Introduction to Payroll in Slovakia
Payroll is one of the largest and most important expenses for your organization’s remote team. Make sure to remain compliant with the law, or penalties and fines could be additional expenses. If you’re looking to do payroll processing in Slovakia for your company, you need to be careful to not only pay your employees on time but also to stay compliant with all local labor laws.
Take advantage of the support and legal expertise of Skuad for your payroll outsourcing in Slovakia. Skuad can help help you with:
- Paying employee compensation
- Providing statutory benefits
- Making employer contributions
- Collecting employee contributions
- Providing and keeping track of leave
- Payroll taxes in Slovakia
- Other payroll services in Slovakia
If you are building a remote team in Slovakia, you can get help from Skuad to stay fully compliant with local labor laws and tax legislation. Labor laws are always subject to change, so you need to stay on top of the changes.
Payroll Process in Slovakia
There are three main phases in payroll processing in Slovakia: pre-payroll, payroll calculations, and post-payroll.
This phase is about setting up the organization and business profile, collecting employee information, and setting policies in place such as attendance and leave policies. You will also communicate with your employees their salaries, pay schedule, and statutory benefits.
Setting up the organization
Gather the necessary data for payroll such as employee information. This is also when you’ll communicate your work culture to your team. Let them know about policies regarding leave and attendance requirements. Make sure everyone is on board, and all employment contracts and policies are signed.
Register your company in Slovakia. Your business should get a registered number that you’ll use to send out payslips and tax forms.
Even if you have employees across Slovakia, policies may differ depending on the region. You don’t have to have only one universal set of policies for the whole country.
Communicate to your employees your policies regarding leave. Your workers are entitled to some leave in Slovakia, including parental leave, sick leave, and paid holidays.
Time sheets and Biometric devices record employee work hours which will have a direct influence on their payroll. Let your employees know policies regarding the recording of regular hours, shift hours, requests for time off, and having a doctor’s note for any sick days.
Some benefits must be given to employees by law. Make sure your company is complying with all labor legislation. Let your employees know which benefits they’ll receive, including any benefits and perks you’ll offer which are not mandated by law.
Payroll solutions by Skuad can ensure compliance with Slovakian legislation as well as your own country’s labor laws.
For each employee, make sure you calculate the correct earnings, allowances, reimbursements, and flexible benefits plans according to your company’s salary policies.
Make sure all employees know when they’ll get paid and how often. The payroll frequency in Slovakia is monthly.
In preparation for payroll, you’ll need to ensure all employee information is recorded and correct, such as their names, departments, and home addresses.
Payroll calculation phase
Data from pre-payroll is fed into a system that calculates your employee's paychecks. The output is salary after contributions, deductions, withholding, and taxes. This is the main component of the payroll process.
This is when employees receive their pay. When payroll calculations are complete, you will send advice to your bank for salary disbursement.
To maintain your company’s accounts properly, make sure all salary payments have been recorded.
Payroll reporting and compliance
Certain statutory deductions and contributions are withdrawn from employee pay and remitted to their respective government agencies. To see how your company can comply with labor laws and how your payroll can be timely and accurate, get a Skuad demo today.
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Payroll Processing in Slovakia
Payroll processing is a crucial part of managing any company. It’s important to take the time to ensure you are doing due diligence to the payroll process, especially when setting up payroll in another country. This may mean allowing a payroll solutions company to aid you with payroll.
Payroll Processing Company in Slovakia
Skuad can set up payroll in Slovakia for your remote team, so you can concentrate on other important matters such as growing your business.
Payroll Management in Slovakia
Managing your payroll includes maintaining proper financial records and obeying labor laws and regulations. Gross and net salaries are recorded and payslips are generated during this part of the process.
Payroll Compliance in Slovakia
Make sure your company complies with labor laws about payroll, benefits, taxes, and contributions to pensions or social security. Skuad’s legal experts track and stay on top of changes to legislation to make sure you are complying with all laws.
Payroll Components in Slovakia
Payroll components unique to Slovakia include how the company considers overtime pay, payments for hours worked over the weekend, and more.
Slovakia's national minimum wage is 646 EUR per month, and 3.71 EUR per hour. As of May 2022, 1 Euro is US $1.07. There is no mandated 13th-month salary, and bonuses are paid at the employer’s discretion.
The workweek in Slovakia is generally no more than 40 hours and eight hours per day.
All hours worked above 40 hours per week are considered overtime. This is regulated by collective agreements, and employment contracts but must be paid at certain minimums:
- Overtime is paid as 125% of the normal salary.
- Overtime hours worked at night are paid at 140% of the normal salary.
- Hours worked on Saturdays are paid at 150% of the normal salary.
- Hours worked on Sundays are paid at 200% of the normal salary.
Employers must make some contributions such as old age pensions, sickness insurance, disability insurance, guarantee insurance, unemployment insurance, accident insurance, and payments into the Solidarity Reserve Fund.
Employers must pay:
- 14% for old age pension
- 1.4% for sickness insurance
- 1% for unemployment insurance
- 3 % for disability insurance
- 0.25% for guarantee insurance
- 0.8% for accident insurance
- 4.75% paid into the Solidarity Reserve Fund
The total employer contribution does not exceed 1,935.16 per month, except for accident insurance contributions, which are not capped.
There are certain contributions employees must make as well. Employees must contribute:
- 4% for old age pensions
- 1.4% for sickness insurance
- 1% for unemployment insurance
- 3% for disability insurance
Employees can get 10 days of sick leave with a doctor’s note, compensated at 25% of the employee’s standard rate for the first three days and 55% for the fourth to tenth days.
Employees in Slovakia are entitled to 34 weeks of paid maternity leave, or 37 weeks if the employee is a single mother. In addition, 43 weeks of maternity leave is allowed for mothers who have multiple births.
This leave usually starts between six and eight weeks before the expected delivery. The minimum maternity leave is 14 weeks. The payment for maternity leave is 75% of the previous year’s average salary, paid by social security.
There is no statutory requirement to provide paternity leave, but if the mother is not receiving benefits, the father may take up to 28 weeks.
There are 15 public holidays a year in Slovakia for which employees must be given paid time off. If an employee must work on a holiday, they are to be paid double pay.
The amount of annual leave that employees are entitled to depends on certain criteria:
- Four weeks leave – the minimum annual leave.
- Five weeks leave – for employees 33 years of age or older.
- Eight weeks leave – employees who work in dangerous environments.
- Eight weeks leave – employees who are parents.
These are the public holidays in Slovakia which are paid days off:
- Republic Day
- Good Friday
- Easter Monday
- Labor Day
- Liberation Day
- St Cyril and St Methodius Day
- Slovak Uprising Day
- Constitution Day
- Lady of Sorrows' Day
- All Saints' Day
- Freedom and Democracy Day
- Christmas Eve
- Christmas Day
- Second Day of Christmas
Payroll taxes in Slovakia
Payroll tax in Slovakia is a large part of your organization’s expenses. The Slovakia corporate tax rate is a flat tax rate of 21%.
For employees, the income tax rate in Slovakia is 19% for incomes up to 38,553.01 EUR per year and 25% above that income.
If an employee is terminated with cause and provided a notice, severance pay of four times the employee’s average monthly salary is due. The length of probation depends on employment contracts but can be no longer than three months, or six months for managers.
Using a payroll company in Slovakia can help you with all of these payroll components.
With the right payroll services in Slovakia, you can pay your remote team easier and with more assurance of full compliance with laws. If you’re ready to form your remote workforce and pay them with one-click payroll, stay compliant with legislation, and save time and frustration, get in touch with Skuad today and ask for a demo.