Hiring Talent And Managing Payroll In Gibraltar

Agreements

• Employment Act 2013: This act regulates the minimum employment conditions of workers in Gibraltar, such as working hours, overtime pay, annual leave, and sick leave.
• Gibraltar Social Insurance Fund: Employers are required to contribute to the fund on behalf of their employees, which provides social insurance benefits such as pensions and sick pay.
• Gibraltar Trades Council: This umbrella organization represents various trade unions in Gibraltar and advocates for workers' rights and interests.
• European Union regulations: As a British Overseas Territory, Gibraltar is subject to various EU labor and employment regulations, which include equal treatment, health and safety, and working time directives.
• Bilateral social security agreements: Gibraltar has social security agreements with various countries, such as the UK and Spain, which ensure that employees who move between these countries do not lose their social security benefits.

Onboarding Process

• Employers must provide a written statement of terms and conditions of employment within eight weeks of an employee starting work.
• Employers may require employees to provide proof of identity, eligibility to work in Gibraltar and qualifications.
• Employers may conduct background checks and reference checks on potential employees.
• It is recommended that employers provide an induction process for new employees to introduce them to the company culture and their new role.

Minimum Wage

Payroll Cycle

Annual Bonus

Health Benefits

• Private health insurance
• Dental Insurance
• Vision insurance
• Life insurance
• Disability insurance

Working Hours and Overtime

• Work hours: In Gibraltar, the average working time over 17 weeks must not exceed 48 hours a week.
• Break: Employees are generally entitled to a 30-minute break after working for more than 6 hours.
• Overtime: Any work performed beyond the standard working hours is generally considered overtime, which must be compensated at a higher rate. The rate of compensation for overtime can vary depending on the employer and the terms of the employment contract.

Social Security

Taxes for Employees

• Social insurance contributions: The employee's contribution rate is 10% of their gross salary, and the employer's contribution rate is 20%.
• Income tax: Employees may also be required to pay income tax on their earnings, which is based on a progressive tax system. There are two systems to choose from

  • Allowance-based system:

    • First GBP 4,000 - 16%
    • Next GBP 12,000 - 19%
    • Remaining - 41%
  • Gross Income-Based system:

    • First GBP 10,000 - 8%
    • Next GBP 7,000 - 22%
    • Remaining - 30%
• Stamp duty: Payment of stamp duty is mandatory for transferring or selling either Gibraltar real estate or shares in a company that possesses Gibraltar real estate. It lies at around 0-3.5%

Termination

Severance Pay

Employees or Contractors

• In Gibraltar, the legislation does not clearly define the legal definitions of employees and contractors. Instead, the employment status is determined by a set of tests that examine the nature of the working relationship between the individual and the employer.
• In general, employees are considered to be individuals who work under an employment contract and are subject to the direction and control of their employer. Contractors are self-employed individuals who operate independently and have control over their work.
• Misclassifying an employee as a contractor or vice versa can have significant legal and financial implications for both the employer and the individual.
• Employers who misclassify an employee as a contractor can be liable for unpaid taxes, social security contributions, and other employment benefits. In contrast, individuals who are misclassified may miss out on employment protections, benefits, and legal rights.

Final Words