Our guide to Payroll on the Guernsey

Doing Business in Guernsey

Guernsey is recognised for its political stability, robust legal framework, and global reputation as a leading finance centre. Its tax-neutral environment and straightforward regulatory system make it particularly attractive for international structures and investment vehicles. With deep expertise in financial services and a highly skilled workforce, Guernsey supports long-term business success.

Guernsey offers an efficient business setup process, with company incorporation handled by the Guernsey Registry and flexible corporate structures available. Businesses are required to register with the Revenue Service and meet local regulatory requirements depending on their activities. Banking is well established, though account opening can involve thorough compliance checks. Working with local experts can help navigate regulatory and banking requirements effectively.

Employment Law

• Minimum Wage (as of Oct 2025):
• Adults (18+): £12.60/hour

• Young workers (16–17): £11.35/hour.

• Working Hours: No statutory limit; terms agreed in contracts. No legal overtime pay requirement.

• Leave:

• • • Annual leave is contractual (no statutory minimum).
    • Public holidays observed locally.
• Written Terms: Employers must provide a written statement of employment particulars within 4 weeks of start.

Taxation

• Income Tax: Standard rate is 20% on individual income after allowances.
• Corporate Tax: Most companies pay 0% corporate tax, except certain regulated sectors.
• Payroll Tax: Employers deduct tax via the Employees’ Tax Instalment (ETI) system
• Fiscal Year: For individuals, 1 January–31 December; companies can choose any year-end.

Social Security

• Employer Contributions:

• • 7.10% Social Security

• • • * Lower Earnings Limit: £832 per month (previously £797.33).

• • • Upper Earnings Limit: £16,380 per month (previously £15,717).

• Employee Contributions:

• • 7.50% Social Security

• Secondary Pension Scheme: Mandatory auto-enrolment phased in from 2024; by Oct 2025 all employers must contribute. Rates start at 1% each and will rise gradually until 2032.

• • 1.50% Employee

• • 1.00% Employer

Payroll

• Cycle: Typically monthly.
• ETI System: Employers deduct income tax based on coding notices issued by Revenue Service
• No statutory 13th-month salary requirement.
• *ETI, Social Security, and Secondary Pension contributions in Guernsey must be submitted to Revenue on a quarterly basis.

HR Development

• Employers should maintain:

• Written contracts and compliance with employment laws.
• Equal opportunities and anti-discrimination practices.
• Training programs (recommended for retention).

Employee Benefits

• Statutory benefits include:
• Social Security
• Pension contributions
• Secondary Pension Scheme
• Additional benefits (health insurance, bonuses) are contractual.

Visas & Work Permits

• Population Management Regime:
• Employment Permits required for non-residents.
• Categories: Short-Term (1 year), Medium-Term (5 years), Long-Term (8 years).
• Visa Process:
• Employer applies for Employment Permit first.
• Applicant then applies for visa via UK Visas & Immigration portal (specific to Guernsey)

• British/Irish citizens do not need visas or permits.

Key Changes in 2026?

Guernsey has implemented updates to the Common Reporting Standard (CRS 2.0), enhancing tax transparency and reporting obligations from 2026.

Regulatory expectations continue to evolve in line with international standards, particularly in financial services and investment structures.

Businesses operating in Guernsey should ensure systems and reporting processes are aligned with these enhanced compliance requirements.