Employer of Record in Andorra

How an Employer of Record works in Andorra

A foreign company wanting to hire in Andorra must establish a legal entity or work through a third-party provider, like an Employer of Record (EOR). The EOR becomes the legal employer in Andorra through its own local entity and handles the employment compliance according to local labor laws. The model is designed to free up your time and resources without taking over operational management of the employee.

Andorran labor market: At a glance

The hiring market
Greatest hiring activity:	Andorra le Valla, the capital city
Hiring timelines:	Local: 1-3 weeks Seasonal expats: Temporary Permit is processed in 3-7 days. Year-round expats: Work-and-residence permit is processed in 3 to 6 weeks.
In-demand sectors:	Tourism, hospitality, retail, services
Sectors with skills shortages:	Tourism, healthcare, technology

The salary market
Mandatory contributions:	CASS (social security contributions) Employer: 15.5% Employee: 6.5%
Hourly interprofessional minimum wage:	€9.05 (effective July 1, 2026)
Average gross monthly salary:	€2,760.46 (as at May 2026)
Personal income tax rates:	IRPF (Andorran tax residents): First €24,000: Tax exempt
€24,001 to €40,000: 5%
Over €40,000: 10% IRNR (Andorran non-residents): Flat rate of 10%

What will it cost to hire in Andorra

Calculating the total employment costs in Andorra requires combining several elements as follows:

Fixed/base salary + variable wages + social security contributions + additional benefits + future financial obligations = employment costs

Cost calculation estimate
Assuming a full-time employee, hired on an indefinite contract with a guaranteed performance bonus, commission, overtime and additional private healthcare:

Salary component	Description	Amount
Fixed/base salary	Fixed monthly amount, based on €2,760.46 pm	€33,125.52
Variable wages	Performance bonus, overtime, commission	€6,555.54
Social security contributions	Mandatory payroll contributions	€6,150.48
Additional benefits	Employer-provided benefits	€1,200.00
Total employment cost	Total cost per annum	€47,031.54
Future financial obligations	Potential payouts due at termination of contract	Varies according to the reasons for the termination, and amount of accrued leave

While the exact total of future financial obligations vary according to each case, employers should budget for these costs because they can run into thousands of euros. For example, the cost of an operational termination by the employer can include a notice period, termination compensation (severance pay) and unused leave. When you hire through an EOR in Andorra, they will provide you with a comprehensive breakdown of employment costs. They can also provide you with information about market-related salaries and common supplementary benefits.

Employment cost calculator

Employee benefits and working conditions

Working hours in Andorra are set at 40 hours per week with a rest period of at least 12 hours between working days and at least one rest day per week.

Overtime requires the employee’s agreement, except in extraordinary circumstances or force majeure. Compensation is determined by an applicable collective agreement but if no agreement applies, each hour of overtime is paid at a premium of at least 40% of fixed pay.

Paid annual leave is mandated at a minimum of 30 calendar days per year for full-time employees. Employees receive their regular salary during their annual leave.

An employee is entitled to take medically certified sick leave but it is treated as a suspension of the employment contract. The employee must notify their employer within 48 hours and only when medical clearance is given, does the suspension end. The payment rate and eligibility are governed separately by Andorra’s social security laws.

Amendments to the Andorran labor law in 2026, changed the duration of maternity and paternity leave. Under the new laws, maternity leave is 20 weeks with six weeks after the date of the birth mandatory but any remaining maternity leave optional. Paternity leave is now 6 weeks but will increase progressively each year until 2030, when it will be 20 weeks. Furthermore, the legally recognized father must take two consecutive weeks leave after the child’s birth. Both benefits are paid by social security (CASS) at 100% of the CASS base calculation rate and are subject to eligibility criteria.

For dismissal without cause (indefinite contract), the severance pay is 25 days' salary per year of service, capped at 365 days in total. The employer must also provide 12 days' notice per year of service, proportionate for a shorter period and capped at 30 days. If the employee is not required to work all or part of the notice period, then the applicable salary must be paid to the employee.

What hiring in Andorra really looks like

Overall: 🟡 Moderately challenging for hiring year-round workers, but less so for seasonal workers.

Market condition	Current reality	Description
Hiring momentum	🟡 Moderate	Hiring growth is mainly driven by seasonal workers, with a steady increase in year-round workers in the private business sector, especially technology, services, tourism and hospitality.
Talent availability	🟡 Moderate	Unemployment in Andorra is very low at 1.1%. The economic activity is sustained by cross-border workers, especially from Spain, France and Portugal.
Specialist talent	🔴 Increased pressure on the talent pool	Local talent stays with employers who offer competitive salaries, and this drives employers to offer higher salaries and better benefits. Expats (mainly high-net-worth entrepreneurs) make up the majority of the specialist talent in Andorra.

The economy is driven by tourism and seasonal work

Andorra’s major source of economic activity is tourism and hospitality with a large number of visitors flocking to ski resorts, hotels, restaurants, leisure activities and high-end retail stores.

The recruitment of seasonal workers begins in September to ensure workers are ready for the winter season, with additional hires taking place just before the Christmas holidays. Summer-season hiring begins around March and depending on the role, ends in September or October.

A large number of seasonal workers come from neighboring countries. This requires employers to be expertly skilled in cross-border agreements and work permits to manage the employment risks associated with the immigration.

Andorra has a unique labor framework

Andorran labor legislation is unique and doesn’t form part of the EU labor framework, although some of the elements may be similar. The main document governing the employment relationship is Liel 31/2018, along with its subsequent amendments and other supporting legislation.

Compliant employment contracts

In Andorra, contracts regardless of their type or duration, must be in writing. Catalan, the official language, must be used to draft the contracts. Where a trial period is agreed, it must be included in the contract and cannot exceed two months unless specifically allowed by law as follows:

• If the salary is equal to or greater than three times Andorra’s minimum salary, the probation period may be a maximum of three months.
• If the salary is equal to or greater than five times Andorra’s minimum salary, the probation period may be a maximum of six months.

Where an employee was previously hired at the company in a job with the same characteristics during the previous three years, a trial period is not possible.

Three types of employment contracts can be used in Andorra and are categorized by their duration, purpose or working hours, such as a part-time worker. Andorra distinguishes an employee from an entrepreneur, also called an independent contractor (Articles 10 and 11). This is especially important for correctly classifying workers because misclassification can lead to fines.

Rivermate helps an Information Technology company hire in Andorra

Rivermate worked closely with a Madrid-based IT company to hire an employee in Andorra. The customer appreciated the quick, simple responses and the honest feedback about what was, and wasn’t possible. According to their People and Culture lead, Andorra can be quite complicated and difficult when it comes to employment rules and they appreciated the local support and advice from Rivermate. See the customer’s story in 90 seconds.

Expat hiring is common in Andorra

The vast majority of Andorra’s hiring activity is seasonal, specifically the summer and winter seasons. The retail and tourism industries are very active during this time and require a large number of sales assistants, stock administrators, store managers and workers on every level in hotels, restaurants and ski resorts.

Year-round hiring is mainly in the real estate, services and construction industries, serving high-net worth investors and tech entrepreneurs who move to Andorra for its tax benefits.

Andorra periodically publishes its immigration quotas on its official government site and makes adjustments depending on the demand. Employers need to manage their right to hire expats carefully by monitoring their allowable quota and complying with immigration and labor regulations. Part of this process is balancing the local versus foreign hires and checking that expats meet relevant qualification, language and salary requirements.

Andorra has cross-border arrangements with certain neighboring countries, such as France, Spain and Portugal, that gives them immigration priority. EU/EEA and other third-country nationals will go through the regular immigration process.

The initial period of the work-and-residence permit is one year, renewable three times for two-year periods. After seven years, renewals are granted for ten-year periods. Once an employer submits the application to the Andorran Immigration Service, the processing time is around 3 to 6 weeks, but depends heavily on the correct documentation and compliance with the immigration requirements.

Other commonly used immigration and work routes are:

• Border-work permit: Allows an employee to work in Andorra for the period of authorization but they must usually spend the night outside of Andorra.
• Residence for digital nomads: For a newcomer to Andorra who does not require a specific geographical location to work and uses technology to do their job.
• Participants of entrepreneurial programs: For a newcomer to Andorra who uses technology, does not need to work in a specific location and has chosen to participate in an entrepreneurial program in Andorra.

Benefits of hiring employees through an EOR in Andorra

Hiring full-time employees in Andorra can be complicated without local assistance. Andorra has its own unique labor framework and managing this framework isn’t the same as in Europe or elsewhere. This is where the advice and support of a local team can make all the difference, from setting up compliant employment contracts to handling the termination process. As the official employer, an EOR like Rivermate, understands the local laws and has the right network of partners to handle any challenge that comes their way.

Andorran employment doesn’t have to be complicated. Our Employer of Record services are designed to streamline global hiring and compliance in a way that’s simple, yet effective.

Ready to hire in Andorra?

If you’ve found the right candidate and are ready to hire in Andorra, Talk to a Hiring Expert

Sources:
https://www.bopa.ad/
https://documents.bopa.ad/bopa-documents/031003/pdf/CGL20190107_12_45_59.pdf
https://www.e-tramits.ad/tramits/autoritzacio-dimmigracio-temporal-per-contractacio-en-origen/p/GV001823
https://andorraue.ad/ca/acords-amb-la-ue/acord-de-gestio-de-fronteres/
https://www.bopa.ad/Documents/Detall?doc=GR_2026_10_07_12_54_13
https://www.portaljuridicandorra.ad/L2026006?