Employer of Record in Andorra

Andorra, a landlocked country in Southeastern Europe, is bordered by France to the north and Spain to the south. Its economy relies mainly on tourism, retail and wealth management, but government diversification measures have expanded into ecommerce and digital services. Andorra is also investing heavily in e-sports and gaming to attract tech startups and digital tournaments.

Local talent in Andorra is concentrated mainly in the tourism and wealth management sectors, located in and around the capital city, Andorra la Vella. The working population accounts for more than 70% of the total, and the majority of workers are between 30 and 50 years old, creating a small but experienced talent pool.

Popular roles in Andorra are: Luxury store managers, ski/snowboard instructors, wealth managers, cybersecurity experts and data managers.

Foreign companies set up in Andorra mainly for the business-friendly legislation, competitive tax framework, and access to highly specialized wealth management skills. They can draw on a highly educated, multilingual workforce, while structured employment laws facilitate strong, efficient working relationships.

What makes Andorra unique? Thanks to luxury ski resorts, easygoing banking and very low tax rates, the principality of Andorra has become a high-altitude haven known for shoppers and wealthy residents. Duty-free shopping brings people from nearly France and Spain to Andorra in droves during the high season.

Setting up a company in Andorra to employ workers follows a predictable but highly bureaucratic process, and it is an expensive exercise. An alternative is to partner with an Employer of Record in Andorra. An EOR, like Rivermate, acts as the legal entity and official employer on your behalf, dealing with payroll, taxes and employment compliance. You handle the day-to-day management activities of the employee.

How an Employer of Record (EOR) Works in Andorra

Using an EOR in Andorra simplifies hiring. The process is straightforward.

1. Hire local talent. You recruit and select the person you want to hire in Andorra.
2. The EOR hires the employee. The EOR uses its local Andorran entity to legally hire your chosen candidate.
3. A compliant contract is created. The EOR drafts an employment contract that follows all Andorran labor laws.
4. Onboarding is handled. The EOR manages all the necessary paperwork to officially bring your new team member on board. This process takes up to a week for local talent and 4-8 weeks for international workers requiring a work permit.
5. Payroll and benefits are managed. The EOR handles salary payments, tax documents, social security contributions, and benefits administration.

Why use an Employer of Record in Andorra

Navigating Andorran labor law without local knowledge and expertise, the process of hiring local workers more difficult. An EOR removes many of the obstacles to quick and efficient onboarding. Some other key benefits are:

Here are some key benefits:

• Enter the market quickly. You can hire employees and start operations in Andorra much faster than if you had to establish your own company.
• Offer competitive benefits. An EOR can provide your employees with compliant and attractive benefits packages from day one.
• Reduce risk. EOR HR and legal experts understand the employment market and laws. This ensures regulatory compliance for your company and preserves your reputation as a foreign employer.

Hiring in Andorra will not be similar to anything you’ve experienced in larger EU or Asian countries, but it doesn’t mean that Andorran labor legislation isn’t structured and well-regulated. Andorra has a small population of permanent residents who work in the tourism and financial sectors. In winter, seasonal workers flock to the country to fill positions in ski resorts, hotels and restaurants. This means hiring is heavily influenced by immigration/work authorization rules.

Andorran labor legislation heavily protects both these groups of workers, and foreign companies will be required to formalize all forms of employment in writing. The mandatory benefits afforded to workers in Andorra are on par with those in most other EU countries, and the minimum salary is more than double that of Bulgaria (€620), but not nearly as high as in Luxembourg (€2,704).

Andorran workers are focused on net salary when negotiating compensation, and for highly skilled wealth managers, bonuses and additional commissions are often required. Employers prepared to pay for relocation costs may gain a significant recruiting advantage.

Companies hiring multiple employees for seasonal work will be responsible for payroll, tax and regulatory compliance with national employment laws. Andorra’s growing number of remote workers must have the necessary contracts and work permits in place before commencing economic activities in the country.

Employment contracts & must-have clauses

Andorra has its own employment law and, therefore, should not be seen as an extension of French or Spanish laws. Contracts must be in the official business language, Catalan, but can also be drafted in other languages.

It is recommended that you avoid informal verbal agreements, even if some workers prefer them. Having a well-written employment contract in place that aligns with the type of employment you are offering is a best practice in this small country

Here are the essential clauses to include:

• Identification: Full details of both the employer and employee.
• Job Details: A clear description of the role and responsibilities.
• Compensation: The salary and any additional benefits, stated in Euros.
• Working Hours: A breakdown of the work schedule.
• Contract Duration: Specify if the contract is for a fixed term or is indefinite.
• Probation Period: The length and terms of the probationary period.
• Paid Leave: Details on the annual leave entitlement.
• Social Security: Information on social security (CASS) and insurance.

There are two main types of employment contracts in Andorra:

Contract Type	Description
Indefinite-Term	The standard contract for permanent, ongoing roles without a set end date.
Fixed-Term	Used for specific projects, seasonal work, or to temporarily replace an employee.

Probation periods

You can include a probationary period in an employment contract to see if a new hire is a good fit. During this time, either you or the employee can end the contract without notice. The length of the probation period can vary, but it typically ranges from three to six months.

Working hours & overtime

The standard workweek in Andorra is 40 hours, usually spread over five days. Employees are entitled to a 30-minute break after six consecutive hours of work.

Overtime is permitted but has its limits. Here's a quick look at the rules:

• Weekly Limit: Up to 12 hours of overtime per week.
• Monthly Limit: Up to 48 hours of overtime per month.
• Annual Limit: Up to 426 hours of overtime per year.

Overtime pay is calculated at a higher rate than the standard salary. If there's no specific company agreement, the minimum overtime pay is 125% of the regular rate.

Public & regional holidays

Employees in Andorra are entitled to paid time off for public holidays. There are four national holidays that are always observed:

• January 1 (New Year's Day)
• March 14 (Constitution Day)
• September 8 (Our Lady of Meritxell Day)
• December 25 (Christmas Day)

If an employee has to work on one of these days, they must be given two days off in compensation. In addition to these, there are other public holidays that may be moved by agreement, especially in the tourism sector. Each parish also has its own local holidays.

Hiring contractors in Andorra

It is possible to hire independent contractors in Andorra, but they cannot be classified as employees or seasonal workers. Contractors are regulated under self-employed rules and regulations (compte propi). They cannot receive a salary, benefits or resources from the company that hires them.

It will be beneficial for foreign employers to understand these key differences and draw clear distinctions when hiring a contractor. An EOR can help employers classify workers correctly and structure compensation to avoid misclassification.

Compensation packages in Andorra vary by job type and industry. Workers in the financial industry require higher salaries than workers in the retail or tourism sectors. Take-home pay in Andorra compares well with that of France and Spain, as do the benefits and bonuses paid to workers.

Payroll cycles & wage structure

The standard payroll cycle in Andorra is monthly. You typically pay employees their net salary once a month, often near the end of the month. Payments are almost always made by bank transfer. While not required, some companies offer performance bonuses or a Christmas bonus.

Overtime & minimums

The standard work week is 40 hours. For any hours worked beyond this, you must pay overtime.

• First 4 hours of overtime: 125% of the regular hourly rate.
• Hours 5 through 8 of overtime: 150% of the regular hourly rate.
• 9+ hours of overtime: 175% of the regular hourly rate.

As of 2026, the national minimum wage is €1,525.33 per month. If your employees work a night shift, between 10 p.m. and 6 a.m., you must pay them at least 20% above their regular wage.

Employer taxes and contributions

You are responsible for contributing to Andorra's social security system, known as CASS (Caixa Andorrana de Seguretat Social). This covers benefits like healthcare, maternity leave, and pensions. Your total contribution is 15.5% of the employee's gross salary.

Contribution	Rate
Social Security (CASS)	15.5%
Total Employer Contribution	15.5%

Employee taxes and deductions

Employees also contribute to the social security system. You will withhold their contribution from their monthly salary. Additionally, you are responsible for withholding personal income tax based on their earnings.

Contribution/Tax	Rate
Social Security (CASS)	6.5%
Personal Income Tax	0% on income up to €24,000
	5% on income from €24,001 to €40,000
	10% on income over €40,000

Mandatory benefits in Andorra are benchmarked against those of its neighbors, France and Spain. However, it is common for employers to offer additional benefits to attract scarce skills. Employers who offer housing stipends, subsidized housing and relocation assistance often have a competitive advantage over employers who do not.

Statutory leave

Andorran law makes sure you get the time you need away from work.

• Annual Leave After one year with a company, you get a minimum of 30 calendar days of paid leave. If you have been with the company for less than a year, you build up 2.5 days of leave for each month you work.
• Sick Leave If you are sick or have an accident, your employment contract is suspended. You will need to provide a medical certificate within 48 hours. The social security system, known as CASS (Caixa Andorrana de Seguretat Social), manages sick leave payments.
• Maternity Leave New mothers receive 16 weeks of fully paid leave. This can be extended to 18 weeks for multiple births or complications.
• Paternity Leave Fathers are entitled to paternity leave when a child is born or adopted.
• Other Leave You may also be able to take paid time off for events like a death in the family or your own marriage.

Public holidays & regional holidays

Andorra has 14 national public holidays. In addition to these, each of the seven parishes has its own local holidays.

Date	Holiday	National or Regional
January 1	New Year's Day	National
January 6	Epiphany	National
Varies	Carnival	National
March 14	Constitution Day	National
Varies	Good Friday	National
Varies	Easter Monday	National
May 1	Labour Day	National
Varies	Whit Monday	National
August 15	Assumption Day	National
September 8	National Day	National
November 1	All Saints' Day	National
December 8	Immaculate Conception	National
December 25	Christmas Day	National
December 26	St. Stephen's Day	National

Typical supplemental benefits

To stay competitive, many companies in Andorra offer more than just the legally required benefits.

Statutory Benefits (Required by Law)	Non-Statutory Benefits (Optional)
Social Security (CASS) Contributions	Private Health Insurance
Paid Annual Leave	Supplementary Pension Plans
Paid Public Holidays	Meal Vouchers or Subsidized Meals
Paid Sick Leave	Company Cars
Maternity and Paternity Leave	Wellness Programs (e.g., gym memberships)
Severance Pay	Performance Bonuses
	Stock Options
	Life and Disability Insurance

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Andorra, so you don't need to set one up. They handle all the administrative tasks, from enrolling employees in the social security system to managing payroll and ensuring you comply with all local labor laws. This means you can offer competitive benefits packages without getting lost in the details of Andorran regulations. An EOR helps you attract and retain talent by offering compliant and attractive benefits from day one.

In Andorra, ‘at-will’ terminations are not allowed, and employers will need to justify the reasons for the termination. Offboarding can be a difficult process and should be handled with the help of local experts or a labor relations professional. A final or severance payment will be required and foreign employers should factor this into the total employment costs.

Notice periods

When you decide to terminate an employee in Andorra, you must provide them with a notice period. The length of this period depends on how long the employee has worked for your company. A typical notice period is one day for each month of service, with a maximum of 90 days. For employees with less than one year of service, the notice period is generally 15 days. If an employee has been with the company for one to five years, the notice period is 30 days. For those employed for more than five years, it's 60 days. It is important to follow these legal requirements to avoid potential disputes.

Severance pay

In Andorra, employees who have worked for at least six months are usually entitled to severance pay. The amount is typically calculated as 15 days' salary for each year of service. This calculation is based on the employee's average salary over the last 12 months. There is often a cap on the total severance pay, which is equivalent to 12 years of service. The specific details of severance payments should be outlined in the employment contract.

How Rivermate handles compliant exits

Navigating employee exits in a different country can be complex. At Rivermate, we manage the entire offboarding process for you. We ensure that every step complies with Andorran labor law.

Here’s how we help:

• Legal Compliance: We handle all termination procedures according to the law, making sure there are valid grounds for dismissal and all contract terms are met.
• Notice Periods: We manage the required notice periods based on the employee's length of service and prepare all necessary documents.
• Severance Pay: We accurately calculate and process all severance payments owed to the employee.
• Final Settlement: We take care of the final payment, which includes any unpaid salary, accrued vacation time, and other benefits.

By handling these details, we make the process straightforward and compliant, allowing you to focus on your business.

To work and live in Andorra, all foreign nationals will require the appropriate work permit. The country operates a strict quota system for foreign workers, ensuring it can accommodate seasonal workers without putting pressure on local infrastructure.

Seasonal and remote workers may not enter the country on a tourist visa and then look for work. The correct visa is required to enter the country, and local authorities are known to prioritize residents from Spain and France for seasonal jobs.

An active residency permit will be required for foreign nationals (with sponsorship), and a job offer must be concluded before an employee is allowed to stay in Andorra.

An Employer of Record (EOR) can act as your legal employer in Andorra and handle the sponsorship process for you.

The application process requires several documents. Your employer submits the request to the Andorran authorities. You will need to provide:

• A valid passport
• A formal employment contract
• Your resume and proof of qualifications
• A police background check from your home country
• Proof of a place to live in Andorra
• A birth certificate

After your employer starts the process, you must also register with Andorra's social security system, known as CASS. You typically wait in your home country for the permit to be approved.

Business travel compliance (short-term visits)

You can visit Andorra for up to 90 days as a tourist without a visa. This is usually enough for activities like attending business meetings or conferences. However, if you plan to do any hands-on work, even for a short period, you need authorization.

For temporary jobs, especially in seasonal industries like tourism, a seasonal work permit is available. This permit allows you to work for a limited time, and you must leave the country when your contract ends. Always make sure you have the right authorization before performing any work to stay compliant with local laws.