- Overview: Slovakia
- Global PEO and Payroll
- Global HR Compliance
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global PEO and Payroll in Slovakia
Getting your business up and running in Slovakia can be challenging, especially if you do not speak the native language. Establishing your own business entity in Slovakia is an option to be considered as you expand abroad. But before you invest valuable resources in setting up a business in Slovakia, you should be fully aware of the risks involved.
Acumen’s Global PEO and Payroll solution was designed especially for companies like yours to smooth the way for quick, easy, and risk-free business operations in Slovakia without establishing a legal business entity.
Why Partnering with Global PEO Is a Win-Win Solution For Businesses
As your business grows and changes, its needs also change. To stay competitive in the ever-changing global business environment, you need to focus on growing your business while ensuring that it is legally compliant with the requirements of each foreign market you enter. This can be a huge challenge for even the most organized entrepreneur. Suppose you are looking for an alternative to hiring an entire HR and legal department to handle these responsibilities for your company. In that case, you may want to consider working with a global PEO (Professional Employer Organization).
This type of organization is specifically designed to take over management of your company’s human resources function so that you can focus on running your business. A global Professional Employer Organization provides the necessary tools and services to run a profitable global operation without worrying about employment laws and tax issues or maintaining compliance with government regulations. A global PEO’s most important benefit is relief from some of the biggest global employment and HR compliance headaches and risks.
12 Burdens a Global PEO Can Relieve for Your In-House HR Department
- Global expansion complexity
- Global payroll administration
- Employee benefits administration
- Drafting compliant employment contracts to adhere to local labor and tax regulations in 190 countries
- Lengthy onboarding
- Complex and risky offboarding
- Background checks
- Workforce compensation administration
- Compliance assistance
- Guidance on best practices of voluntary benefits provisioning
- Immigration and relocation support for your ex-pat workforce, such as visa sponsorship and securing work permits
- Convert local contractors into full-time employees
What is a Global PEO?
A global PEO (Professional Employer Organization) is an arrangement between a company and a third-party global employment solutions provider who takes on all of the HR functions on behalf of the client. This could include handling global payroll to employee benefits, immigration support, providing guidance on local labor and tax legislation, and HR best practices. The PEO will ultimately provide services that help you better run your business, which in turn can help you focus on the tasks at hand.
A global PEO will relieve you of many of the global employment responsibilities associated, including
- Compliant hiring and firing of employees
- Managing the employee benefits system
- Handling payroll and benefit plans
- Reporting payroll taxes
- Any legal issues that may arise in your workplace
What’s the Difference between a PEO and an EOR in Slovakia?
Shared vs. Sole Liability
An employer of record (EOR) is the legal employer of employees. They are responsible for all the liabilities and obligations associated with working for them, whereas a PEO operates through a co-employment model. This means that while a PEO shares ownership and liabilities, the EOR assumes all liabilities for the workers.
Shared vs. Sole Control over Employment
The other big difference between PEOs and EORs is in the way that they function with regard to hiring workers. With a PEO, you retain many rights and responsibilities over who you hire. An EOR, on the other hand, takes full responsibility for hiring workers – a role often provided by staffing agencies.
Global PEO and EOR Comparison
|Employment Model||Co-employer||Sole Employer|
|Permanent Establishment Factor||Can only work with clients who have a registered in-country (state) entity||Facilitates foreign expansion without setting up an entity|
|Key Services||Global employment, payroll, benefits, immigration (visa, work permits), mobility||Global employment, payroll, benefits, immigration (visa, work permits), mobility|
|Responsibilities||Responsible for the entire array of HR functions||Responsible for a portion of HR functions|
|Tax Administration||Depending on local tax regulations may require taxes to be filed under the client’s taxpayer ID||Files taxes under own Taxpayer ID Number|
|Payroll Funding||Requires advanced payments from the client||Provides payroll funding|
|Local Entity Establishment||Required||Optional|
|Local Entity Ownership||Does not own the entities. Instead, partners with a local or global third-party provider. A PEO does not allow you to hire in countries where you do not have a local entity.||100 % owns legal entities in the country of service. Allows to hire a workforce in other countries without setting up a business entity|
|Liability||Shares responsibilities and liabilities||Assumes all responsibilities and liabilities. EOR hires the employees in the new country under its local business entity and takes on all of the legal risks.|
|Legal Advice||Optional||100% compliance required|
|Global Labour & HR Compliance||Optional||100% compliance required|
|Insurance||May require the client to provide their own insurance.||Provide general liability (GL) and workers’ compensation (WC) insurance coverage.|
|Benefits||Provides higher quality employee benefits at competitive prices||Provides higher quality employee benefits at competitive prices|
|Employment Agreement||The client must draft and sign the employment agreement with an employee.||Drafts and signs the employment agreement directly.|
|Pricing Structure||– Fixed monthly fee per employee
– Percentage of payroll plus applicable taxes
|– Fixed monthly fee per employee
– Percentage of payroll plus applicable taxes
How to Choose a Global PEO (Professional Employer Organization) in Slovakia
When looking for a professional employer organization (PEO), it can be difficult to know which one will be the best fit for your business. What questions should you ask? What are some red flags? And what do you look for in an international PEO?
The short answer is: carefully. You need to find a global PEO company that can address your industry’s challenges. The needs of each business are unique, and the same goes for international PEOs. A good global PEO has a strong track record and fiscal stability that can provide comprehensive support and compliance expertise. Make sure they offer services and coverage in all your business areas. Get references from other clients in your industry to ensure you make the best choice for your business.
Simplifying Global Employment with a Professional Employment Organization
Many things can go wrong when you try to find employment overseas. Acumen International can help you navigate these challenges, but you must be aware of the potential obstacles you may face.
As a Global PEO, our role is to enable organizations to quickly and easily hire employees in any country. We take care of all the employment-related details so that our clients can focus on their business goals. However, if candidates are unhappy at any stage, the whole arrangement can fail.
When deciding to move abroad for work, your selected candidates consider several factors. The visa and work permit process complexities, currency fluctuations, lifestyle choices, and family considerations can all impact their final decision.
As a PEO, we understand that you must put your employees’ needs first when expanding your business globally. Considering this move’s impact on their lives, it’s essential to think outside the box and ensure they are comfortable and supported at every step.
“It has become critical for organizations to understand applicable laws and regulations concerning issues such as minimum wages and benefits, employment standards, immigration, and labor relations in each location. A Global PEO can play an important role in helping organizations navigate this complex global employment landscape by offering reliable and country-specific solutions and expert advice on compliance-related matters,” says Nick Ganzha, CEO and founder at Acumen International.
Acumen Global PEO can help you solve the complex puzzle of global employment. As a Global PEO partner, we help businesses meet all their HR needs while also handling compliance issues specific to the international arena. By offering comprehensive global employment solutions and reality checks about the compliance aspects of employing staff across the globe, we can be an important resource for your in-house HR and Management teams.
Global Payroll Calculator: Accurate Global Employment Cost Estimation
When hiring employees and contractors across the globe, you may not be choosing the most cost-effective and business-friendly country.
- Do you know which country is the most cost-effective place to hire employees?
- What are the costs of entity establishment and legal representation?
- What are the payroll costs and management fees?
- What are your ongoing annual tax compliance costs?
- Are you fully aware of banking implications?
- Did you know that labor laws and hidden costs could make your company less efficient when choosing a country to run your business?
- Did you know that there could be a more cost-effective country to hire employees in and save up to 50%?
This is because countries have different labor laws, compliance, and tax regulations. What if, instead of limiting your company’s international expansion by cutting through the jungle of local regulatory compliance, tax, labor, and immigration requirements, you could have all the information of 190 countries at your fingertips?
Acumen International offers the Global Payroll Calculator to help businesses understand the compliance requirements for conducting business in a new country. Acumen’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.
Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.
International Global Payroll and Taxation in Slovakia
Employment-related Taxes in Slovakia
Resident/Non resident. A tax resident of the Slovak Republic is subject to tax on worldwide income, irrespective of whether the income is remitted to the Slovak Republic.
A Slovak tax non-resident is liable to tax on Slovak-source income only. Slovak-source income includes income from work performed in the Slovak Republic, including director’s fees, income from an independent business done through a permanent establishment (PE), and income from services carried out in the Slovak Republic. Slovak-source income includes interest, license fees, and income from selling or renting a property in the Slovak Republic.
Payroll Cycle in Slovakia
A salary shall be due in arrears for a monthly period by the end of the previous calendar month unless agreed otherwise in the collective agreement or the employment contract.
Non-payroll Taxes in Slovakia
Value-added tax (VAT). A basic VAT rate applies to all taxable supplies, with certain exceptions. Certain medical products, printed materials and media, various foodstuffs, and ’basic goods’ (e.g., milk, butter, meat) are classified under selected codes of the Common Customs Tariff, and some accommodation services have a lover VAT rate.
The threshold for obligatory VAT registration for taxable persons with their seat or permanent address, place of business, or VAT establishment in Slovakia is a turnover of 49,790 euros (EUR) for the previous consecutive 12 calendar months. Voluntary registration is also possible.
More taxable persons established in Slovakia (i.e., with a seat, place of business, or VAT establishment in Slovakia) can create a VAT group if certain conditions are met.
A VAT registration obligation in Slovakia arises for foreign persons (taxable persons without a seat or VAT establishment in Slovakia) before commencing activities subject to Slovak VAT where they could be liable to pay Slovak VAT, except an import of goods. There is a list of supplies that foreign taxable persons can perform in Slovakia without a need to register for Slovak VAT, including mainly:
- Supplies subject to VAT reverse-charge
- Supplies subject to triangulation simplification performed by the first customer in a chain
- Intra-Community supplies of imported goods if represented by a tax representative
- VAT-exempt transport and supplementary services related to export and import
- VAT-exempt supplies without credit entitlement.
This list, among others, includes local supplies of goods and specific services to taxable persons established in Slovakia as such supplies are subject to the local VAT reverse-charge mechanism (i.e., the person liable to pay VAT on such supplies is the customer).
Disclaimer: Any of the above information is subject to changes imposed by Slovak laws. To get the latest updates on taxation in Slovakia and in 190 countries worldwide, contact Acumen’s team of global employment experts.