Hire Employees in Guernsey

Two routes exist. Registering a Guernsey entity gives you direct employment and permit sponsorship, followed by registration with the Revenue Service for ETI and with Social Security.

An Employer of Record removes that setup. The EOR is the legal employer, runs payroll, files quarterly ETI returns and handles social insurance and pension enrolment, while day-to-day direction stays with you.

Contractor routes are narrower here than they look. The ETI scheme expressly reaches sub-contractors as well as employees, and all labour-only contractors and sub-contractors in the construction industry are classified as employed persons by regulation. The scheme covers Guernsey, Alderney, Herm and Jethou.

Guernsey is a low-tax jurisdiction under real fiscal pressure, and that shapes the 2026 outlook. Income tax is a flat 20%, corporate tax 0% for most companies, and there is no VAT or GST, no capital gains tax and no inheritance tax. But the States has run a funding gap for nearly two decades, reserves are seriously depleted, and projections show them exhausted within a few years.

A Tax Reform Package published in June 2026 responds to that, and employers should be planning for it. It proposes cutting the basic income tax rate to 15% on income up to £28,000 with 20% above; raising the personal allowance by £600; introducing a social security allowance of £11,122 below which no contributions are paid; raising employer contributions to 7.6% by 2029; and adding an additional 2.5% employer rate between the upper earnings limit and £300,000. The States intended to debate it in July 2026, and any reform is likely to take effect from 1 January 2028.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Guernsey entity somewhere between 15 and 20 employees. Model both — see EOR vs Entity for the framework.

Employer social insurance is 7.0% of gross employment income and the employee pays 7.4%, both from 1 January 2025. Contributions are calculated only on earnings between the lower and upper earnings limits — the lower limit being the point at which the employer becomes liable at all.

Several published sources, including a live CountryPedia entry, still give 6.9% employer and 7.2% employee with an upper limit of £14,989 a month. All three figures are superseded. So is Locate Guernsey’s page, which carries the same old rates. The Social Insurance (Rates of Contributions and Benefits etc.) Ordinance 2025 increased rates and limits again for 2026, so confirm the current figures with Social Security rather than any secondary source.

Your Island Pension is a separate and newer employer cost. Since January 2025, employers with six or more employees must enrol staff in the secondary pension scheme, contributing at least 1% matched by the employee. From 1 January 2026 the employee minimum rises to 1.5%, and the rates scale upward over time.

Dividends count as earnings. A dividend paid to an employee by the private company employing them, or by an associated company, is included in the calculation of earnings for social security. If including it would push wages over the upper limit in that period, the dividend is apportioned equally across the pay periods it relates to rather than being sheltered by the ceiling.

Self-employed people contribute 12.2% and non-employed people under pension age 11.3%.

Gross annual salaries in pounds sterling. Social insurance applies between the lower and upper earnings limits, so the effective employer rate falls above the ceiling.

Benchmarks below are gross annual salaries in pounds sterling. Employer social insurance applies between a lower and an upper earnings limit, so the effective rate falls above the ceiling.

Payroll runs monthly but filing is quarterly, which is unusual. Under the Employees’ Tax Instalment scheme the employer deducts income tax on each payday, but records and remittance are returned by the 15th day of the month following each quarter — 15 April, 15 July, 15 October and 15 January.

ETI reaches further than conventional employment. For ETI purposes an employee is anyone holding or exercising an office or employment, expressly including company directors, part-time workers, casual workers and sub-contractors.

Income tax is a flat 20%. The personal allowance rose to £15,200 for 2026 from £14,600, and is tapered — reduced by £1 for every £5 of income above £85,000. Couples are no longer jointly assessed; each individual files and pays separately.

A tax cap of £220,000 a year is available to standard residents. Note that one published guide gives a £300,000 cap in its heading while stating £220,000 in the body.

Two administrative requirements catch new employers. A registration card is required for each employee, and a student over school-leaving age earning above the lower limit must give the employer a social insurance number within seven days of starting. Employers are also encouraged to notify Social Security when an employee works outside the Islands.

Income tax is a flat 20% above the personal allowance. The reform package would introduce a 15% basic rate below £28,000, but is not yet in force.

Employment is governed by Guernsey legislation, separate from both the UK and Jersey.

The minimum wage is £12.60 an hour for workers aged 18 and over from 1 October 2025, with £11.35 for 16 and 17 year olds. Note that a regional payroll bulletin circulating a £12.86 figure appears to relate to a neighbouring island rather than Guernsey — confirm with the States before contracting.

A statutory minimum wage applies to almost all workers aged 16 or above. Employers must give each employee a written statement of pay when remuneration is paid, and deductions beyond income tax and social insurance must be permitted by the contract or specifically agreed.

Statutory equal pay provisions apply, and the state old-age pension is payable from 65 depending on contribution history.

Contracts should record pay, hours, leave, notice and termination terms, and the employer must provide a written statement of pay with each payment.

Obtain a registration card for each employee and, where the hire is a student over school-leaving age, their social insurance number within seven days of starting.

Check the six-employee threshold for Your Island Pension before the first payroll run, since enrolment is mandatory above it.

Hours and overtime are governed by the employment contract and Guernsey employment legislation rather than by a single working time statute.

Certain workers sit outside Class 1 contributions altogether: those earning below the lower earnings limit, a person assisting their spouse in a trade for 24 hours or more a week, a person working for a near relative in a shared private house where the work is not for a trade, and students under school-leaving age.

Holiday pay paid in advance is treated distinctly for contribution purposes — check the treatment before making a lump-sum advance.

Guernsey observes its own bank holidays, including Liberation Day on 9 May marking the end of the wartime occupation.

Guernsey observes its own bank holidays, including Liberation Day on 9 May. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

The social insurance scheme funds sickness benefit, the States pension, unemployment benefit, bereavement benefits, family allowance, severe disability benefit, carer’s allowance, the pharmaceutical service and health benefit.

Your Island Pension adds a second pillar. Employers of six or more must enrol staff, and contribution minimums scale upward over time — the employee minimum reaching 1.5% from January 2026. Budget for the increases rather than the entry rate.

The States has resolved to increase percentage contribution rates specifically to ensure sustainable funding of both the Guernsey Insurance Fund and the Long-term Care Fund, which is the backdrop to the reform package.

There is no capital gains tax, no inheritance tax and no VAT, though proposals to implement a GST in 2027 were included in the 2025 Budget.

Termination follows Guernsey employment legislation, with notice and any severance set by statute and contract.

Final pay including accrued leave is due on separation and must be reflected in the ETI return for the quarter in which it falls.

Because ETI is quarterly, a final payment made early in a quarter is not remitted until the following quarter’s deadline — which lengthens the gap between payment and remittance compared with monthly systems.

Any dividend paid to a departing employee-shareholder remains within the social security earnings calculation and may be apportioned across the periods it relates to.

British and Irish nationals can live and work freely under the Common Travel Area. Others require a visa or work permit.

Employment Permits are the local control. They are granted to people invited to Guernsey because of their employment skills, or because the island lacks enough people to fill the jobs available. Three types exist, beginning with the Short-Term Employment Permit issued for up to one year and renewable until the holder has accumulated a defined period of continuous residence.

Housing category is the binding constraint. Open Market and Local Market categories strictly control residency access, and the permit and housing questions have to be solved together rather than sequentially.

Superseded contribution figures are widely published, including in live CountryPedia material. Employer social insurance is 7.0% and the employee rate 7.4%, not 6.9% and 7.2%, and the monthly upper limit is not £14,989. Locate Guernsey also still shows the old rates.

Your Island Pension is a real employer cost that older guidance omits entirely. Employers of six or more must enrol staff and contribute at least 1%, with minimums scaling upward.

Dividends to employee-shareholders count as earnings. They cannot be used to route remuneration around the upper earnings limit, because a dividend that would breach the ceiling is apportioned across the periods it relates to.

Note also that ETI is quarterly rather than monthly and reaches directors, casual workers and sub-contractors; that construction labour-only contractors are deemed employed by regulation; and that the personal allowance is tapered away above £85,000.

Work backwards from the start date. For a CTA national through an EOR, two to three weeks is realistic. For anyone else, the Employment Permit and housing category must be resolved together first.

Take contribution rates from Social Security directly rather than from published guides, given how widely the pre-2025 figures still circulate, and check the 2026 limits set by the 2025 Ordinance.

Check the six-employee threshold for Your Island Pension, obtain a registration card for each employee, set the quarterly ETI calendar for the 15th after each quarter end, and confirm whether any employee-shareholder will receive dividends that fall into the earnings calculation.