Payroll and Employment Taxes in Greece

Overview of Payroll Taxes in Greece

Understanding payroll taxes in Greece is essential for businesses of all sizes to ensure compliance with local tax laws and maintain smooth operations. Employers need to manage various taxes, such as income tax withholding, social security contributions, and other levies, which are key to employee compensation and government funding. Non-compliance can lead to penalties and strained employee relations, making it crucial for employers to understand calculations, deadlines, and filing procedures. Tax laws may vary depending on location, income levels, and business size.

Fiscal Year in Greece

1 January - 31 December is the 12-month accounting period that businesses in Greece use for financial and tax reporting purposes.

Payroll Cycle in Greece

The payroll cycle in Greece is usually monthly, with employees being paid on the last working day of the month.

Bonus Payments in Greece

Greek law mandates private sector employees to receive two extra monthly salaries, distributed as Christmas (one month's salary), Easter (half a month's salary), and Vacation Bonus (half a month's salary). If Christmas bonuses are delayed, employees can file complaints with labour inspectorates, potentially resulting in fines.

Types of Payroll Taxes in Greece

Employers in Greece must adhere to various types of payroll taxes, each governed by specific regulations. Below are the main categories:

Income Tax Withholding

Employers must withhold income tax from employees' salaries based on progressive tax rates. As of 2025, the rates are:

• 9% for income up to €10,000
 
• 22% for income between €10,001 and €20,000
 
• 28% for income between €20,001 and €30,000
 
• 36% for income between €30,001 and €40,000
 
• 44% for income over €40,001

Employers must calculate the correct amount, withhold it from employee salaries, and remit it to tax authorities. Non-compliance can result in penalties.

Social Security Contributions

Both employers and employees must contribute to Greece's social security system, covering pensions, healthcare, and other benefits. Contribution rates as of 2025 are:

Employer Contributions:

• Pension Fund: 13.33%
• Supplementary Pension: 3.00% (applied on salary up to €7,373.53 monthly)
• Health Insurance: 4.30% (applied on salary up to €7,373.53 monthly)
• Supplementary Health Insurance: 0.25% (applied on salary up to €7,373.53 monthly)
• Unemployment (Additional Contributions): 1.41% (applied on salary up to €7,373.53 monthly)
• EFKA Summer Campsite Programs: €20 annually

Total Employer Contributions: 21.79% + €20/year

Employee Contributions:

• Pension Fund: 6.67% (applied on salary up to €7,572.62 monthly)
• Health Care: 2.15% (applied on salary up to €7,572.62 monthly)
• Health in Benefit: 0.40% (applied on salary up to €7,572.62 monthly)
• Supplementary Insurance: 3.25% (applied on salary up to €7,572.62 monthly)
• Unemployment: 1.20% (applied on salary up to €7,572.62 monthly)

Total Employee Contributions: 13.37%

Employers are responsible for deducting employee contributions and submitting both portions to the relevant authorities.

Other Levies

Additional levies may apply, depending on industry-specific obligations or supplementary pension fund requirements. Employers should stay updated on relevant regulations to ensure full compliance.

How To Set Up Payroll in Greece

Setting up payroll correctly is crucial for compliance with legal requirements and maintaining employee trust. Employers must register with the local tax office and social security institution (EFKA) and maintain accurate records.

Example Calculation

Here’s an example for an employee earning €2,000 monthly:

• Pension Fund (6.67%): €2,000 × 6.67% = €133.40
• Health Care (2.15%): €2,000 × 2.15% = €43.00
• Health in Benefit (0.40%): €2,000 × 0.40% = €8.00
• Supplementary Insurance (3.25%): €2,000 × 3.25% = €65.00
• Unemployment (1.20%): €2,000 × 1.20% = €24.00

Total Employee Contributions = €273.40

Employer Contributions:

For a monthly salary of €2,000:

• Pension Fund (13.33%): €2,000 × 13.33% = €266.60
• Supplementary Pension (3.00%): €2,000 × 3.00% = €60.00
• Health Insurance (4.30%): €2,000 × 4.30% = €86.00
• Supplementary Health Insurance (0.25%): €2,000 × 0.25% = €5.00
• Additional Contributions – Unemployment (1.41%): €2,000 × 1.41% = €28.20

Total Employer Contributions = €445.80

Submitting Payroll Tax in Greece

Employers can submit payroll taxes using the following methods:

• Online Portal: Use the Independent Authority for Public Revenue's (AADE) system.
 
• Bank Transfer: Make payments directly to designated accounts.
 
• Authorized Agents: Employ certified payroll service providers.

Payroll Tax Due Dates in Greece

Payroll Contributions in Greece

Understanding the tax obligations for both employers and employees is crucial when operating in Greece's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Greece.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 21.79% on top of the employee salary in Greece.

Employee Payroll Tax Contributions

In Greece, the typical estimation for employee payroll contributions cost is around 13.37%.

Individual Income Tax Contributions

Income tax in Greece follows a progressive rate structure, where factors such as household status and the number of children can influence the overall tax rates.

Pension in Greece

In Greece, individuals must reach a minimum age of 62 and accumulate 40 years of insurance contributions to the Greek Social Security system to qualify for the complete retirement pension. This pension is disbursed monthly.

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Managing Common Payroll Challenges in Greece

‍Global employers operating in Greece often encounter unique payroll challenges that can affect compliance and efficiency, like navigating evolving tax laws and managing employee data. With a need for real-time accuracy, modern organizations must develop strategies to overcome these challenges effectively. Below, we explore some of the most common payroll hurdles and provide actionable solutions to streamline payroll processes in Greece.

Maintaining Accurate and Detailed Payroll Reports

Maintaining accurate global payroll reports is often challenging due to currency exchange complexities, data integration issues, and the need to keep employee information up-to-date – including tax information, hours worked, leave balances, and any changes in salary or job status. Generating accurate reports is easy with a comprehensive payroll automation tool that consolidates fragmented data sources, and can keep track of employee payments and deductions.

Keeping Up With Ever-Changing Tax Laws & Compliance Laws

In Greece, tax laws and compliance regulations can change frequently, presenting a significant challenge for global employers. Monitoring updates to federal, state, and local tax codes is crucial to avoid non-compliance and costly penalties, but requires significant time and resources. Partnering with local experts or a reputable global HR platform is an effective way to maintain compliance. These services can help employers stay compliant with evolving regulations while freeing up time for more strategic work.

Consolidating Multi-Vendor Payroll Analytics

Managing payroll across multiple vendors often leads to fragmented data and inefficiencies, making it difficult to consolidate analytics. These challenges can hinder decision-making, especially when trying to gain a clear view of workforce costs and trends. To address this, organizations can invest in a centralized payroll management system that unifies data from multiple vendors. A consolidated platform simplifies payroll tracking, ensures data accuracy, and provides actionable insights into payroll expenditures.

Integrating Multiple HR & Payroll Systems

Global companies are prone to using multiple HR or payroll systems across regions, which can easily lead to fragmented payroll data, increasing the risk of delays and errors in employee compensation. To combat this, seamless integration between payroll and other systems is critical.

Payroll management systems that connect with existing HR and financial platforms can help streamline workflows by reducing manual inputs and ensuring that all departments operate with up-to-date, accurate information. In turn, this helps guarantee on-time, accurate payroll, boosting employee satisfaction.

What Does a Global Payroll Management Platform Cover?

A global payroll management platform is a software solution designed to streamline and automate the payroll processes for organizations with employees across multiple countries. It helps ensure accurate and timely payment while maintaining compliance with legal and regulatory requirements in Greece.

Key functions of a payroll management platform can include:

• Consolidate payroll data: Streamline fragmented payroll data into one source of truth when you’re operating in multiple regions.
• Analytics and reporting: Advanced capabilities to analyze payroll data and generate automated reports per region.
• Monitor and standardize payroll: Get an accurate view of employee costs, bonuses, and taxes per region, catch variances, and standardize payroll processes across regions to minimize errors.
• Compliance and record-keeping: Maintains accurate payroll records and ensures adherence to labor laws and regulations, reducing the risk of legal issues.
• Employee self-service: Provides portals where employees can access pay stubs, update personal information, and manage benefits selections.

How Playroll Can Streamline Payroll & Taxes in Greece

Expanding globally is an exciting milestone for any company, but it comes coupled with complex payroll challenges. It doesn’t have to be complicated. At Playroll, our easy-to-implement global payroll management software combines automation with hands-on support to make global payroll truly simple. Here's how Playroll helps:

• Multi-Vendor Integration: Our platform syncs seamlessly with your providers and in-house systems to unify global payroll services in one platform.
• Standardize Payroll Processes: Unify your operations in one dashboard to ensure payroll is running smoothly globally, with advanced approval flows and reports.
• Improve Governance & Compliance: Improve compliance by centralizing all your compliance tasks and processes. Easily track your payment obligations, with digitized audit trails.
• Advanced Reporting: Access and configure your data, your way, with a comprehensive suite of payroll analytics and reporting tools.