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Tax consequences of executives’ working hours exemption in Greece

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Taxation of income will be impacted with a change in Greece's employment law

Maria Rigaki of EY explains why a new decision regarding the exemption of executive employees from working hours limits will have wide-ranging implications, including on taxation of income.

By virtue of Ministerial Decision 90972/15.11.2021 (Β' 5393), the Greek Ministry of Employment has enabled Article 73 (2c) of Law 4808/2021. This sets the preconditions according to which the capacity of an employee as an executive may be confirmed and by which they can be validly exempted from working hours schedules and payment of overtime. 

The confirmation of the preconditions categorising a person as an executive employee will exclude them from the (future) implementation of the digital working card, according to which the Greek labour authorities will have direct and real-time access to the daily working hours of employees. 

Basic criteria

Specifically, an employer should register employees as executive personnel in the online reporting system of the Greek Ministry of Employment, on the condition they meet one of the following criteria:

  • They either (a) exercise management rights over other employees of the company, or (b) represent and commit the business to third parties, or (c) are members of the board of directors or members of a corresponding governing body of the employer, or (d) are shareholders or partners holding more than 0.5% of the employer’s voting rights.

  • They are heads of departments or units of the employing entity, provided that these employees are remunerated with an agreed monthly remuneration amounting to no less than six times the national minimum wage. In today’s terms, this is no less than €663 times 6 – €3,978 ($4,450) gross per month or €55,692 gross per year – taking into account that Greek payroll provides for 14 salaries per year.

  • They are paid with agreed monthly salaries that are no less than eight times the national minimum wage. In today’s terms, this is no less than €663 times 8 – €5,304 gross per month or €74,256 gross per year.

The national legal minimum salary is expected to be increased from €663 gross to €703 gross as of May 2022. The above-mentioned thresholds are expected to be increased accordingly.

Regarding the meaning of these monthly salaries, the Ministry maintains that voluntary benefits that have become mandatory for the employer (benefits the employer may not unilaterally revoke), shall be taken into account for the respective salary thresholds to be met.

More specifically, any kind of remuneration (monthly salary, commissions, etc.) and benefits, such as the provision of a company car and/or a mobile phone, and group insurance contract, if and when they have acquired a mandatory status and are granted in exchange for the work provided, will then be taken into account when calculating regular salaries. 

However, benefits that may be unilaterally amended or where it is uncertain whether these will be actually provided to the employee, such as bonuses associated with the achievement of individual or corporate goals, shall not be taken into consideration.

It should be noted that the restriction imposed on the agreed monthly remuneration (more than six or eight times the statutory minimum wage, respectively) is a prerequisite for the employee to be granted the status of manager. This compensates for their exemption from specific labour law provisions taking into account, in particular, the level of the average wage paid in the country.

Main points to note

The extent to which a company would like to take into consideration items that do not constitute part of the employee’s statutory salary in order to meet the above-mentioned minimum thresholds and exempt the respective employee from working hours schedules and overtime payment should be proactively and thoroughly examined.

This is because the inclusion of a benefit to the concept of a statutory salary might have as a side effect the obligatory provision of respective social security contributions and salary taxes, as well as a higher termination indemnity, if the employment is terminated at the employer’s discretion.


Maria RigakiDirector, EYE:   

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