Employer of Record in Gibraltar

An Employer of Record, or EOR, is a company that legally employs workers on your behalf in Gibraltar. This means you can hire talent in Gibraltar without setting up your own local entity. The EOR handles all the legal and administrative tasks of employment, allowing you to focus on managing your team's day to day work. For companies looking to hire in Gibraltar, an EOR like Rivermate can simplify the process.

How an Employer of Record (EOR) Works in Gibraltar

Using an EOR in Gibraltar streamlines hiring and employment. Here is how it typically works:

1. You find the talent. You identify the candidate you want to hire in Gibraltar.
2. The EOR steps in. The EOR becomes the legal employer for your chosen candidate.
3. Contracts are handled. The EOR drafts a compliant employment contract that meets Gibraltar's labor laws.
4. Onboarding is managed. The EOR takes care of the necessary paperwork and procedures to onboard your new employee.
5. Payroll and taxes are processed. The EOR manages payroll, ensuring correct tax withholding and social security contributions are paid to the authorities in Gibraltar.
6. Compliance is ensured. The EOR stays up to date with local employment laws to keep your hiring practices compliant.

Benefits of Using an EOR for Hiring in Gibraltar

Partnering with an EOR in Gibraltar gives you a straightforward way to grow your team. You get to tap into the local talent pool without the headache of navigating foreign employment laws on your own.

• Saves time and money. Setting up a legal entity in another country can be expensive and time consuming. An EOR allows you to bypass this process.
• Ensures legal compliance. EORs are experts in local labor laws, reducing the risk of non-compliance.
• Simplifies administration. The EOR handles complex tasks like payroll, benefits, and tax compliance.
• Provides local expertise. You gain access to valuable insights into local business practices and market conditions.
• Offers flexibility. An EOR makes it easier to scale your team up or down in Gibraltar as your business needs change.

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.

Hiring in Gibraltar means tapping into a diverse and skilled workforce. The process is straightforward, but you need to follow local employment laws. This ensures a fair workplace for everyone.

Employment contracts & must-have clauses

You must give employees a written statement of their main employment terms. This is usually done shortly after they start. While this isn't the full contract, it includes the key details.

Your employment contracts should be clear and cover the essentials. Here are some must-have clauses:

• Names of employer and employee: Clearly identify both parties.
• Start date: State when the employment begins.
• Job title and description: Define the role and responsibilities.
• Place of work: Specify the location where the employee will work.
• Pay: Detail the salary and how often it will be paid.
• Hours of work: Outline the expected working hours.
• Holiday entitlement: Explain the annual leave and holiday pay.
• Sick pay: Describe the provisions for sick leave and pay.
• Notice periods: State the required notice for both you and the employee.
• Contract duration: Specify if the contract is for a fixed term.

Probation periods

In Gibraltar, the first week of employment is a probationary period by law. During this week, either you or the employee can end the contract without notice.

Many employers choose to have a longer probation period. This is to see if the employee is a good fit. These periods are usually three to six months. If you opt for a longer probation, make sure you clearly state the terms in the employment contract. This includes any shorter notice periods that apply during this time.

Working hours & overtime

The standard working week in Gibraltar is typically around 40 hours. The law sets a maximum average of 48 hours per week, calculated over a 17-week period.

Overtime is any work done beyond the standard hours. While there isn't a single legally mandated overtime rate, it's common to pay 1.5 times the normal rate. For work on weekends or public holidays, this can increase to double the normal rate. You should clearly define your overtime policy in the employment contract.

Employees are also entitled to rest breaks. They should get at least 11 consecutive hours of rest in every 24-hour period.

Public & regional holidays

Your team in Gibraltar is entitled to paid time off for public holidays. Here are the public holidays for 2025:

Hiring contractors in Gibraltar

Hiring independent contractors can be a flexible way to bring in specialized skills. Contractors are self-employed and manage their own taxes and social insurance payments. This can be a cost-effective option since you don't have to provide employee benefits.

However, it's crucial to classify workers correctly. Misclassifying an employee as a contractor can lead to serious penalties. Gibraltar authorities look at the reality of the working relationship, not just the contract. They consider factors like:

• Control: Do you set their working hours and direct their work?
• Integration: Are their tasks a core part of your business?
• Payment: Is their pay regular, like a salary, rather than project-based?
• Exclusivity: Are they required to work only for you?

An Employer of Record (EOR) can help you avoid these risks. We can help you hire contractors compliantly. We take on the legal responsibility, ensuring that your contractors are classified correctly. This lets you focus on your business goals without worrying about misclassification.

In Gibraltar, handling compensation and payroll means following clear rules. You need to calculate and pay the right amount of tax for your employees. You also handle social security payments. This is done through the Pay-As-You-Earn (PAYE) system. It’s a straightforward system, but you have to get it right.

Payroll cycles & wage structure

You can pay your employees weekly, fortnightly, or monthly. The choice is yours, as long as you meet the minimum wage requirements. This gives you flexibility in how you manage your payroll.

There's no rule that says you have to pay a 13th or 14th month salary.

Overtime & minimums

The standard work week in Gibraltar is 40 hours, spread over five days. Anything beyond standard hours is overtime. Overtime pay is usually 1.5 times the normal rate on weekdays and double the rate for weekends and holidays.

The minimum wage is £8.90 per hour.

Employer taxes and contributions

As an employer, you have a couple of key responsibilities. You need to calculate and withhold the correct amount of tax from your employees' wages. You also need to pay social insurance for them.

Employee taxes and deductions

Your employees also contribute to social insurance from their wages. They also pay income tax.

Employees have a choice between two tax systems: the Allowances Based System (ABS) or the Gross Income Based System (GIBS). They will be assessed under the system that results in a lower tax payment.

In Gibraltar, your employee benefits package and leave policies are key to attracting and keeping great people. The law sets out clear minimums that you must provide for your team. This includes paid time off, sick leave, and contributions to social insurance. Many companies, especially in competitive fields like finance and gaming, offer more than the basics to stand out. Understanding both the required and supplemental benefits helps you build a competitive and compliant benefits program.

Statutory leave

Gibraltar law requires you to provide several types of paid leave.

• Annual Leave: Your employees get a minimum number of paid vacation days each year. The exact amount depends on their length of service, starting at 15 days and increasing to 25 days for employees with over eight years of service. This is in addition to public holidays.
• Sick Leave: If your employee has worked for you for at least three months, they are entitled to two weeks of sick leave at full pay. This is followed by four weeks at half pay within any 12 month period.
• Maternity Leave: Female employees receive maternity leave. They can take up to 14 weeks of leave, with a possible extension to 29 weeks.
• Paternity Leave: Fathers are also entitled to statutory paternity leave and pay.
• Parental Leave: Parents with at least one year of service can take parental leave.

Public holidays & regional holidays

Your employees are entitled to a paid day off for public holidays.

Typical supplemental benefits

Here is a look at the benefits you must provide versus what you can offer to be more competitive.

How an EOR can help with setting up benefits

Setting up a benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already understands Gibraltar's employment laws and typical benefit expectations. They handle the administrative work of enrolling your employees in mandatory social insurance programs. They can also advise on and manage supplemental benefits, like private health insurance or pension plans. This saves you time and ensures you are fully compliant with local regulations from day one.

When an employment relationship in Gibraltar ends, you need to follow a clear process. This process, known as termination and offboarding, has rules to protect both you and your employee. Following these rules ensures you stay compliant with local labor laws and avoid problems. It involves giving proper notice, calculating final pay correctly, and completing all necessary paperwork.

Notice periods

When you decide to terminate an employment contract, you must provide a minimum amount of notice. The length of this notice period depends on how long the employee has worked for you.

Here are the minimum notice periods required by law in Gibraltar:

Your employment contract can state longer notice periods. If it does, you must follow the contract. You must give the notice in writing. During this time, your employee should continue to work, and you must continue to pay them as usual.

Severance pay

In Gibraltar, severance pay is not always required. It is mainly for redundancy situations. Redundancy happens when the job position is no longer needed. If you are making an employee redundant, you may need to provide redundancy pay. The amount is based on the employee's age, length of service, and weekly pay.

For a termination to be fair, especially for reasons of conduct or capability, you must follow a fair process. This usually includes:

• Investigation: Look into the facts of the situation.
• Notification: Tell the employee in writing why they might be dismissed and invite them to a meeting.

Failing to follow a fair process can lead to claims of unfair dismissal.

How Rivermate handles compliant exits

At Rivermate, we make sure every termination and offboarding process in Gibraltar is handled correctly. We help you stay compliant with all local laws.

Here is how we manage the process:

• Compliance check: We review the reason for termination to ensure it is fair and lawful.
• Notice period management: We calculate the correct notice period based on the employee's service length and your contract.
• Final pay calculation: We calculate all final payments, including any outstanding salary, unused vacation days, and severance pay if applicable.
• Documentation: We prepare all necessary termination documents, including the final payslip and any required government forms. We make sure to submit the 'Termination of Employment' form within 7 days of the termination date.
• Clear communication: We help you communicate the decision to your employee in a clear and respectful way.

We handle the details so you can focus on your business. We make sure the process is smooth and fair for everyone involved.

Navigating visas and work permits in Gibraltar can be straightforward. If you are a citizen of an EU or EEA country, you can generally live and work in Gibraltar without a permit. For everyone else, you will need a work permit. The process starts after you have a job offer. Your employer will then need to apply for your permit.

Employment visas & sponsorship realities

An Employer of Record (EOR) can make hiring in Gibraltar much simpler. An EOR acts as the legal employer for your team members in Gibraltar. This means they can sponsor work permits for non-EU and non-EEA nationals.

Here is what you can expect:

• EORs can sponsor work permits. If you want to hire someone from outside the EU or EEA, an EOR can handle the sponsorship process.
• The process is employer-led. The EOR, as the legal employer, will manage the application for the work permit.
• Local labor market needs are a factor. The EOR will need to show that there are no suitable candidates from the local workforce.

An EOR simplifies the process by managing the necessary paperwork and ensuring compliance with local immigration laws. This allows you to hire the talent you need without setting up your own legal entity in Gibraltar.

Business travel compliance

For short-term business trips to Gibraltar, you need to be aware of the entry requirements.

All visitors need a passport, unless they are EU nationals with a valid national identity card. If you need a visa to enter the United Kingdom, you will likely need a separate one for Gibraltar. Keep in mind that Gibraltar is not part of the Schengen area, so a Schengen visa will not be sufficient for entry.

To ensure a smooth business trip, it is a good practice to:

• Verify visa requirements. Check if your nationality requires a visa for Gibraltar before you travel.
• Carry proper documentation. Have your passport and any other necessary travel documents with you.
• Understand the purpose of your visit. Be clear about the business activities you will be conducting to ensure they fall within the scope of a business visit.