Per diem compensation for work out of site under Greek employment law
According to article 144 of Individual Labour Law Code there is a requirement to pay per diem in Greece in cases when the employee stays away overnight. In particular, for each night away from home, per diem is equal to the statutory daily wage or 1/25th of the statutory monthly wage for employees paid on a monthly salary and there is no relation with either the country of destination or the duration of the business trip day. Unless otherwise agreed, it can be paid at the end of the month when the trip has taken place, together with the monthly remuneration. Although, the per diem is included in the monthly payslip, it is referred to separately.
In addition, it is stipulated that, if the employer provides the posted employee with food and accommodation at the place of work to which he is posted, only one quarter of the above allowance shall be paid to him. If only food is provided, 1/2 thereof shall be paid and if only accommodation is provided, 4/5 thereof shall be paid. Noted that regardless the cost of the food, the reduction in compensation is specific, it cannot be greater if the employer pays for example an expensive meal.
As regards the formalization of a business trip, there is not a specific form of document which should be filled in and/or submitted to any Service. Therefore, the travel of an employee away from home is a matter of planning and daily practice for the employer, which must ensure that the employee is reimbursed for the financial obligations arising from the trip. As a special note to the above, in case of an accident of the employee during the period of a business trip, this could be considered as a working accident.
In cases where the employee wishes to extend his/her stay for personal purposes, he/she should ask for the use of the corresponding annual days of leave he/ she is entitled to, and the employer should approve this decision. No per diem is paid for the additional stay in a foreign country. This could be secured by the planning of the trip before the departure of the employee from home. Regarding the cost of returning, a special agreement could be made between the employer and the employee, whereby the employer agrees to cover the expenses that would normally be covered if the employee was returning home as scheduled and the employee to cover any difference occurs due to the re-scheduling of the travel.
Τhe per diem compensation is considered as employment income, it is added to the annual remuneration of the employee and is taxed according to the following scale:
|
Income (€) |
Tax rate % |
Tax amount (€) |
Total (€) | |
| Income | Tax | |||
| 0 – 10.000 | 9% | 900 | 10000 | 900 |
| 10.001 – 20.000 | 22% | 2200 | 20000 | 3100 |
| 20.001 – 30.000 | 28% | 2800 | 30000 | 5900 |
| 30.001 – 40.000 | 36% | 3600 | 40000 | 9500 |
| 40.001 – ….. | 44% | |||
Further, it should be pointed out that the following are excluded from the calculation of employment income:
- the compensation for accommodation and food expenses and per diem paid by the employee exclusively for the purposes of the employer’s business activity,
- the compensation for travel expenses paid by the employer for the purposes of the employer’s business activity, including the compensation for charging a vehicle with zero or low emissions up to 50 g. CO2/km., as long as travel expenses incurred by the employee during the performance of his/her service and are evidenced by legal documents/invoices. Α special term that expenses will be paid only if the relevant receipts are submitted by the employee within a certain deadline can be included in the employment contract or in the internal policy of the employer, provided this policy is acknowledged to the employee. However, it must be pointed out that in case of a dispute, the denial of the employer to pay such expenses due to the failure of the employee to meet the deadline set by the employer could be judged as abusive.
In view of the above, the compensation for accommodation, food and travel expenses paid by the employer to the employee for the purposes of the employer’s business activity, i.e. incurred by the employee during the performance of his/her service for the provision of employment, do not increase the total declared employment income provided that these expenses are evidenced by legal documents/invoices.
* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.