Benefits & Compensation in Greece

Employee benefits denote any tangible or intangible compensation an employer/organization provides to employees in addition to their normal salaries or wages. They assist companies with top talent attraction, employee engagement, and employee retention. Moreover, they can significantly boost employee work productivity. Depending on the employers’ budget and requirements, these benefits and compensation can be either monetary or non-monetary.

The employment contracts mention the mandatory benefits the employers offer to employees. These benefits include the statutory minimum wage, overtime compensation, paid leave, annual leave, maternity leave, paternity leave, sickness benefits, disability pension, severance fund, retirement benefits, and more.

Compensation Laws in Greece

Various compensation laws in Greece oversee employee benefits in the country, which are as follows:

1. Greek Law 3385/2005 on Working Time Arrangements

• It states that employers can schedule working time in various ways, subject to all the employees’ consent. 
• However, the employee can’t waive their minimum rights regarding working time.

2. Compensation for loss of job (employee)

• As per Greek law (Article 1, §1 of law 2112/20, as amended by Article 1 of law 4558/30), in the situation, the employer duly terminates unlimited employment contracts, the compensation is only to be funded from a minimum employment tenure of two months.
• The termination should be presented in writing and should be notified to O.A.E.D. in Greek.
• The dismissed employee must receive compensation for holidays that they haven’t taken.

How to Design an Employee Benefits Program for Employees in Greece?

It is imperative to consider a few vital considerations before designing a compensation package in Greece. They are as follows:

Step 1: Define your business goals and budget

Firstly, state the objectives you expect from the compensation structure in Greece.

Consider aspects like the company’s potential, business sector, and commercial climate before creating the benefits policy in Greece. You should inspect bargaining agreements or employment contracts to validate employment relationships and employee benefits entitlements. Furthermore, you must assess your company’s budget if you want to invest in employee benefits. 

Step 2: Infer employee requirements

You must infer the employees’ requirements and prospects by conducting use cases, interviews, or opinion polls. Consequently, it allows the employees to share their opinions flexibly.

Carefully research the existing industry standards and the benefits your competitors provide to their employees. Based on the research findings and internal survey, you can design a comprehensive compensation and benefits policy in Greece that meets industry principles.

The internal survey points out the areas that demand improvements and recommends vital changes you must implement in the compensation and benefits policy in Greece. You can exclude certain redundant benefits and control company expenses to optimize your benefits plan. 

Step 3: Create your benefits plan

Once you’ve discovered the employees’ requirements and expectations, you should perform a gap analysis to analyze the prevailing situation of the benefits plan. Make sure to create a flexible benefits plan that assimilates the dynamic nature of business and offers the best compensation and benefits in Greece. The flexible benefits plan’s structure allows employees to choose obligatory benefits easily. Moreover, it instructs the employer to gain maximum benefits from it.

You should incorporate the company’s budget, employee contributions, and outsourcing requisites while creating a benefits plan for employee benefits in Greece.

Step 4: Notify the benefits to the stakeholders, obtain feedback, and make necessary changes

This step involves notifying all the stakeholders and employees about the benefits plan’s advantages. Based on their feedback, you can implement a cost-effective plan for the employees and the organization.

If you recognize any valuable feedback, you can add them to your compensation policy in Greece. However, if the feedback identifies any benefit as superfluous, you can revise the plan for worker’s compensation in Greece.

Step 5: Assess the plan

Companies in Greece envision providing the optimum benefits to their employees to set themselves apart from competitors. Hence, you must routinely review the compensation policy in Greece. Also, it lets you identify the benefits plan’s sustainability and efficiency.

Check for any errors before activating the employee compensation structure in Greece. You should thoroughly assess all the benefit plan’s components and implement them subsequently.

Types of Guaranteed Benefits in Greece

Employers provide various types of employee benefits in Greece to their employees, which are as follows:

Minimum wage

• The minimum monthly wage in Greece is 831.83 EUR per month.

Overtime compensation

• The standard working hours in Greece are 40 hours per week, 8 hours per day.
• The maximum overtime limits are less than 3 hours per day and up to 150 hours a year.
• The worker’s compensation in Greece for overtime hours exceeding 40 hours a week and an extra hour per working day is 120.00% of the employee’s base salary rate for daytime hours.
• The compensation is at a rate of 125.00% of the employee’s basic wage for night-time work.

Paid leaves

• Employees get paid annual leave of 20-26 days (depending on their work experience).
• The below table shows the number of paid leaves provided to employees depending on their employment duration.

Public holidays

• Employees in Greece are entitled to 14 public holidays per year.

Sick leaves

• Employees should present a professional medical certificate 48 hours after the beginning of the sickness to get sick leave compensation.
• The following table indicates the number of sick leaves employees get based on their employment duration.

Maternity leaves

• Female employees in Greece get maternity leave of 119 calendar days.
• Female employees can avail of maternity leave benefits 56 days before the delivery date and 63 days after the child’s birth.
• The employer compensates the initial month of maternity leave at 100% of the employee’s standard wage.
• From the second month onwards, e-EFKA and the employer compensate the maternity pay at 50.00% of each employee’s standard wages. Moreover, they pay child benefits for every child.
• The non-insured female employees get a standard maternity benefit of 220.10 EUR.

Paternity leaves

• The employees are entitled to 14 days of paid paternity leave.

Parental leave

• Any parent who has served at least one year of employment is eligible for parental leave.
• The parental leave equals four months (either intermittently or constantly, as agreed upon with the employer) until the child’s age of 8.

Severance pay

• The severance pay depends on the employment contract with the company.
• The severance pay is twice if the employer provides no notice.
• According to Law 4093/2013, the severance pay scale relates to the duration of employment as follows:

Childcare leave

• Employees are entitled to childcare leave for 30 months after the birth/adoption of a child.
• It provides a reduction of 1 hour (paid) or 18 months of 2-hour reduction during the initial 12 months.

Health Insurance

• Employees who have served at least 50 days in the last 15 months for a particular company are entitled to healthcare insurance.
• They are also entitled to free healthcare and dental care under the social security system.

Employee Benefits for Expatriates

Most expats can easily get jobs in Greece due to an intra-company transfer. They only need to pay tax on their income derived from Greek sources. They are entitled to the same benefits as local employees. 

During their employment, expats get benefits like dental care, health care insurance, child homecare allowance, family allowance, travel allowance, meal allowance, and unemployment benefits.

Expats repeatedly move abroad to complete their transitory projects. So, businesses employ a simple, low-cost alternative to hiring and reimbursing expats through local subsidiaries.

The expats should first get a visa to enter Greece and apply for a work/residence permit once in Greece.

How are Employee Benefits Taxed in Greece?

In Greece, employees should pay income tax from 9% to 44% (based on income). The tax residents ought to pay for their worldwide income. Usually, non-residents only pay for their income obtained from Greece. Self-employed individuals must pay contributions for disability, pension, and general sickness.

Both employers and employees in Greece must make the below contributions from their monthly salary:

Restrictions for Greece Benefits and Compensation

Most benefits provided to employees in Greece are taxable. Therefore, you should understand the benefits’ financial worth to calculate the tax amount the employer owes correctly. Also, the employer should clear all tax payments and submit them to the corresponding authorities timely.

The EFKA (social security fund) monthly contributions are limited to EUR 6,500. These benefits’ duration is restricted to the number of days the insured employee has covered. Employees don’t get unemployment benefits if they don’t respond to vocational training or job offers after three attempts by the Labor Employment Office (OAED). 

Employees should provide oral or written notice of their resignation to the employer within four months before the termination of employment. Employees who resign are exempted from unemployment benefits by the OAED.

Ascertain that your business is settled in Greece and officially operates in the country before creating employee benefits plans. The benefits and compensation package in Greece must follow all the labor laws specified by the government. Moreover, the companies must also compensate the minimum remunerations to employees depending on their departments.

Supplemental Benefits for Employees in Greece

The following section mentions some of the extra benefits offered to employees in Greece.

13th-month pay

It is mandatory to pay a 13th-month salary in Greece during Easter, Christmas, and summer vacation.

List of other supplemental benefits:

• Pension fund
• Supplementary insurance
• Vacation leave
• Holiday bonus
• Easter bonus
• Christmas bonus

How Multiplier Can Help with Benefits Management in Greece

Establishing a business in a foreign country and recruiting a proficient workforce is time-consuming and laborious. The employer should conform to the local laws and regulations before framing employment contracts and determining employee benefits. You can effectively organize this process by contacting an international PEO platform like Multiplier.

Multiplier helps your business to easily conform to Greece’s labor rules. We also help you with contracting talented employees. Our expert staff can aid you in smoothly managing the workforce without setting up a subsidiary in the country. Thus, you can control your employment expenses and analyze new markets.