Employer of Record in Georgia

How an Employer of Record Works in Georgia

An Employer of Record (EOR) in Georgia provides a way for foreign companies to hire employees in the country without setting up their own local entity. The EOR takes over the role of legal employer, dealing with onboarding, handling compliance, and managing the relationship, while the foreign employer manages the day-to-day operations.

Rivermate provides EOR services in Georgia, and our local partners provide expertise in HR and have deep knowledge of employment rules in the country. We make it easy to hire quickly and compliantly anywhere in Georgia.

Georgia labor market: At a glance

The hiring market
Greatest hiring activity:	Tbilisi and Batumi.
Hiring timelines:	About one week for local employees; up to 40 days for foreign nationals.
In-demand sectors:	Technology, sales, and marketing.
Sectors with skills shortages:	Very niche tech skills.

The salary market
Employer tax contributions:	2% pension contribution.
Minimum wage:	GEL 20 per month.
Average gross annual salary:	About GEL 28,700.
Income tax brackets:	20% flat rate. 5% for employees working for a company with International Company status.

What it costs to hire an employee in Georgia

There are several factors to consider in terms of costs to hire an employee in Georgia. Here’s a breakdown of the most important.

Employer contributions

One of the major benefits for employers in Georgia is that contributions are low. Employers pay just 2% for each employee’s pension, while employees pay a further 2%.

In practice, the pension applies only to local employees, where it is legally required for citizens and permanent residents. Most expats are not enrolled in the scheme, so employers don’t make any contributions for foreign workers in the country.

Salary and minimum wage

The Georgian lari (GEL) is the only legal tender in Georgia, and employers must state the salary in the contract and pay it in lari. In practice, employers pay the salary into a local bank account at least monthly. A late payment penalty of 0.07% of the amount applies for each day it is delayed.

According to our in-country partner, the average salary in Georgia for digital roles is the equivalent of about €1,500. The national average across all sectors is lower, at GEL 2,389 (about €800). In general, salaries also tend to be lower than the average across Europe, and our partner estimates they are about 30–60% lower on average.

There is a minimum wage of GEL 20 per month in Georgia. However, this is in name only, as it has not been updated since 1999. In practice, the market sets pay rates.

Income tax

The standard personal income tax is 20% of the employee’s salary, which is withheld by the employer. However, there is a separate income tax rate of 5% that is applicable in some situations.

If a company holds International Company status, employees working at the company only pay 5% income tax. Eligibility depends on the activities of the company, and it must carry out activities on the government-approved list.

The Virtual Zone regime does not affect salary tax, so income tax remains at 20%.

Termination

Dismissals in Georgia require a valid reason from the Labor Code list. If a dismissal is found unlawful, the employee may be reinstated or receive compensation and lost earnings. In practice, our expert local partner says that when an employer dismisses an employee without good cause, they usually pay a one-month settlement.

Employee leave

Employees are entitled to 24 working days of paid annual leave. If an employer ends the employment agreement, they must pay out any unused leave. Employees can request leave any time after 11 months of service, unless there is an agreement in place between the employer and employee to take leave sooner.

Sick leave is something that often surprises foreign employers. When an employee is ill, their absence can be unpaid unless the contract states otherwise. Under the Labor Code, an employer can end employment due to long-term incapacity after 40 consecutive days or 60 days within a six-month period, and only after annual leave has been used up.

Overtime

Overtime is paid at an increased rate, but there is no legal set rate and it is instead written into the employment contract. Overtime includes work an employee carries out on a public holiday.

Employer cost calculator

Our employer cost calculator will provide you with a clear idea of the total employment costs in Georgia.

What hiring in Georgia really looks like

Market condition	What an employer needs to know
Talent availability	No shortages of skilled talent, especially in Tbilisi and Batumi.
Top-paying sectors	Financial, insurance, information and communications (ICT).
Hiring foreign nationals	A work permit takes up to 30 days.
Key employer challenge	Hiring expats requires a turnover of GEL 50,000 for every foreign employee.

There are no shortages of skilled talent in Georgia for tech, marketing, and sales roles, but very niche tech skills can be trickier. According to our local partner, English is spoken widely in digital roles, and you can also find German and Spanish speakers.

Tbilisi, the capital, is where most hiring happens, and plenty of talent is available. Batumi is another important hub, and it’s particularly popular with Russian-speaking candidates. Both hubs are popular with remote workers, and remote work is very common in the country as a whole, with employers often allowing people to work from home.

In general, the workforce is loyal, provided employees have stability in their roles and room to grow. In such cases, they often stay for several years.

Georgia is more flexible on onboarding, termination, and severance than other countries in the region. Employer costs are also low, at just 2% on top of salary, and salaries are more affordable too. It’s also strategically positioned between Europe and Asia.

Country-specific problem that employers must know about

Many companies want to know why they shouldn’t just hire freelancers in Georgia instead of using an EOR, and our local partner has had to answer this question many times.

In short, hiring freelance workers is only a suitable option for very short-term projects, under six months. It must also be a genuine freelance contractor relationship rather than an employee-employer relationship in disguise.

If you engage someone for a year or two and pay them the same amount each month, authorities will likely treat it as employment. This could have serious repercussions, including fines, because you are avoiding employment taxes.

Foreign employees may want to avoid the cost of an EOR and just pay the freelancer, but they often lack the knowledge to pay employees compliantly. Overall, using an EOR is the safer option to ensure compliance.

Compliance risks in Georgia that employers should know about

Contracts

Contracts can cover a trial period of employment that usually lasts from 3–6 months, with the legal maximum being 6 months, and this can then be extended with one-year extensions. After 30 months of fixed-term contracts with the same employer, the contract becomes permanent, and the employment becomes harder to terminate. So don’t assume you can keep extending contracts indefinitely. However, you can also have permanent contracts from the start of employment.

Terminating employment

During the trial period, you can end the employment with two weeks’ notice and no reason. After the trial period comes to an end, you must give the employee one month’s notice, and you also need a valid reason from the list in the Labor Code.

For reasons like business changes, long-term incapacity, and insufficient skills, you must give 30 days’ written notice as well as paying at least a month’s severance. Alternatively, you can give three days’ notice and pay at least two months’ severance. Our local partner suggests employers should give two written notices first, ideally by email. If there is no good cause for termination, our partner says the employer typically pays a one-month settlement, but dismissal without a valid reason is still unlawful and can be challenged.

Inspections

Surprise visits are possible in Georgia, but regulations are straightforward. In general, if you follow the rules, you are unlikely to experience problems with inspectors.

Sick leave

Foreign employers often don’t expect how sick leave works in Georgia. The Labor Code does not set an allowance for paid sick leave, so it depends on the contract. Our in-country partner says employees can take up to 42 days on full pay with a doctor’s note. But it’s rare to take that much time off, and a maximum of 10 days is more likely.

Paying salaries

You must pay salaries in Georgian lari, usually to a local bank account. You may not realize this when you first hire in the country if you're used to paying in euros or dollars.

How Rivermate can help you stay compliant when hiring in Georgia

Staying compliant is essential when hiring in Georgia, and our local partners know exactly how to apply local labor laws and will deal with all aspects of the employment relationship on your behalf, so you can focus on your business while we take care of the rest.

Learn more about EOR services

Benefits of hiring employees through an EOR in Georgia

Registering a company in Georgia is straightforward, but it can still be a headache if you're unfamiliar with the country, its tax system, and its legal system. The bigger challenge comes with managing the company, running payroll, and handling taxes, all of which can be complicated without a clear understanding of local rules.

With an EOR, you get local expertise from day one, which is one of the main reasons foreign employers choose this option. Right away, you get people who know the local labor rules and will comply with them, without having to learn them yourself.

An EOR may also have a large database of talent already. If it has been present in the country for several years, it could have thousands of people to choose from, making it easy to find the right people for your role.

Hiring through an EOR is fast in Georgia. Local hires are very quick to onboard, and the process can often be completed in as little as one week. If hiring foreign nationals, the EOR can help with the work permit and visa, working from start to finish.

Because of the turnover requirement for hiring expats, you may find you are unable to start hiring foreign nationals as soon as you set up. An EOR, on the other hand, may already be in a position to hire foreign staff by meeting the requirement.

An EOR also provides a flexible solution if you’re not fully committed to Georgia yet. You could start by hiring a few employees with an EOR, then spend a few years scaling up slowly before you register a company in the country.

And while an EOR deals with compliance and knows the local rules, it can also provide support in other ways. By checking in with you and your employees regularly, it can spot problems early and help solve them before they become more serious.

Ready to start hiring in Georgia?

Hiring in Georgia isn't just about finding the right candidate. With Rivermate, you’ll have an expert who makes hiring in the country easy, from managing payroll to handling compliance issues, so you can hire with confidence.

Talk to a Georgia Hiring Expert

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