Run your business seamlessly with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Gibraltar.
Ever heard of a road-turned-runway? Or maybe even a runway-turned-road? If you were wondering how that would work, Gibraltar will show you the way. The highway leading into Gibraltar closes down every time a plane lands as the road into town also acts as the runway for the airport. The quaint British Overseas Territory has various other interesting hidden gems, such as its dedicated and versatile workforce.
Do your organization’s expansion plans require you to hire employees in Gibraltar? Do you lack a physical entity in the country – a key requisite to hiring local talent? Neeyamo assists organizations worldwide with onboarding and managing employees in Gibraltar- processing payroll, managing local compliance requirements, benefits, and more.
Tools And Instances
Facts And Stats
Town of Gibraltar
01 July - 30 June
Country Calling Code
Moroccan, Arabic, Hindi, Italian
Handling payroll for a widespread workforce can pose as a major challenge for any firm. The added complication of compliance can make things worse and drastically effect the time and efforts that can be used in other equally important aspects of an organization's development. Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform, Neeyamo Payroll.
Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.
Social insurance (SI): SI is a compulsory contribution that is paid by both employers and employees. It is used to fund social security benefits, such as state pensions, healthcare, and unemployment benefits. The current SI contribution rates for 2023/24 are as follows
Employees: 10% of gross earnings (subject to a minimum of £13.00 per week and a maximum of £37.00 per week)
Gibraltar employee income tax rates for the 2023/2024 tax year are as follows:
Income bands and tax rates are set out below.
(a) Gross assessable income does not exceed £25,000
- First £10,000 - 7%
- £10,001–£17,000 - 21%
(b) Gross assessable income of above £25,000 but below £100,000
Net taxable income 2023/24
- First £17,000 - 17%
- £17,001–£25,000 - 20%
- £25,001–£40,000 - 26%
- £40,001–£105,000 - 29%
(c) Gross assessable income of £100,000 or more (Net taxable income 2023/24)
- First £17,000 - 18%
- £17,001–£25,000 - 21%
- £25,001–£40,000 - 27%
- £40,001–£105,000 - 30%
Employers in Gibraltar are required to calculate and withhold the correct amount of PAYE tax and social insurance contributions from an employee's income earned while performing work in Gibraltar.
Social insurance (SI): SI is a compulsory contribution that is paid by both employers and employees. It is used to fund social security benefits, such as state pensions, healthcare, and unemployment benefits. The current SI contribution rates for 2023/24 are as follows:
Social insurance contributions: Employers are required to pay social insurance contributions on behalf of their employees. The rate of social insurance contributions is 18% of employee earnings, subject to a minimum of £29 per week and a maximum of £51 per week.
The employer must calculate and withhold the correct amount of PAYE tax and social insurance contributions from an employee's income earned while performing work in Gibraltar.
The employer must use tax tables issued by the Income Tax Office to calculate and deduct tax from emoluments in accordance with the employee’s applicable code. The employer is then obligated to pay over to the Commissioner any tax deducted by the 15th day of the following month.
Undoubtedly, payroll is a critical process for any organization. Pay cycle in Spain refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.
The payroll frequency in Gibraltar is typically weekly or monthly. However, employers are free to choose any payroll frequency that is suitable for their business and employees, as long as they comply with the minimum wage requirements.
13th Month Cycle
There is no statutory requirement to pay the 13th or the 14th month salary.
An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a locally registered entity and a local bank account before making a job offer to an international hire.
An Employer of record (EOR) service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.
The EOR industry allows organizations to focus on collaborating with the employee in Spain for operational tasks, with the knowledge that they have a cost-effective solution to support their global payroll & HR requirements as they continue their global expansion.
HR Mandates and Practices
The minimum wage in Gibraltar in 2023 is £8.60 per hour. This is an increase of 6.2% from the previous minimum wage of £8.10 per hour.
The Working Time Act 1999 regulates working hours in Gibraltar. The Act states that the average working time for workers, including overtime, must not exceed 48 hours per week over a period of 17 weeks. However, workers may agree with their employers in writing to opt out of this maximum working time.
Workers who work overtime are entitled to be paid at a rate of not less than 1.5 times their normal rate of pay for the first two hours of overtime worked each day and not less than double their normal rate of pay for any overtime worked after that.
Data Retention Policy
There is no specific law in Gibraltar that limits the number of days that an employer can retain employee data.
Hiring and Onboarding Requirements
Employment Act 1932 and the Employment Regulations 1978. These laws set out the minimum standards that employers must comply with when hiring employees.
The key provisions of the hiring law in Gibraltar in 2023 are as follows:
- Discrimination: It is unlawful to discriminate against an applicant or employee on the basis of race, color, national or ethnic origin, sex, sexual orientation, marital status, age, disability, religion, or belief.
- Employers are required to pay employees a minimum wage. The minimum wage is set by the government.
- Employees are entitled to annual paid leave, sick leave, and other types of leave. Employment contracts: All employment contracts must be in writing and must set out the terms and conditions of employment, including the employee's salary, working hours, and leave entitlements.
- Termination of employment: Employees can be dismissed for a number of reasons, including misconduct, redundancy, and performance issues. However, employers must follow fair procedures when dismissing an employee.
Onboarding data for Gibraltar typically includes the following information:
- Date of birth
- Work permit
- National ID proof
- Qualifications Details
The first week of any employment is a probationary period and can be legally terminated at the end of the week.
There are 15 public holidays observed in Gibraltar:
- 1 January: New Year's Day
- 2 January: New Year's Day observed
- 20 February: Winter Midterm Bank Holiday
- 7 April: Good Friday
- 10 April: Easter Monday
- 28 April: Workers' Memorial Day
- 1 May: May Day
- 8 May: Special King's Coronation
- 29 May: Spring Bank Holiday
- 19 June: King's Birthday Holiday
- 28 August: Late Summer Bank Holiday
- 10 September: Gibraltar Day
- 11 September: Gibraltar Day observed
- 25 December: Christmas Day
- 26 December: Boxing Day
The Employment Act 1932 and the Employment Regulations 1978 set out the minimum statutory leave entitlements for employees in Gibraltar.
All employees in Gibraltar are entitled to at least 20 days of paid annual leave per year. Employees who have been employed for at least 8 years are entitled to 25 days of paid annual leave per year.
Pregnant employees in Gibraltar are entitled to at least 20 weeks of paid maternity leave, beginning 8 weeks before the expected date of birth and continuing for 12 weeks after the birth of the child.
Fathers in Gibraltar are entitled to 10 days of paid paternity leave for the birth of their child.
Employees in Gibraltar are also entitled to other types of leave, such as sick leave, compassionate leave, and bereavement leave.
Leave policies of individual employers:
In addition to the minimum statutory leave entitlements, many employers in Gibraltar offer additional leave benefits to their employees. For example, some employers may offer more annual leave days, paid sick leave for a longer period of time, or paid parental leave for both fathers and mothers.
If you are an employee in Gibraltar, you should contact your employer to learn more about your specific leave entitlements.
The employer must file a Notice of Termination with the Employment and Training Board within seven days of dismissal. Failure to do so is subject to a fine of GIP£750.
To avoid breach of contract claims, the employer must comply with any contractual obligations regarding termination.
A fair process must be conducted to avoid claims for unfair dismissal. Although not a statutory requirement, the Employment Tribunal will consider the process followed by the employer.
For example, in misconduct cases, the procedure should usually include the following steps:
Conducting a reasonable investigation. Informing the employee of the allegations against him or her. Holding a disciplinary hearing. Providing an opportunity to appeal.
After the first week, the notice period is governed by the length of service and the pay frequency as detailed below:
Paid monthly: minimum of one month's notice
Paid weekly or fortnightly: one week's notice
Monthly: minimum of one month for up to 8 years of service, two months for 8 to 10 years of service, and three months for 10+ years.
Weekly or fortnightly: minimum of one week for less than two years, two weeks for 2 to 5 years, four weeks for 5 to 8 years, eight weeks for 8 to 10 years, and 13 weeks for 10+ years.
Severance pay is as follows:-
- For each of the first five completed years, two weeks of pay
- For each of the next five completed years, three weeks of pay
- Each completed year thereafter, four weeks of pay
Under the Control of Employment Act, the government may control the employment of “non-entitled” workers by means of work permits.
An “entitled” worker is a worker who is one of the following:
A national of a country belonging to the European Economic Area (EEA) A non-EEA national who has been working in Gibraltar since before 1 July 1993.
A non-EEA national authorized to work in Gibraltar under the Immigration Control Act A “non-entitled worker” is a worker who is not an entitled worker.
EEA nationals may stay in Gibraltar for three months.
After this period, they are granted a renewable residence permit for five years if they have found suitable employment or established a business.
A work permit is granted to a non-entitled worker if no entitled workers are able and willing to take up the particular employment. Such individuals may be granted a residence permit on an annual basis, which is normally renewable only if the individual is still in possession of a work permit.
A non-EEA national may be refused permission to buy real estate in Gibraltar; such permission cannot be refused to residents of EEA countries.
Work permits for non-EU nationals are only issued after a (refundable) deposit is paid to the Employment Service to cover any repatriation costs and other costs that may be required.
A non-EEA national who wants to set up a business and reside in Gibraltar needs to register with the Income Tax Office as a self-employed person.
After the work permit is granted, the individual may apply to the Civil Status and Registration Office in Gibraltar for a residence permit.
An EEA national has the right to enter Gibraltar on the production of a valid passport or national identity card and remain for three months in order to seek employment or to establish himself or herself under any other qualifying category.
Other nationals require both work permits and residence permits.
Any individual not having a right to reside in Gibraltar may be refused admission (or, after admission, be required to leave) in the interests of public policy, security, or health.
Residence permits may be granted at the governor’s discretion to non-EEA nationals who do not have a work permit if the governor is satisfied that the applicants are of good character and that it is in the interest of Gibraltar that residency should be granted.
Non-EEA nationals who have obtained Category 2 individual tax status are likely to obtain residence permits on this basis.
At the governor’s discretion, citizens of the United Kingdom can be granted a certificate of permanent residence if they are of good character and if they are likely to be an asset to the community.
Employee Background Checks
Legal and Background Checks
There is no specific law in Gibraltar that regulates background checks for employees. However, employers in Gibraltar are required to comply with the Data Protection Act 2004, which sets out a number of principles that employers must follow when collecting, processing, and storing employee data.
Last updated on October 18, 2023
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