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Hiring in Monaco
Monaco, officially known as the Principality of Monaco, is a sovereign state in Western Europe. Monaco city is the capital and Monte Carlo is the largest quarter of Monaco. French is the official language. Euro is the official currency. Monaco has the highest GDP per capita in the world and the lowest poverty rate. Tourism and banking are the main sources of revenue. Monaco’s main trading partners are UK, US, Spain, Italy, Germany and Switzerland. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Monaco’s legal and tax regulations. Employment regulations are covered by the Labor Code. Labor Code stipulates that employees are entitled to 30 days of annual leave. There is no income tax in Monaco. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Monaco’s Labor Code and tax laws.
statutory labor requirements
Probation Period
- The duration of a probationary period is limited by law to three months.
Annual Leave
- The employee has the right to 2.5 working days of paid leave per month of actual work completed.
- The period of the leave must not exceed 30 days.
- Part-time employees have the right to the same number of days as full-time employees.
Public Holidays
- New Year's Day (1st January)
- Saint Dévote's Day (27th January)
- Easter Monday (13th April)
- Labor Day (1st May)
- Ascension Day (21st May)
- Whit Monday (1st June)
- Corpus Christi (11th June)
- Assumption of Mary (15th August)
- All Saints' Day (2nd November)
- National Day of Monaco (19th November)
- Feast of the Immaculate Conception (8th December)
- Christmas Day (25th December)
Maternity Leave
- Women are allowed 16 weeks’ maternity leave in Monaco, for the third child, maternity leave is 26 weeks.
- An allowance is paid during maternity off-time.
- A pregnant employee is not obliged to reveal her pregnancy until the time she wishes to take maternity leave.
- Notification can be by made verbally or by letter.
Paternity Leave
- You can take paternity leave of:
-
- 12 consecutive calendar days for a single birth
- 19 calendar days for multiple births
- 19 calendar days if there are already two or more other children in the household
- You can take the whole or part of this leave.
Sick Leave
- Days taken as sick leave do not qualify as paid leave, unless there are contractual provisions to the contrary.
- Days of absence for sick leave must not be deducted from the annual leave.
Work Hours
- Monaco has a standard work week of 39 hours per week or a maximum of ten hours per day.
Overtime
- If there is a request from the employer, an employee in Monaco can render overtime work which should not exceed 47 hours per week.
- Workers should be paid 25% for the first eight hours and 50% for any subsequent hours of overtime.
Notice Period
- If you have worked for your employer for one month or more, your notice period must be at least a week.
- If it’s between one month and 2 years, you are entitled to one week’s notice.
- For anything above 2 years’ service, you are entitled to one week per year worked, up to a maximum of 12 weeks for 12 years or more of continuous employment.
- So, if you have worked for seven and a half years, you are entitled to 7 weeks’ notice.
- This minimum applies no matter what your contract says.
Severance
- To qualify for a statutory redundancy payment, you must have been continuously employed for at least two years. Statutory redundancy pay is calculated with reference to your number of completed years’ service. You get:
-
- 1.5 weeks’ pay for each year in which you were 41 years old or above
- 1 weeks’ pay for each year in which you were over 22 but under 41 years’ old
- 0.5 weeks’ pay for each year in which you were under 22 years’ old
- A weeks’ pay is subject to a maximum figure of £538 (from April 2020).
- The maximum number of years which may be counted is 20.
13th / 14th Month Pay
- No
- There is no evidence that there is a statutory requirement to pay the 13th or 14th month salary.
- The labour code refers to governmental employees.
income tax
- Monegasque nationals and foreign nationals residing in Monaco, with the exception of French nationals, who are regulated by the 1963 bilateral tax treaty between France and Monaco, are not liable for income tax.
- However, the absence of income tax for individuals only relates to activities carried out and persons who are genuinely established in Monaco.
- Foreign-source income is subject to the domestic rules of the state in which the source of the income is located and is not subject to Monegasque tax.
deductible expenses
There are no deductible expenses as income tax is not applicable.
immigration
- All foreign nationals - that is, non-Monegasques - are required to obtain a work permit (Permit de travail) before they take up any job in Monaco.
- They also need to get a new permit if they change position or employer.
- It is the responsibility of the employer to help their employee obtain a work permit.
- Recruitment must be agreed by the Service de l'Emploi.
- When a job vacancy comes available the employer must contact the Service de l'Emploi, which then has four days to come up with an employee from Monaco or the surrounding area.
- Under Monegasque law local people with the same qualifications have priority.
- If a candidate within these criteria cannot be found, the employer may then propose its own candidate.
- To obtain a work permit the employee must submit their contract of employment stamped by the employment service, along with proof of residence and personal identification to the Service de l'Emploi.
- If the employee lives in Monaco, a valid Monegasque residence permit is required.
- If resident in France, a French identity card or valid residence permit that authorises him to work is necessary.
- The Employee also has to have an annual medical examination at the Office de la Médecine du Travail
Type of Visa/ Permit |
Documentation |
Validity |
Eligibility |
Work Permit |
|
N/A |
|
Residence Permit |
|
1 year (renewable up to 3 years) |
|
value added tax
- For the purposes of VAT Monaco is part of the European Union.
- The Principality adopts the French system for collection.
- Two rates of VAT apply: the normal rate of 19.6% (which is the standard rate in France) and a reduced rate of 7%, which applies to water, food products, medicines, books, special equipment for handicapped people, hotel accommodation, public transport services and public entertainment services.
VAT |
|
Standard Rate |
19.6% |
Reduced Rate |
7% |
withholding tax
There is no withholding tax on dividends and interests.
termination
- If you have worked for your employer for one month or more, your notice period must be at least a week.
- If it’s between one month and 2 years, you are entitled to one week’s notice.
- For anything above 2 years’ service, you are entitled to one week per year worked, up to a maximum of 12 weeks for 12 years or more of continuous employment.
- So, if you have worked for seven and a half years, you are entitled to 7 weeks’ notice.
- This minimum applies no matter what your contract says.
- To qualify for a statutory redundancy payment, you must have been continuously employed for at least two years. Statutory redundancy pay is calculated with reference to your number of completed years’ service. You get:
-
- 1.5 weeks’ pay* for each year in which you were 41 years old or above
- 1 weeks’ pay* for each year in which you were over 22 but under 41 years’ old
- 0.5 weeks’ pay* for each year in which you were under 22 years’ old
- A weeks’ pay is subject to a maximum figure of £538 (from April 2020).
- The maximum number of years which may be counted is 20.
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, maternity leave, paternity leave, overtime pay, severance pay and 13th month pay.
- Statutory benefits also include social security benefits
Statutory Benefits |
Probationary Period |
Annual Leave |
Public Holidays |
Maternity Leave |
Paternity Leave |
Overtime Pay |
Severance Pay |
13th Month Pay |
Social Security Benefits |
employee accruals
Christmas Bonus% |
0% |
Christmas Bonus Over Vacations % |
0% |
Severance per Year % |
Employees are entitled to severance pay that equals to 25% of their monthly salary (2.08% of annual salary)
|
Vacations %
|
Employees are entitled to 24 days of annual leave (6.59% of annual salary)
|
Notice %
|
Employees are entitled to 30 days of notice period for one year of service or more (8.24%)
|
Christmas Bonus Over Notifications%
|
0%
|
Vacations Plus%
|
0%
|
Total percentage of Salary (yearly)
|
The total employment accruals as a percentage of salary per anum are equal to 17%
|
employer accruals
Additional information (Country Accruals)
Social Security | 7.5% |
Description | Gainfully employed persons, including self-employed persons earning at least US$10,000 a year or with at least one employee (small businesses).Voluntary coverage for self-employed persons earning less than US$10,000 a year.
|
Exclusions | Casual employees who work less than one week in any calendar month and family labor. Special systems (individual retirement plans) for some types of government employees. |
Employer Accruals Additional information
Employment Accruals | ||
Annual Leave | The employee has the right to 2.5 working days of paid leave per month of actual work completed. The period of the leave must not exceed 30 days. |
This equals 8.22% (30/365 days) of annual income |
Maternity Leave | Women are allowed 16 weeks’ maternity leave in Monaco, for the third child, maternity leave is 26 weeks. | This equals 30.76% (16/52 weeks) of annual income |
Paternity Leave | Fathers can take paternity leave of: • 12 consecutive calendar days for a single birth • 19 calendar days for multiple births • 19 calendar days if there are already two or more other children in the household |
This equals 3.28% (12/365 days) of annual income |
Overtime | If there is a request from the employer, an employee in Monaco can render overtime work which should not exceed 47 hours per week. Workers should be paid 25% for the first eight hours and 50% for any subsequent hours of overtime. |
Normal hourly rate is around 26.5 EUR. Overtime is paid at an additional 6.6 EUR |
Severance | To qualify for a statutory redundancy payment, one must have been continuously employed for at least two years. Statutory redundancy pay is calculated with reference to one’s number of completed years’ service. • 1.5 weeks’ pay for each year in which employees were 41 years old or above • 1 weeks’ pay for each year in which employees were over 22 but under 41 years’ old • 0.5 weeks’ pay for each year in which employees were under 22 years’ old |
This equals 1.92% (1/52 weeks) of annual income |
13th Month | 13th month pay in the form of a 5% “prince's bonus” is mandatory in Monaco | This equals 5% of annual income |
Social Security | Employers must make the following social security contributions: - Sickness Contribution and Family Allocation 15.05%; Basic State Pension Contribution 8.03%; Unemployment Contribution 4.05%. | This equals 27.13% of annual income |