Employer of Record in Gibraltar

Expanding your business to Gibraltar offers access to a vibrant market and skilled workforce. However, hiring employees in a new jurisdiction requires navigating local employment laws, tax regulations, and social security contributions. Companies typically have a few primary options for engaging talent in Gibraltar, each with its own set of complexities and advantages.

You can hire employees in Gibraltar through several avenues, depending on your business goals and resource availability:

• Establishing a Local Entity: This involves setting up a subsidiary or branch office in Gibraltar, which requires significant time, legal expertise, and financial investment to handle registration, local compliance, payroll, and HR functions.
• Utilizing an Employer of Record (EOR): Partnering with an Employer of Record like Rivermate allows you to hire employees in Gibraltar quickly and compliantly without establishing your own legal entity. The EOR acts as the legal employer, managing all local employment responsibilities.
• Hiring Independent Contractors: While seemingly straightforward, engaging individuals as independent contractors in Gibraltar requires careful consideration to avoid misclassification risks. This path bypasses direct employment obligations but mandates strict adherence to contractor agreements and local tax regulations for independent professionals.

How an EOR Works in Gibraltar

An Employer of Record (EOR) service simplifies international expansion by handling the intricate details of local employment. In Gibraltar, an EOR serves as the legal employer for your workforce, taking on critical responsibilities:

• Payroll Processing: Managing timely and accurate salary payments in compliance with Gibraltar's regulations.
• Tax Withholding and Remittance: Ensuring correct PAYE (Pay As You Earn) income tax and social security contributions are calculated, withheld, and paid to the relevant authorities.
• Employment Contract Management: Drafting and maintaining compliant employment agreements that adhere to Gibraltar's labor laws, including terms for working hours, holidays, and termination.
• Benefits Administration: Facilitating the administration of employee benefits, such as pensions and health insurance, according to local standards.
• HR Compliance: Navigating local labor laws, health and safety regulations, and statutory leave policies to ensure full compliance.

Benefits of Using an EOR in Gibraltar

For companies looking to tap into Gibraltar's talent pool without the overhead of establishing a local entity, an EOR offers compelling advantages:

• Rapid Market Entry: Hire employees in Gibraltar in a matter of days or weeks, rather than the months typically required to set up a new legal entity.
• Guaranteed Compliance: Mitigate risks associated with complex local labor laws, payroll, and tax regulations, ensuring your operations remain fully compliant.
• Reduced Administrative Burden: Outsource the complexities of HR, payroll, and legal compliance, freeing up your internal resources to focus on core business activities.
• Cost Efficiency: Avoid the significant expenses and ongoing maintenance costs associated with establishing and running a local subsidiary.
• Flexibility and Scalability: Easily scale your team up or down in Gibraltar without the need to manage intricate legal processes for each adjustment.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Gibraltar includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Gibraltar.

Employers in Gibraltar must contribute 20% of employees' gross wages to social insurance, with no contributions on the first £129.83 weekly and a cap of £98.80 per week. Small businesses may benefit from reduced rates. Gibraltar has no payroll tax beyond social insurance obligations. Employers are responsible for withholding income tax via the PAYE system, using tax codes and tables provided by the Income Tax Office, and remitting these deductions monthly along with submitting regular reports.

Employees benefit from allowances such as a personal allowance (£4,255 for 2024/2025), married allowance (£8,510), and deductions for dependents, medical insurance, pension contributions, mortgage interest, and education expenses. Employers must file monthly PAYE returns and an annual reconciliation, with individual tax returns due by November 30th. Penalties apply for non-compliance.

Foreign workers and companies face specific rules, including residency thresholds (over 183 days), double taxation treaties, and a standard corporate tax rate of 12.5%. Proper tax planning and professional advice are recommended for expatriates and foreign entities operating in Gibraltar.

Gibraltar's salary landscape varies by industry, with financial services and online gaming offering the highest pay. Typical annual salaries range from £22,000 for customer service agents to £85,000 for project managers, reflecting skill demand and experience levels. Employers must adhere to a statutory minimum wage of £8.50 per hour in 2025, with regular updates based on economic conditions.

Compensation packages often include bonuses such as performance, sign-on, and retention incentives, along with allowances for housing, transportation, and health insurance. The standard payroll cycle is monthly, with salaries paid primarily via direct bank transfer, and employees must receive payslips detailing earnings and deductions. Salary growth is expected to continue moderately in 2025, driven by high demand for skilled professionals and rising living costs, with a trend toward enhanced employee benefits and flexible work arrangements.

Employees in Gibraltar are entitled to various leave types, with statutory minimums outlined in the Employment Act. For annual leave, employees working a 5-day week receive at least 20 paid days, while those working 6 days get 24 days. Public holidays in 2025 include New Year's Day, Good Friday, Queen's Birthday, Gibraltar National Day, Christmas, and Boxing Day, with observance shifting if falling on weekends.

Sick leave requires a medical certificate, with statutory sick pay (SSP) applicable after a qualifying period. Parental leave includes 14 weeks of maternity leave, 1 week of paternity leave, and adoption leave with similar conditions to maternity. Additional leave types such as bereavement, study, sabbatical, and special leave are available depending on employment policies.

Employees in Gibraltar are entitled to mandatory benefits including at least four weeks of paid annual leave, public holiday pay, statutory sick leave, maternity and paternity leave, and contributions to the social insurance scheme, which covers unemployment, sickness, and retirement benefits.

Many employers also offer optional benefits such as private health and life insurance, disability coverage, retirement savings plans, wellness programs, flexible working arrangements, and training opportunities to attract and retain talent. Private health insurance is common, providing faster access to medical services, with costs shared or fully covered by employers, and is generally tax-free for employees.

Retirement plans are often supplementary to the state pension, with occupational schemes, defined contribution, or benefit plans, sometimes auto-enrolled, offering tax advantages. Benefits packages vary by industry, with larger firms and sectors like finance and gaming typically providing more comprehensive offerings.

Employment agreements in Gibraltar are essential for defining the rights and obligations of both employers and employees, ensuring legal compliance and reducing disputes. They typically cover job responsibilities, compensation, working hours, and termination procedures. Employers must adhere to Gibraltar’s employment laws, which include mandatory clauses related to probation periods, confidentiality, non-compete agreements, contract modifications, and termination.

Gibraltar recognizes several contract types tailored to different employment needs:

Compliance with these contract types and their specific clauses is vital for maintaining a legally sound employment environment in Gibraltar.

Gibraltar's remote work landscape is expanding, driven by technological progress and employee demand for better work-life balance. Although no specific remote work legislation exists, existing employment laws, such as the Employment Act 2005, apply equally to remote workers, emphasizing employer responsibilities like health and safety, data protection, and providing necessary equipment. Employers must ensure remote employees receive fair treatment and have access to the same rights and benefits as office-based staff.

Flexible work options are increasingly adopted, including working from home, which involves employees performing duties outside traditional office settings. Key considerations for employers include conducting remote workspace risk assessments, ensuring data security under the Data Protection Act 2004, and facilitating equipment provision. The regulatory environment encourages negotiation of flexible arrangements without formal legal entitlements, emphasizing the importance of fair employer practices.

In Gibraltar, employment termination must comply with specific legal requirements, including notice periods, severance pay, and procedural fairness. Notice periods vary based on service length, ranging from no notice for less than 4 weeks to 8 weeks for employees with 7 or more years. Employers should always follow contractual or statutory notice obligations.

Severance pay is due to employees with at least 2 years of continuous service, calculated as one week's pay per year of employment, capped by law. It is payable upon redundancy, but not if the employee is dismissed for gross misconduct or resigns voluntarily.

Terminations can be with or without cause. Gross misconduct allows summary dismissal without notice or severance, provided there is clear evidence. Otherwise, employers must provide proper notice and severance when dismissing without cause. Procedural steps include documentation, investigation, written notification, consultation (for redundancy), and ensuring final payments. Employees are protected against wrongful dismissal based on discrimination, procedural flaws, or unfair reasons, with claims handled by the Employment Tribunal.

Gibraltar provides a favorable environment for independent contractors, appealing to both local and international businesses seeking specialized skills and project-based work. Proper classification of workers as either employees or independent contractors is critical to avoid legal and financial repercussions. Key factors for classification include control, integration, mutuality of obligation, right of substitution, provision of equipment, financial risk, and exclusivity. Contracts should clearly define the scope of work, payment terms, and other critical elements to ensure compliance and clarity.

Intellectual property rights in Gibraltar typically belong to the creator unless a contract specifies otherwise, making it essential for agreements to include clauses that assign IP rights to the client. Independent contractors must register as self-employed, manage their own tax obligations, and consider obtaining insurance like professional indemnity and public liability. Common industries engaging contractors include financial services, gaming, IT, legal services, marketing, and construction, leveraging the flexibility and expertise contractors offer.

Gibraltar's immigration system requires most foreign nationals to obtain a visa and work permit, primarily through the Gainful Occupation Permit (GOP), which is issued after a labor market test confirming no suitable local candidate is available. Key visa categories include the GOP for employed foreigners, Self-Employment Visa for entrepreneurs, and the Category 2 Resident Visa for high net worth individuals willing to invest. Special economic zone visas may offer streamlined processes for companies within those zones.

The GOP application process involves securing a job offer, demonstrating local recruitment efforts, submitting detailed documentation, and obtaining approval from the Gibraltar Employment Service. Typical requirements include a completed application, passport, qualifications, job description, employment contract, references, police clearance, and medical certificate. Processing times range from several weeks to months, with fees varying by permit type.

Foreign workers can apply for indefinite leave to remain after five years of continuous legal residence, provided they meet conduct and financial criteria. Dependents, such as spouses and children, can also apply for visas with proof of relationship and sufficient financial support. Employers and employees must adhere to compliance obligations, including permit validity, lawful employment, and timely renewals, with non-compliance risking penalties like fines, deportation, or bans.