When hiring employees in Greece, businesses must comply with a set of mandatory social benefit contributions as outlined by the Greek Social Security Law (Law 4387/2016) and other related regulations. These contributions ensure employees have access to essential benefits such as pensions, healthcare, unemployment support, and maternity leave. Employers must remain compliant to avoid penalties, ensure employee satisfaction, and manage employment costs effectively.
This guide outlines the key components of Greece’s social benefits system, contribution obligations, and best practices for managing employee benefits in Greece.
What are the Components of Greece’s Social Security System?
Greece’s social security system is composed of the following six key components, which are funded through mandatory contributions from both employers and employees:
- Pension Insurance (EFKA – National Social Security Fund)
- Health Insurance (EOPYY – National Health Insurance Organization)
- Unemployment Insurance (OAED – Manpower Employment Organization)
- Work Accident and Occupational Disease Insurance
- Medical Leave and Maternity Leave
- Other Contributions (Social Solidarity Contribution, Training Fund, etc.)
These components ensure employees have access to retirement support, healthcare coverage, and financial aid during periods of unemployment, maternity leave, or work-related injury.
What Are the Contribution Requirements for Each Social Benefit?
1. Pension Insurance (EFKA)
This insurance provides financial support for employees after retirement.
- Employer Contribution: 33% of the gross salary
- Employee Contribution: 67% of the gross salary
💡 How It Works
Contributions are paid into the employee’s individual pension account under EFKA. Employees must contribute for a minimum of 15 years to qualify for a pension. The statutory retirement age in Greece is 67 years.
2. Health Insurance (EOPYY)
Health insurance covers employees’ healthcare expenses and provides access to medical services.
- Employer Contribution: 55% of the gross salary
- Employee Contribution: 55% of the gross salary
💡 How It Works
Health insurance contributions provide access to medical consultations, hospitalization, treatments, and medicines. Employees and their dependents are eligible for free or subsidized healthcare services under the EOPYY system.
3. Unemployment Insurance (OAED)
Unemployment insurance supports employees in case of job loss and provides financial assistance for a limited period.
- Employer Contribution: 3% of the gross salary
- Employee Contribution: 2% of the gross salary
💡 How It Works
If an employee becomes unemployed, they may receive monthly unemployment benefits for up to 12 months. To qualify, employees must have worked at least 125 days within the last 14 months.
4. Work Accident and Occupational Disease Insurance
This insurance covers treatment and financial support for employees injured at work or diagnosed with an occupational disease.
- Employer Contribution: 1% of the gross salary
- Employee Contribution: None
💡 How It Works
In case of work-related injury, the employer submits a claim to the relevant authority. Once verified, the insurance covers treatment and the employer is responsible for paying the employee’s salary during recovery.
5. Medical Leave and Maternity Leave
This contribution supports employees during medical leave and maternity leave.
- Employer Contribution: Part of the employer’s total contribution (under the labor insurance scheme).
- Employee Contribution: None
💡 How It Works
Female employees are entitled to 119 days of paid maternity leave (56 days before birth and 63 days after birth). The maternity allowance is paid by the Manpower Employment Organization (OAED). Employees can also receive financial support during medical leave, subject to a medical certificate and eligibility criteria.
6. Other Contributions
These include contributions to the Social Solidarity Contribution, the Training Fund, and other industry-specific levies.
- Employer Contribution: Variable, depending on the industry.
- Employee Contribution: Variable, depending on the industry.
What is the Contribution Base and How is It Calculated?
The contribution base refers to the salary used to calculate social insurance contributions. In Greece, the contribution base is the employee’s gross monthly salary.
Key Points to Know
- Minimum Base: Contributions are calculated on at least the minimum wage (EUR 780/month as of 2024).
- Maximum Base: There is no fixed upper limit for the contribution base in Greece.
| Category | Contribution Rate | Contribution Base |
|---|---|---|
| Pension (EFKA) | 20% (Employer 13.33%, Employee 6.67%) | Gross monthly salary |
| Health (EOPYY) | 7.10% (Employer 4.55%, Employee 2.55%) | Gross monthly salary |
| Unemployment (OAED) | 4.2% (Employer 3%, Employee 1.2%) | Gross monthly salary |
| Work Accident Insurance | 1% (Employer only) | Gross monthly salary |
Detailed Example of Salary Calculation
| Category | Amount (EUR) | Employer Contribution | Employee Contribution | Notes |
|---|---|---|---|---|
| Base Salary | 2,500.00 | – | – | 160 hours/month |
| Pension (EFKA) – 20% | 500.00 | 333.33 | 166.67 | 13.33% (Employer) + 6.67% (Employee) |
| Health Insurance (EOPYY) | 177.50 | 113.33 | 64.17 | 4.55% (Employer) + 2.55% (Employee) |
| Unemployment (OAED) – 4.2% | 105.00 | 75.00 | 30.00 | 3% (Employer) + 1.2% (Employee) |
| Work Accident Insurance | 25.00 | 25.00 | – | 1% (Employer only) |
| Net Salary | 1,692.50 | – | – | Total salary after deductions |
| Employer’s Contribution | 707.50 | – | – | Total employer contributions |
| Total Cost to Employer | 3,207.50 | – | – | Total cost to employer |
Summary
Compliance with Greece’s mandatory social benefit system is vital for businesses operating in the country. Contribution rates and payment bases are standardized, meaning that employment costs will remain consistent regardless of location within Greece.
Employers must be aware of:
- The 6 core components of the social benefits system.
- The calculation of contribution rates based on gross salary.
- The penalties for non-compliance, which include fines, backdated contributions, and possible employee claims.
By adhering to Greek labor laws and managing social contributions effectively, businesses can ensure compliance, reduce financial risk, and enhance employee satisfaction.