitted personally or by a certified lawyer with power of attorney.

Documents for residence permit:

• Visa
• Passport + copies
• Two passport photos
• Certificate of medical insurance
• Health certificate from a state hospital
• Proof of local address (rental or deed)
• Proof of income or employment
• Payment receipt to the national tax office (Eforia)

A "bebaiosi" (blue form) will be issued upon submission, allowing the applicant to begin working while the application is processed.

Further Information 

For more information, or assistance with Greece tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview 

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.