Do I Need a Local Entity to Hire in Guernsey?

In Guernsey, a "local entity" refers to a business structure that allows you to operate as an employer within the jurisdiction. This typically means establishing a subsidiary or a branch office. Without a local entity, your company cannot legally hire employees directly, manage payroll, or fulfill local employment obligations. However, you can consider using an Employer of Record (EOR) as an alternative to navigate these requirements.

Without a local employing setup, you won't be able to register as an employer, handle mandatory social security processes, or issue compliant employment contracts. Guernsey's Social Security Authority outlines employer responsibilities for contributions, which are essential for lawful employment.

What is Required to Employ Someone in Guernsey?

• Local employing entity required to directly employ? Yes (a local entity is necessary for direct employment)
• Payroll registration required? Yes (you must register with the Guernsey Social Security Authority)
• Withholding/tax remittance required? Yes (employers must withhold income tax and social security contributions)
• Social contributions required? Yes (mandatory contributions to the Social Security Fund are required)
• Local employment agreement required? Yes (written contracts are standard practice in Guernsey)
• Mandatory benefits to budget? Yes (statutory sick pay, maternity leave, and pensions)
• Works council/collective agreements considerations? Not applicable (Guernsey does not have mandatory works councils)

Best Options If You're Hiring in Guernsey

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should be cautious about how the relationship is structured.

Hiring contractors in Guernsey allows you to bypass the need for a local entity, but you must ensure that the contractor is genuinely independent. Misclassification can lead to legal issues if the contractor is deemed to be functioning as an employee. To mitigate this risk, consider the following:

• Ensure the contractor has multiple clients and is not solely working for your company.
• Define clear project scopes and avoid controlling their work hours or methods.
• Document the contractor's independence through a well-structured contract.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 6–8 weeks to establish an entity in Guernsey, depending on the type of entity and registration requirements.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated £300–£600 per month ($375–$750)
• Payroll provider: Estimated £20–£50 per employee per month ($25–$62)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated £1,000–£2,500 per year ($1,250–$3,125)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Guernsey

Hiring in Guernsey can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Guernsey quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.