Guernsey is a self-governing Crown dependency in the English Channel with favourable business opportunities for those seeking to expand to the Channel Islands. It is not part of the UK, but is a highly developed jurisdiction with its own legislature and employment legislation, which can differ from the UK and Europe. Employers who need to hire staff in Guernsey without establishing a local company entity can use the services of an Employer of Record (EOR).

The EOR will grant you the legal right to employ staff in the Bailiwick of Guernsey, and will take care of all aspects of remaining compliant with the employment legislation. An EOR service like Remote People will manage your payroll, regulatory and other employment requirements.

How to Hire Employees in Guernsey

Companies looking to build a team in Guernsey have three primary pathways to consider, each with its own set of benefits, challenges, and legal implications.

Setting Up a Local Entity

Traditionally, hiring in Guernsey has meant setting up a local legal entity, usually a limited company. The process involves registering the business with the Guernsey Registry, opening a local bank account and registering with the Guernsey Revenue Service for tax and social security purposes.

Although setting up an entity provides the company with a permanent and official footprint on the island, it is a costly process. It also requires a considerable administrative effort and knowledge of Guernsey’s corporate/company law. In addition, the process can take several weeks or even months, delaying the company’s market entry and its ability to hire the required talent quickly.

Working with an Employer of Record (EOR)

A more modern and agile approach is to work with a Guernsey Employer of Record. This allows companies to hire employees in Guernsey without setting up an entity. An EOR provider with an established legal presence in Guernsey legally hires the employee on your company’s behalf. The EOR takes on all statutory employer responsibilities such as creating a compliant employment contract, processing payroll, withholding tax and social security and managing employee benefits.

This solution allows for faster time to market, reduced administration and guarantees compliance with Guernsey’s employment laws on day one. This service is perfect for companies trialing the Guernsey market, recruiting a small remote team or where speed of onboarding is essential.

Learn more about Employer of Record services

Hiring Independent Contractors

Although hiring workers as independent contractors might appear to offer a less strict and more flexible arrangement, there are also substantial compliance risks for worker misclassification.

The authorities in Guernsey, as in many other jurisdictions, have strict guidelines as to when a worker is a genuine contractor, as opposed to a “deemed employee”. If the relationship is deemed to be in name only, and if a contractor is in reality working in a manner that is typical of an employee, and subject to the direction and control of a company, then the authorities can reclassify the arrangement. 

The arrangements with other contractors may be retrospectively scrutinized. This can give rise to significant liabilities for back-dated social security contributions and unpaid taxes, along with the risk of fines. For this reason, taking this route without appropriate legal advice is very high-risk.

Guernsey EOR vs Legal Entity in Guernsey

There are various factors that will influence a company’s decision to use an Employer of Record or establish a legal entity in Guernsey. These include their long-term intentions, available budget, and risk tolerance. The former provides a long-term solution and an entity to anchor your operations to, whereas the latter is much quicker, but comes with the fixed costs of incorporation.

For big companies planning on a large scale and over an extended period of time, incorporation may be the better choice. However, it does require a big initial investment, takes time and comes with significant ongoing administrative requirements. These include maintaining all aspects of local corporate governance, annual filings, and HR responsibilities such as local payroll administration.

The Guernsey EOR is the opposite of this and is all about agility. A company can have an employee legally employed and compliant with local Guernsey employment law within days, as opposed to months. An EOR model also offloads all of the compliance overhead to the EOR provider. This mitigates the risks of any non-compliance with local labour laws by outsourcing to specialists.

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Using an Employer of Record in Guernsey

Hiring through an EOR is quick and straightforward in Guernsey. A client company first chooses a candidate that it wants to hire and partners with an EOR provider that has a presence in Guernsey. An employment contract that is compliant with local laws and regulations is drafted by the EOR, which sets out the terms and conditions of employment. The EOR and the employee co-sign the contract, and the employee is hired.

The employee is added to the EOR’s Guernsey payroll, from which the EOR calculates and withholds the appropriate social security and income tax (Employee’s Tax Instalment Scheme) contributions and remits these to the Guernsey Revenue Service. The EOR also administers statutory and supplementary benefits, tracks leave entitlements and manages all other HR administrative functions. 

In summary, the EOR is the legal employer of the employee, and the client has complete operational control, directing the employee’s daily tasks, responsibilities, and performance.

How Much Does a Guernsey EOR Cost?

EOR fees in Guernsey will usually consist of a monthly per-employee fee, plus a set-up or extra service fee for work permits, benefits, or specific support. Fees will vary according to employee seniority, chosen benefits, and the complexity of the services provided. While the fees may appear higher than setting up locally, EORs provide savings on setup, back office management, administrative overhead, and compliance risk.

Cost should always be compared with setting up a local entity, taking into account not only the direct costs but also hidden costs in terms of time (managing the entity, compliance risk, and operational complexity). EOR may look more expensive on a per-employee basis, but there are no setup fees, no back-office, no admin overhead, and no risks in terms of compliance.

Employers looking to hire through a cost-effective and reliable EOR provider should contact Remote People today. We offer the most cost-effective EOR solutions in the market, starting at $199 per employee.

Employment and Labor Laws in Guernsey

Guernsey is a self-governing Crown Dependency of the United Kingdom with its own legislature, government, and legal system. Employment law on the island is separate from employment law in the UK, with a separate structure.

The main statutes include the Conditions of Employment (Guernsey) Law, 1985, which requires written terms of employment and the Employment Protection (Guernsey) Law, 1998, which deals with rights to dismiss and notice periods. There is also the Minimum Wage (Guernsey) Law, 2009, and rules concerning family leave also form part of the laws and statutes dealing with employment rights in Guernsey.

Most recently, reforms undertaken in Guernsey indicate that the Island is keen to update the level of protection offered in relation to the modern workplace. Phase 1 of the Prevention of Discrimination Ordinance, 2022, came into operation on 1 October 2023 and, when fully enacted, will prohibit discrimination on the grounds of disability, carer status, race, religion or belief and sexual orientation.

Employment Contracts

Employment contracts are agreements which stipulate the conditions of work and may be written, oral or implied. Contracts of employment include permanent, fixed term, part-time and casual contracts and may include conditions relating to pay, hours of work, annual leave and notice periods, benefits and other details so that both parties are aware of their rights and responsibilities.

Although an oral agreement is sufficient to form a contract, under Guernsey law, an employer must, within four weeks of the commencement date of the employment, give an employee a written statement of the principal terms of their employment. The written statement must include at least the following:

  • The full names of the employer and employee
  • The date the employment began
  • The job title or a brief description of the work
  • The place of work
  • Salary details, including the rate and frequency of payment
  • Normal working hours
  • Holiday and leave entitlements
  • Sick leave and pay arrangements
  • Pension details
  • The required notice period for termination

Working Hours

Guernsey has no statutory maximum working hours limit, unlike the UK or EU Working Time Regulations. Full-time work typically follows a 35 to 40 hour week across 5 days, though this can vary depending on the terms of the employment contract. Working hours must be clearly documented in the contract of employment.

While no cap applies, health and safety legislation requires employers to ensure working hours remain reasonable and that employees receive adequate rest. Minimum entitlements include 11 consecutive hours of rest between shifts and one full day off per week. Night work requires a risk assessment to be carried out. Employers are advised to document shift patterns as part of their compliance records.

Public Holidays

Guernsey has nine public holidays per year, they are as follows:

  • New Year’s Day 
  • Good Friday 
  • Easter Monday 
  • Early May Bank Holiday 
  • Liberation Day (May 9th) 
  • Spring Bank Holiday 
  • Summer Bank Holiday 
  • Christmas Day 
  • Boxing Day 

There is no requirement for the days to be given as paid holidays. The employment contract should state whether the public holidays are to be counted as part of the annual leave entitlement or in addition.

Remote Work and Flexible Working

Employees who have completed 12 months of continuous service are entitled to request flexible working arrangements. Employers are required to consider such requests reasonably, though there is no statutory right to work remotely. Any remote working arrangement is contractual and should be documented in writing.

Guernsey’s data protection legislation, which mirrors GDPR, applies to employees working from home. Employers should ensure appropriate data security measures are in place, including clear BYOD (bring your own device) policies where personal devices are used for work purposes. Remote workers based in Guernsey retain their Guernsey tax residency status regardless of working arrangement.

Overtime

There is no statutory right to overtime in Guernsey. Overtime is purely a matter of contract. If an employer requires an employee to work overtime and to be paid for it, that must be a term of the contract of employment. The contract should set out what the rate of pay will be, if it is different from the normal rate (for example, 1.5 times the hourly rate of pay). If it is not stated in the contract, there is no legal requirement for an employer to pay overtime.

Social Security Contributions

Employers pay social security contributions for their employees at a rate of 7.0% (Class 1) of their gross earnings, based on the monthly Upper Earnings Limit of £15,717 in 2025. This is spent on pensions, sickness benefit, unemployment protection and other social insurance schemes.

Probation Periods

Guernsey law does not limit probation periods (typically 3–6 months) during which employers and employees can evaluate their suitability. There is no statutory maximum, but the period must be reasonable. Notice periods during probation are normally less than the usual contractual period of notice and should be clearly stated in the contract.

Payroll and Employment Taxes in Guernsey

Payroll Cycle

Guernsey payroll may be processed in cycles to ensure employees are paid regularly, usually monthly, but also sometimes weekly or twice a month. Predictable payroll dates can be planned and budgeted for by both the employer and the employee.

Calculating wages and deductions in Guernsey, such as income tax, social security and other statutory deductions and then submitting these to the relevant authority in a timely manner is key for payroll administration. This can be handled automatically by payroll software, but when done manually, it must be done with particular care.

There are also year-end obligations for Guernsey payroll administrators which include making annual returns and issuing documents to employees relating to their tax affairs. Employers also must keep payroll records in order to meet reporting obligations and respond to any employee or other inquiries.

Minimum Wage

Guernsey’s minimum wage applies to all workers across all industries and business sizes, whether employed by a company or a private individual. Rates are reviewed annually, with the next review scheduled for September 2026.

Worker Category Minimum Wage (per hour)
Adults (18 and over)£12.60
16 to 17 year olds£11.35
Under 21£7.50
Apprentices£5.50

Where an employer provides accommodation or meals as part of the employment package, a statutory offset may be applied, up to a maximum of £113 per week for accommodation only and £158 per week for accommodation and food. Any deduction beyond the statutory offset cannot reduce pay below the legal minimum.

Income Tax

Guernsey operates a flat income tax rate of 20% on worldwide income for resident individuals, administered by the Guernsey Revenue Service. A personal allowance of £15,200 applies for the 2025-26 tax year, meaning income below this threshold is not subject to tax. Non-residents are taxed at the same 20% rate but only on Guernsey-sourced income.

Unlike the UK, Guernsey does not levy National Insurance contributions, making it a relatively straightforward tax environment for both employers and employees. The tax year runs from April 6 to April 5.

Employer Tax Contributions

Employers contribute 7.0% in social security on employee earnings between £797 and £15,717 per month, based on the Upper Earnings Limit effective October 2025. These contributions fund pensions, sickness benefits, unemployment protection, and other social insurance programmes.

In addition, employers are required to contribute 1.0% under the Your Investment Plan (YIP), a mandatory auto-enrollment pension scheme introduced on January 1, 2025. Employees also contribute 1%, and while auto-enrolled by default, they may opt out within 30 days of enrollment.

Employee Tax Contributions

Employees have to contribute to social security at the rate of 7.4% of gross earnings, again up to the same Upper Earnings Limit. Employers must also deduct income tax under the Employees Tax Instalment (ETI) scheme. 

Pension System

Guernsey has a mandatory second-tier pension scheme called Your Island Pension (YIP). Employers are legally obliged to automatically enrol eligible staff into the scheme or an approved alternative qualifying pension plan. As of 2025, there are phased rates of contributions payable by both the employer and employee as a percentage of earnings. 

For example, an employer needs to contribute a minimum percentage to the employee pension (rising year on year) with the employee contributing a matching percentage. This is one of the areas where an EOR would expertly manage your compliance.

Bonus Payments

Bonuses are widely used in Guernsey, particularly in the finance industry. They can be either contractual or discretionary. If a bonus has been specified as a term in an employment contract, then it will be a contractual entitlement. 

Guernsey does not have any statutory 13th-month pay.  Discretionary bonuses are given at the employer’s discretion, but this must be done in a non-discriminatory manner. All cash bonuses are treated as earnings for social security and income tax purposes and will be deducted accordingly.

Tax Compliance and Payroll Reporting

The employer is responsible for payroll tax and the remittance of taxes to the Guernsey Revenue Service. This includes withholding or deducting employee social security contributions and ETI payments from wages and remitting both, along with the employer’s contributions to the Revenue, each month. For this purpose, payroll calculations need to be accurate, and payments need to be made on time.

In addition, payroll records and reports need to be kept and submitted to the Revenue in accordance with their requirements. Payslips need to be issued to each employee for each pay period to show the deductions from wages of social security and tax and net pay. Employers also need to issue annual statements and returns at the end of the tax year, which account for total wages, contributions and taxes withheld.

Work Permits and Visas in Guernsey

Guernsey has its own immigration policy, governed by the Population Management Law. All non-local residents require an Employment Permit to live and work in the Bailiwick. Permit eligibility is based on nationality, the nature of the job, and whether or not it is on the Approved Posts List. 

The Employment Permit is granted on one of three bases: Long-Term (up to 5 years), Short-Term (up to 6 months), and Seasonal. Employers are responsible for application through the Population Portal and adherence to the conditions of the permit.

Partnering with an EOR provider like Remote People can make this process much easier.

Critical Skills Employment Permit

Guernsey doesn’t have a permit under the name “Critical skills employment permit.” There is a permit called Long Term Employment Permit (LTEP), which is granted for specific occupations where there is an identifiable shortage of people with the necessary skills and/or qualifications in the local labour market.

There is an ongoing shortage of such skilled workers both in Guernsey and in the UK. LTEPs are granted for a period of up to 8 years and will be conditional upon a specific full-time job and a specific employer. LTEP holders can live in Open or Local Market accommodation and can bring dependent family members

General Employment Permit

General Employment Permits cover general jobs that are not covered by specific categories. An employer needs to be able to show that they have tried to advertise locally, and that no Guernsey or UK citizen or resident was suitable for the post. 

Applications must include a complete job description, evidence of advertising and recruitment in Guernsey, and reasons for the position needing to be filled by an international candidate. Salary, necessary qualifications, and experience are taken into consideration, and supporting documentation must be thorough in order for the application to be processed in a reasonable time frame.

Intra-Company Transfer Permit

Guernsey does not have a specific “Intra-Company Transfer Permit”. However, employees who are being transferred to Guernsey as part of a multinational company’s internal operations may be eligible for either a Short-Term or a Long-Term Employment Permit, depending on their job role and period of stay.

The employer must demonstrate that the position cannot be filled by a local person, that the employee has skills vital to the company’s operations, and provide evidence of the nature of the corporate relationship between the parties and the reason for the transfer. In practice, the Intra-Company Transfer route can sometimes be processed more swiftly, but full supporting evidence of suitability is still required.

Time Off and Leave in Guernsey

Mandatory Leave Entitlements

Employees in Guernsey are entitled to a statutory minimum of 28 days (5.6 weeks) of paid annual leave per year. This entitlement includes the 8 statutory bank holidays unless these are provided separately by the employer. Employees who join mid-year have their leave entitlement calculated on a pro-rata basis using the formula: 28 × months worked / 12.

Unused annual leave may be carried over up to a maximum of 5 days into the following year, subject to the terms of the employment agreement. Any remaining untaken leave must be paid out to the employee upon termination.

Maternity and Paternity Leave

The statutory entitlement in Guernsey is 12 weeks’ maternity leave, two of which are compulsory after childbirth. This can be extended to up to 26 weeks for employees with 15 months’ service. Partners have a right to take two weeks’ maternity support leave, and employees have protected time off for antenatal appointments.

Employees are entitled to return to their job or, where that is not possible, a suitable alternative. The employer is responsible for ensuring that employees are not unfairly dismissed or discriminated against.

Sick Leave

Guernsey has no statutory sick pay obligation. Unlike the UK, employers are not legally required to pay wages during a period of sickness absence. In practice, many employers include contractual sick pay provisions within employment contracts, so entitlements vary depending on the individual agreement.

Employees who qualify may be eligible for a Sickness Benefit allowance provided by the States of Guernsey’s Social Security department. Employers are required to notify Social Security when an employee is absent due to illness in order for the employee to access this support.

Other Leave

Other types of leave are not as well defined in Guernsey law and practice as they are in many different jurisdictions; however, there is a recognised entitlement to other types of leave.

For example, there is a right to take reasonable time off for emergencies involving dependents, even if these are unexpected.

Bereavement leave is not a paid entitlement under statute, but most employers allow a few days paid compassionate leave as a matter of good practice.

Employee Benefits in Guernsey

A competitive benefits package can be an essential part of attracting and retaining talent in Guernsey. Benefits include statutory benefits, such as social security contributions, the secondary pension scheme (YIP) and statutory leave entitlements. 

Additional ‘supplementary’ benefits can include: private health insurance, additional pension contributions, life insurance or death in service cover, dental and vision plans and flexible working arrangements.

Hiring Contractors in Guernsey

Hiring contractors in Guernsey is a more flexible option for the employer. However, if the work done by a contractor appears to be that of a normal employee, then the authorities will reclassify it as such, with the normal consequences of back taxes and social security payments, as well as fines being imposed. It is recommended that you take legal advice.

Terminations and Severance in Guernsey

Ending an Employment Contract

In the state of Guernsey, an employee’s right to terminate their employment is covered by the Employment Protection (Guernsey) Law 1998, which prescribes minimum notice periods for termination. Additionally, termination can occur via resignation, agreement, redundancy or dismissal. 

Notice Periods

The law provides for a minimum statutory period of notice that the employer and employee must give to end the contract. The minimum notice the employer must provide is dependent on the employee’s length of service:

Length of ServiceNotice Period
Less than 2 years1 week
2–5 years2 weeks
Over 5 years4 weeks

Severance Pay

Severance pay is not a common requirement in Guernsey, unless it’s for redundancy. If an employee has two or more years’ service, they are entitled to a statutory redundancy payment based on age, service and weekly pay. An EOR will ensure any procedures and payments are in line with Guernsey law.

Expand into Guernsey Easily with Remote People’s Employer of Record (EOR) Solution

Expanding into Guernsey is a great opportunity for business owners. However, dealing with employment regulations can be overwhelming for foreign business owners. This is why partnering with a reputable EOR provider like Remote People can be a wise choice. We handle all the paperwork and compliance while you focus on growing your business.

Frequently Asked Questions

No. Guernsey is a self-governing Crown dependency with its own employment legislation, separate from UK and EU law. This means UK rules such as the Working Time Regulations and statutory sick pay do not apply. Employers must comply specifically with Guernsey's Employment Protection (Guernsey) Law and related legislation.

Yes. UK and international companies can hire in Guernsey through an Employer of Record, which handles payroll, social security contributions, and compliance with local employment law without requiring a local entity.

Yes. Contractors are not entitled to employment protections such as annual leave, sick pay provisions, or unfair dismissal rights. Misclassifying an employee as a contractor can expose an employer to liability for unpaid social security contributions and back-dated employment entitlements.

Yes. The Employment Protection (Guernsey) Law prohibits discrimination on grounds including sex, race, disability, age, and religion. Employers must ensure hiring practices, contract terms, and workplace policies comply with these protections.

Guernsey does not have a statutory redundancy pay scheme equivalent to the UK's. Redundancy entitlements are determined by the employment contract or any applicable collective agreement. Employees with at least one year of continuous service are protected against unfair dismissal, meaning employers must follow a fair process regardless of whether statutory redundancy pay applies.

Guernsey law does not prescribe a mandatory probationary period, but employers commonly include one in employment contracts, typically ranging from 3 to 6 months. During this period, shorter notice periods may apply as agreed in the contract. Unfair dismissal protections do not apply until the employee has completed one year of continuous service.