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Employment Norms in Gibraltar
Gibraltar, a British Overseas Territory located on the southern coast of Spain, is a thriving hub of business and commerce. Its economy is primarily based on financial services, tourism, and shipping. Whether you plan to employ in Gibraltar or simply consider a job offer, this guide will help you navigate the local employment landscape.
General Information:
- The Gibraltar currency is the Gibraltar pound (GIP).
- Gibraltar is a British Overseas Territory and has no official capital.
- English is the official language of Gibraltar, but Spanish is also widely spoken. Documentation can be in English or Spanish to be considered legally valid.
- As of 2022, the GDP per capita of Gibraltar is GBP 2589 million.
Labor laws in Gibraltar are based on the UK's employment laws. They cover areas such as working hours, leave, and discrimination.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements in Gibraltar
Gibraltar has various agreements related to labor and employment, both at the national and international levels. Below are some of the notable ones:
- 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 in Gibraltar
In Gibraltar, the onboarding process for employees typically involves the following:
- 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.
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Visa in Gibraltar
In Gibraltar, non-EEA nationals need a valid work permit or visa to work there. The following are the different types of visas and permits available:
- Work Permit - For non-EEA nationals who have been offered a job in Gibraltar and have an employment contract.
- Self-Employed Permit - For non-EEA nationals who want to start their own business or work as a self-employed individual in Gibraltar.
- Highly Skilled Migrant Program (HSMP) - For non-EEA nationals with specialized skills who have been offered a job in Gibraltar and meet certain salary requirements.
Minimum Wage in Gibraltar
The minimum wage in Gibraltar is GBP 8.10 per hour.
Payroll Cycle in Gibraltar
In Gibraltar, it is common practice for payroll to be processed monthly, typically paid at the end of each month.
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Annual Bonus in Gibraltar
There is no legal requirement for an annual bonus in Gibraltar. Still, it is a common practice for employers to provide discretionary bonuses to their employees based on individual or company performance.
Health Benefits in Gibraltar
In Gibraltar, no specific legislation mandates that employers provide health benefits to their employees. However, some employers may offer health benefits as part of their employment package. Common health benefits that employers in Gibraltar may provide include:
- Private health insurance
- Dental Insurance
- Vision insurance
- Life insurance
- Disability insurance
Working Hours and Overtime in Gibraltar
- 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.
Leaves in Gibraltar
Sick Leave
- Employees are entitled to full pay of 2 weeks and half pay of 4 weeks annually.
- Employees should have worked for at least three months to be eligible for paid sick leaves. They must also provide a medical certificate within three days of the illness.
Parental Leave
- Maternity leave is around 14 weeks in Gibraltar. Additional leaves of up to 29 weeks can be added after the birth if the employee has more than a year of continuous service.
- There is no paternal leave by law.
Annual Leaves
- Fifteen days of paid annual leaves for all employees.
- Extended leaves up to 25 for employees with more than eight years of service.
Public Holidays (for the Calendar year 2024)
These dates may change as per official government announcements.
- New Year's Day - 1st January
- Winter Midterm Bank Holiday - 19th February
- Good Friday - 29th March
- Easter Monday - 1st April
- Workers' Memorial Day - 27th April
- May Day - 1st May
- Special King's Coronation Bank Holiday - 8th May
- Spring Bank Holiday - 27th May
- King's Birthday - 17th June
- Late Summer Bank Holiday - 26th August
- Gibraltar National Day - 11th September
- Christmas Day - 25th December
- Boxing Day - 26th December
Public Holidays (for the Calendar year 2025)
These dates may change as per official government announcements.
- New Year's Day - 1st January
- Winter Midterm Bank Holiday - 17th February
- Good Friday - 19th April
- Easter Monday - 21st April
- Workers' Memorial Day - 26th April
- May Day - 1st May
- Special King's Coronation Bank Holiday - 8th May
- Spring Bank Holiday - 26th May
- King's Birthday - 16th June
- Late Summer Bank Holiday - 25th August
- Gibraltar National Day - 11th September
- Christmas Day - 25th December
- Boxing Day - 26th December
Taxes for Employers in Gibraltar
In Gibraltar, employers are required to pay social insurance contributions and payroll taxes to the Gibraltar Government.
- Social insurance contributions: Employers must pay social insurance contributions on behalf of their employees, which are based on a percentage of the employee's earnings. The employer's contribution rate is 20% of the employee's gross salary, and the employee's contribution rate is 10%.
- Corporation tax: The Gibraltar corporation tax rate is 12.5%.
- Exit tax: Under the provisions of the Gibraltar Income Tax Act 2010, a tax is levied on the difference between the market value of transferred assets that would have generated assessable income, and it is referred to as an exit tax, with a rate of 10%.
- Gaming duty: Holders of bookmakers, betting intermediaries, and gaming operators' licenses are subject to a gaming duty, which is calculated at a rate of 0.15% based on their gross profits.
- Capital duty: When share capital is initially authorized or subsequently increased, a capital duty of GBP 10 must be paid.
Taxes for Employees in Gibraltar
Various taxes paid by employees are:
- 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%
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Probation in Gibraltar
The first week of any employment is the probationary period and can be legally terminated at the end of the week.
Termination in Gibraltar
Under the Gibraltar law, an employee can be terminated in various situations, including:
- Termination with notice.
- Termination without notice: The employer can terminate the employment contract without notice if the employee engages in serious misconduct or breaches the contract terms.
- Termination during probation: The employer can terminate the employment contract during the probation period without notice and severance pay.
- Termination due to redundancy: The employer can terminate the employment contract due to redundancy or restructuring, provided they follow the proper procedures and provide reasonable notice and severance pay.
- Termination due to incapacity: The employer can terminate the employment contract if the employee cannot perform their job due to a medical condition or disability.
Severance Pay in Gibraltar
Fixed-term employees who are dismissed before the expiry of their contract are entitled to 50% of the sum that would have accrued during the unexpired period of the contract.
Employees or Contractors in Gibraltar
- 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
Overall, Gibraltar offers a range of employment opportunities across various industries, with a strong focus on finance, gaming, and tourism. The business environment in Gibraltar is highly competitive and regulated, with a robust legal framework in place to protect both employees and employers. With a highly skilled workforce and a favorable tax regime, Gibraltar is an attractive destination for businesses looking to establish a presence in the region.
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Social Security in Gibraltar