Global HR Compliance in Gibraltar: What Foreign Employers Must Know

Hiring in Gibraltar requires careful alignment with a local legal system that mirrors UK standards in structure but operates independently in enforcement and process. Employment contracts, social security, minimum wage, and immigration are governed by Gibraltar’s own institutions, and foreign companies cannot rely on UK registration or rules for compliance.

The main risks for international employers include mishandling of employment status, underpayment of social insurance, non-compliant termination, and unregistered work permits.

With updated contribution thresholds from July 2025 and a distinct immigration approval process, compliance in Gibraltar demands precision, especially when employing non-UK nationals or engaging staff on cross-border roles.

This page outlines the essential legal and operational requirements for compliant hiring and employment management in Gibraltar as of mid-2025.

Employment Contracts in Gibraltar

Gibraltar law requires employers to provide employees with a written statement of employment particulars within two months of the start date. The contract must outline key terms: job title, duties, hours, salary, probation conditions, notice periods, and disciplinary procedures.

Both indefinite and fixed-term contracts are allowed. Collective agreements are rare but can exist in certain regulated sectors. Any material change to terms must be communicated in writing.

Working Hours and Overtime

There is no statutory maximum working week in Gibraltar. However, standard full-time hours typically range from 37.5 to 40 per week across sectors. Overtime pay is not mandated by law and must be agreed contractually.

Customary practice, particularly in finance and hospitality, may involve enhanced rates or time-off-in-lieu. Hours must remain reasonable under local health and safety standards.

Leave and Benefits

Annual Leave
Employees are entitled to a statutory minimum of 15 working days of paid annual leave per year, plus 13 public holidays.

Sick Leave
Statutory sick pay is available for eligible employees through Gibraltar’s social insurance system. Employers may supplement this under company policy. A medical certificate is required after three consecutive days of absence.

Maternity and Paternity Leave
Pregnant employees are entitled to 14 weeks of maternity leave, with paid leave subject to contribution history under social insurance. Fathers are entitled to one week of paid paternity leave under the Employment Act.

Minimum Wage and Payroll

As of July 2024, the minimum wage in Gibraltar is £8.90 per hour, with the rate reviewed periodically by the government. Employers must comply with gross-to-net payroll regulations, deduct social insurance contributions, and withhold income tax (Pay As You Earn – PAYE) where applicable.

Employers must register with the Income Tax Office and the Department of Social Security and submit regular payroll and contribution reports. Payslips with itemized deductions are standard.

Probation Periods

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Probationary Periods in Gibraltar

Gibraltar law permits the use of probationary periods, which are a standard practice in employment contracts. The typical duration for a probationary period ranges from three to six months, with the exact length often tailored to the complexity of the role and the specific industry.

During this trial period, the contractual notice period for termination may be shorter than the standard notice period after probation has been successfully completed. However, it is crucial that these shorter notice entitlements are clearly and explicitly defined within the employment contract. Furthermore, they must not fall below the minimum statutory notice rights as stipulated by Gibraltar’s employment legislation.

This arrangement provides both the employer and the employee with a defined period to assess suitability for the role and the working environment before the employment becomes permanent.

Termination and Severance

Dismissal must be based on valid grounds such as misconduct, redundancy, or capability, and must follow fair procedure. Employees with more than one year of continuous service may bring claims for unfair dismissal.

Statutory notice ranges from one week (after one month of service) to twelve weeks for long-serving employees. Redundancy pay is calculated based on length of service, age, and weekly pay, following the UK-style formula.

Employers must document reasons for dismissal and retain supporting evidence in case of legal challenge. Compensation caps for unfair dismissal mirror those of UK tribunals but are enforced through Gibraltar’s Employment Tribunal.

Social Security Contributions (Updated for 1 July 2025)

Gibraltar has a compulsory social insurance scheme for all employees and employers. As of 1 July 2025, the contribution rates are earnings-related, subject to minimum and maximum thresholds:

• Employee Contribution:
  10% of gross earnings
  – Minimum: £14.33 per week
  – Maximum: £40.79 per week
• Employer Contribution:
  18% of gross earnings
  – Minimum: £31.97 per week
  – Maximum: £56.22 per week

Employers are responsible for:

• Registering each employee with the Department of Social Security
• Calculating contributions according to gross pay
• Remitting payments monthly and submitting reports on time

Non-compliance can result in fines or liability for unpaid contributions.

Immigration and Work Permits

While UK nationals and Gibraltar residents do not require work authorisation, non-UK nationals must obtain a valid work permit issued by the Director of Employment. Employers must demonstrate that the role could not be filled locally.

Work permits are typically issued for 1–2 years, renewable, and tied to a specific employer. Housing and immigration status are tightly linked. Any change in job role or employer requires reapplication.

Acumen International: Employer of Record in Gibraltar

Service Scope
Acumen acts as the Employer of Record for foreign companies hiring in Gibraltar, enabling compliant employment without setting up a local entity. We manage local onboarding, run Gibraltar-based payroll, and ensure full compliance with labour, tax, and immigration law.

Employer Responsibilities
We register employees with Gibraltar’s social security and income tax authorities, process monthly payroll with all deductions, and ensure mandatory benefits are correctly administered. Our model allows clients to operate legally while avoiding administrative overhead and local registration.

Immigration Support
Acumen International secures work permits for non-UK nationals and ensures roles are matched to permit type and employment status. We manage document preparation, employer representation, renewals, and coordination with the Department of Employment.

Risk and Compliance
We monitor all employment relationships for compliance with Gibraltar’s evolving legal requirements, including fair dismissal, contract terms, minimum wage rules, and contribution accuracy. We minimise the risk of tribunal claims and exposure to fines for non-compliance.

When Employers Turn to Acumen’s Gibraltar EOR Solution

Companies rely on Acumen’s Gibraltar EOR services in the following scenarios:

1. Hiring non-UK nationals who require work permits, without the infrastructure to manage local sponsorship, documentation, or immigration compliance.
2. Deploying sales, compliance, or support staff in Gibraltar without the cost or delay of establishing a legal entity.
3. Transitioning independent contractors into formal employment to avoid misclassification, retroactive liabilities, or Permanent Establishment risks.
4. Bridging operational gaps while registering a local presence, allowing business activity to begin immediately under compliant employment arrangements.
5. Scaling headcount for short-term or project-based work, where a flexible but legally sound employment structure is required.
6. Replacing underperforming local partners or payroll vendors, consolidating workforce operations under a single, accountable provider.
7. Managing payroll, PAYE, and social insurance contributions, without building internal legal or HR infrastructure.
8. Supporting workforce transitions linked to M&A, closures, or restructures, ensuring continuity without triggering employment disputes or compliance failures.