Do I Need a Local Entity to Hire in Slovakia?

In Slovakia, a "local entity" refers to a recognized business presence, such as a subsidiary or branch office, that can act as the employer. This setup allows you to manage local payroll, comply with tax obligations, and adhere to employment laws effectively.

Without establishing a local entity, you typically cannot perform essential employer functions like registering for taxes, managing payroll with required deductions, and issuing compliant employment contracts. An alternative is to use an Employer of Record (EOR), which can handle these responsibilities on your behalf.

What is Required to Employ Someone in Slovakia?

• Local employing entity required to directly employ? Yes (you need to register with the Commercial Register)
• Payroll registration required? Yes (mandatory registration with the Financial Administration of the Slovak Republic)
• Withholding/tax remittance required? Yes (employers must withhold income tax and social contributions)
• Social contributions required? Yes (employers are responsible for social security contributions)
• Local employment agreement required? Yes (written contracts are mandatory under Slovak law)
• Mandatory benefits to budget? Yes (includes annual leave, sick leave, and social security)
• Works council/collective agreements considerations? Often (many sectors have collective agreements that may apply)

Best Options If You're Hiring in Slovakia

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should be cautious about the nature of the relationship.

While hiring contractors doesn't require a local entity, Slovakia has strong protections for workers, and misclassification can lead to legal issues. It's essential to ensure that contractors operate independently and are not treated like employees.

• Ensure contractors have multiple clients to avoid exclusivity.
• Limit control over how they complete their work.
• Be wary if the contractor's role is integral to your business.

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

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Slovakia, depending on the type of entity and required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated €200–€600 per month ($220–$660)
• Payroll provider: Estimated €20–€50 per employee per month ($22–$55)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated €1,500–€3,000 per year ($1,650–$3,300)

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, typically around 35% of gross salary)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Slovakia

Hiring in Slovakia 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 Slovakia 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 managed 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.