Employers in Gibraltar are required to follow a set of rules for calculating the due amount of tax for their employees, as well as making the needed social security payments. Payroll in Gibraltar is not in place as a separate tax, however, employers follow the Pay-As-You-Earn system (PAYE).
Our company formation agents in Gibraltar can assist business owners who wish to understand their payroll obligations. The registration of employees is also one of the post-incorporation steps our company can provide assistance with.
Table of Contents
The employer’s contributions to payroll in Gibraltar
Employers in Gibraltar are asked to observe two main requirements concerning payroll:
- Calculate the tax that will be deducted from the wages they offer to their employees and make the needed payments;
- Pay the social insurance due for their employees to the Income Tax Office (which is a monthly or a weekly payment in some cases).
Payroll in Gibraltar is not in place as a tax per se, what employers need to keep in mind is that they need to withhold the tax under PAYE, as well as make the social insurance contributions.
In summary, the employer will need to register with:
- The employment service: the Government department in charge of implementing the labour laws;
- The income tax office: the local tax authority, in charge of tax-related matters.
The company that registers with the Department of Employment will need to pay a registration fee, which is renewable on a yearly basis. Any changes of the business particulars shall be duly notified to the Department of Employment.
The value of social security contributions is the following:
- Maximum of GBP 50.50 for weekly contributions or a maximum of GBP 218.83 for monthly contributions in the case of the employer;
- Starting with July 1st, 2023, the employer’s weekly contributions will increase to a maximum of GBP 51.00, and the monthly ones will have a maximum value of GBP 221.00;
- Employees are also subject to contributing their own percentage of contributions, and this value will also increase starting with July 2023, to a maximum of GBP 37.00 for weekly contributions and GBP 160.33 for monthly contributions.
Please keep in mind that these fees can be updated each year (as seen above, the values are set to change for the second part of the year). We recommend reaching out to our team for updated information.
Our accountants in Gibraltar provide complete services for locally-registered companies, as well as foreign companies with a permanent establishment in Gibraltar. Our solutions include but are not limited to, meeting the obligations that can be considered to fall under the general category of payroll in Gibraltar, such as calculating the right among of PAYE and making the mandatory submissions.
All companies are required to follow clear rules for lawfully hiring employees, as well as for terminating such an employment agreement. Company owners who have questions about the employment agreements, as well as the ongoing obligations can address our team.
Other tax obligations for companies
Gibraltar has a low-tax regime, meaning that companies are not subject to a high number of taxes. Nonetheless, businesses will need to follow the corporate taxation rules, as well as the ones for tax payments and filing. Our team briefly lists the applicable taxes, as well as the tax exemptions:
- Corporate income tax: at the standard value of 12.5%; the same tax applies to branches;
- Withholding tax: there are no such taxes on dividends, interest, royalties, or technical service fees; there is no branch remittance tax;
- Value-added tax: there is no value-added tax in Gibraltar.
For more information about company tax compliance (including, but not limited to payroll in Gibraltar), as well as for details regarding the employer’s duties and obligations when hiring employees in Gibraltar, please contact our team.
We also provide other services to companies, including those for setting up a virtual office in Gibraltar.