Slovakia

Slovakia PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Slovakia to companies willing to enter the Slovakian market or hire local/expat employees in this country.

A widespread approach requires establishing a subsidiary in Slovakia.  Still, our solution affords you to start the operations in Slovakia within days hence save costs and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. Indeed, legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf.

Slovakia fast facts

Population, million: 5
Land area: 49,035 km²
Capital: Bratislava
Local currency: Euro (EUR)

GDP per capita:$ 38,321
GDP in currency:$ 209.186

Slovakia, landlocked country of central Europe. It is roughly coextensive with the historic region of Slovakia, the easternmost of the two territories that from 1918 to 1992 constituted Czechoslovakia. It is bordered by Poland to the north, Ukraine to the east, Hungary to the south, Austria to the west, and the Czech Republic to the northwest. Slovakia’s territory spans about 49,000 square kilometres (19,000 sq mi) and is mostly mountainous. The population is over 5.4 million and consists mostly of ethnic Slovaks. The capital and largest city is Bratislava, and the second-largest city is Košice. The official language is Slovak.

 

Hiring, Negotiating and Doing Business in Slovakia

Necessity of written employment contract

According to the Labour Code, employment relations shall be established by written employment contracts between an employer and employees. Besides an employment contract, the Labour Code recognizes three other contract types: work performance contract, work activities contract and temporary student job contract.

Different forms of engagement: employment, contracting, work with private entrepreneur

Pursuant to the Act on Illegal employment, it is prohibited for an employer to employ persons without an established employment relationship. This is applicable for all types of individuals bellow:

  • Slovak citizens,
  • citizens of European Union (“EU”) or of contracting states of the Agreement on the European Economic Area and Switzerland (“EEA”),
  • non-EU and non-EEA citizens.

A third-country national has the same right to use employment services as a citizen of Slovakia, with the following restrictions:

  • EU citizens

EU citizens are entitled to stay in Slovakia without any conditions or formalities for three months after the date of entry into the territory of Slovakia.

An EU citizen staying in Slovakia for more than three months is required to apply for registration of residence in Slovakia, while one of the reasons under which an EU citizen is authorized to stay in Slovakia is an employment in Slovakia.

  • NON-EU citizens

Citizens of other countries than the EU or EEA countries are entitled to work in Slovakia if they have work permits / temporary residence permits for the purpose of employment.

Throughout 2018 have been introduced several new regulations to make employment of non-EU citizens more flexible in areas of industry with lack of workforce, in particular in relation to shortening the time periods for granting of temporary residence permits and reducing of a related administrative burden.

Slovakia Employment Contract

Types of employment agreements

Slovak law allows employers and employees to agree upon one of two basic types of job contracts:

  • Fixed-term employment contract is limited to up to two years. The fixed-term contract can be prolonged or renewed, but only twice within two years.
  • Employment contract for unlimited does not state a fixed period for the contract’s validity.

In addition to these, two basic forms of employment contract, there are other agreements which can serve as the basis for employment relations in an agreement on performing certain tasks:

  • An agreement on performing certain tasks can be signed between an employer and a natural person, provided the performance of the tasks stated in the contract does not exceed 350 hours in a year.
  • An agreement on working activity can serve as a basis for performing work not exceeding 10 hours per week.
  • An agreement on seasonal work for students can be signed between employers and a natural person who is a student. This contract can be used for performing tasks that do not require, on average, more than half of the standard weekly working hours and the agreement must be accompanied by proof that the employee is a student.

Slovakia working hours

The maximum weekly working time is 40 hours, employees working on the basis of a two-shift system may work up to 38,75 hours per week and employees working on a three-shift system or who are involved in continuous operation may work up to 37,5 hours per week. It is also possible to agree on an uneven distribution of working time with the representatives of the employees. 

Overtime

In general, upon agreement with the employer, employees may perform overtime work. Overtime work may reach up to 400 hours per calendar year. Of this time, the employer may order the overtime work in the extent of up to 150 hours per calendar year, the remainder of overtime work shall be agreed with the employee. For the work performed in excess of the standard working time, the employee is entitled to an allowance, specifics of which are regulated in the Labour Code.

Vacation leave in Slovakia

Any employee who works for the same employer constantly for at least 60 days in a calendar year is entitled to annual paid leave on a proportionate basis. The basic annual leave entitlement is at least 4 weeks, rising up to 5 weeks for employees who are 33 years old or older (already in the year in that the employee reaches the age of 33, regardless of the birth date of the employee) and for employees who permanently take care of a child.

Slovakia Maternity Leave

Maternity benefit is provided per days in the amount of 75% of the daily assessment basis. The entitlement of the pregnant insured woman or of the insured woman taking care of a new born child is awarded provided that the person concerned has been insured at least 270 days within the period of two years prior to the confinement.

The benefit is payable for -34 weeks (37 weeks for the single mother and 43 weeks for multiple births) including at least six weeks before the expected date of childbirth.

The maternity benefit can be claimed apart from the mother of the child also by another insure. Another insure is:

  • the father of the child
  • On condition the mother died
  • On condition, based on the medical assessment, the mother is neither able nor allowed to care about the child due to her unfavourable health condition lasting at least one month, and on condition the mother of the child is not in receipt of the maternity benefit or the paternal allowance
  • Based on the agreement with the mother, after elapsing six months after the child delivery at the earliest, and in the event the mother of the child is not in receipt of the maternity benefit or the paternal allowance
  • the spouse of the mother of the child, on condition, based on the medical assessment the mother is neither able nor allowed to care about the child due to her unfavourable health condition lasting at least one month, and on condition the mother of the child is not in receipt of the maternity benefit or the paternal allowance
  • the spouse of the father of the child if caring about the child whose mother died
  • the natural person if caring about the child based on the decision taken by the competent authority.

The maternity benefit claim commences to another insure as of the day of taking over the care of the child and ceases by elapsing 28th week from the maternity claim commencement, or by elapsing 31st week from the maternity claim commencement if lone, or 37th week from the maternity claim commencement of taking over two or more children.

Slovakian Severance Laws

Both employer and employee may terminate an employment contract by a written notice. As mentioned above, the employee may terminate the employment contract for any reason or without stating any reasons. On the other hand, the employer may terminate the employment contract only in the situations expressly stipulated in the Labour Code, e.g.:

  • if the employer’s business or a part thereof is wound-up or relocated and the employee does not agree with the change of agreed place of work,
  • if the employee is made redundant due to change in the employer´s business scope, technical equipment, reduction in the number of employees with the aim of increasing work efficiency, or other organizational changes,
  • if there is an (a) ongoing but less serious breach of working discipline, the employee may be dismissed, provided he/she has been warned in writing within the previous six months as to the possibility of dismissal or (b) the employee does not satisfactorily fulfil the work tasks, and the employer has in the preceding six months challenged her/him in writing to rectify the insufficiencies, and the employee failed to do so within a reasonable period of time.

The general length of the notice period for a Slovak labour contract is:

  • the statutory minimum notice period is 1 month (unless longer notice period is stipulated by the Labour Code),
  • 2 months, if the employee was employed for at least 1 year but less than 5 years,
  • 3 months, if the employee was employed for at least 5 years.

Longer statutory notice period depends on the length of employment, as stated above.

Slovakia Tax

The employer is obliged to pay monthly contributions to health insurance, social insurance and advances on the income tax. The amounts of contributions are presented in the table below:

  • Payrolls and contribution of employee in total – 13,40%
  • Payrolls and contribution of employer in total – 35,25%

Minimum wage (monthly, January the 1st, 2020): 580 EUR.

Health Insurance Benefits in Slovakia

Benefits provided by the SIA in this area are the cash benefits, the benefits in kind are provided by the Health Insurance Companies. The cash benefit types include: sickness benefit, nursing benefit, equalization benefit, maternity benefit. The sickness benefits are provided from the social insurance system from the 11th day of employee’s working incapacity, in the case of a self – employed person and a voluntarily insured person from the 1st day of a temporary working incapacity until the end of the working incapacity, or until the recognition of invalidity, no longer than 52 weeks from the commencement of the temporary working incapacity. The calculation method of a daily amount of the sickness benefit has been simplified and unified for employees, self – employed persons and voluntarily insured persons. During the temporary working incapacity, the employee´ s income replacement is during the first ten days provided by an employer, the sickness benefit is then provided by the SIA from the 11th day.

Sickness benefit is provided per days, in the first 3 days the benefit equals to 25% of the daily assessment basis, from 4th day of the temporary incapacity for work the cash sickness benefit is 55% of the daily assessment basis.

Additional Benefits in Slovakia

Unemployment Insurance

When unemployed, the respective person can register at the unemployment office. If unemployment insurance contribution was paid for 730 days at least over past 3 years, they have the right to get financial support for a maximum of 6 months. Contribution is a mandatory part of the taxes paid by the employee and employer based on the salary.

Workplace Canteens or Meal Vouchers

The employer is obliged to arrange for lunch (or other type of meal, depending on the respective operation, such as the 24h/7days shifts) or to offer meal vouchers instead. The employer must bear 55% of the costs at a minimum. Many employers offer more, up to 100%. The minimum value of the vouchers is prescribed by the government.

Pension

The pension funding in Slovakia is based on mandatory contributions from salary. Both the employer and employee have to contribute, and the system is very much automated. The compulsory system has 2 pillars. The 1st pillar contributions are paid to the state fund called Socialna poistovna (the Social Insurance Agency). The 2nd pillar offers choices consisting of Socialna poistovna or several other private licensed providers. Each provider offers several investment funds with various degrees of investment risk.

General market practice benefits/additional allowances

Wonderfully located smack dab in the middle of Central and Eastern Europe, Slovakians enjoy the political and economic stability that surrounds them by sharing national borders with the countries of the Czech Republic, Austria, Poland, Ukraine, and Hungary. This central location makes Slovakia an ideal country for imports and exports across the continent, particularly from the western portion of the country where infrastructure and transportation networks are the most advanced.

The good news for foreigners is that there are no restrictions on who can create a corporate entity within Slovakia, meaning non-citizens can legally establish a business within its borders. Crucial to the protection of foreign investments, these new business owners have the ability to take advantage of international arbitration, mutual protection of investments, and access to civil legal proceedings should they be required.

A simplified tax system is enjoyed by corporations with their base in Slovakia due to the tax reform of 2000 which created favorable circumstances for foreign investments. Since the reform, companies such as Dell, HP, and Sony have enjoyed a corporate tax rate of only 22%. Companies must now pay a fixed amount of tax that does not include dividends received from abroad. This system allows anyone who establishes their business in Slovakia to take advantage of a significant tax benefit that they would not otherwise receive if they established business elsewhere. 

Slovakia Holidays

There’re 15 Public Holidays in Slovakia: 

  • Republic Day
  • Epiphany
  • Good Friday
  • Easter Monday
  • Labour 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
  • 2nd Day of Christmas.

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Slovakia

  • Working hours in Slovakia

    The maximum weekly working time is 40 hours, employees working on the basis of a two-shift system may work up to 38,75 hours per week and employees working on a three-shift system or who are involved in continuous operation may work up to 37,5 hours per week. It is also possible to agree on an uneven distribution of working time with the representatives of the employees. 

  • What are the main holidays in Slovakia?

    • Republic Day
    • Epiphany
    • Good Friday
    • Easter Monday
    • Labour 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
    • 2nd Day of Christmas.
  • What are payroll taxes in Slovakia?

    • Payrolls and contribution of employee in total – 13,40%
    • Payrolls and contribution of employer in total – 35,25%
  • Hannah Kohl
    Author:
    Hannah Kohl. Head of Customer Success. Has extensive experience in the HR and IT industries. Helped 100+ international clients to achieve their global goals.

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