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How an Employer of Record Works in Armenia

Using the services of an Employer of Record (EOR) in Armenia, foreign companies can hire in the country without having to set up a local entity. The EOR acts as the legal employer, handling onboarding and compliance, while foreign employers focus on day-to-day operations.

Rivermate provides EOR services in Armenia for foreign companies. Our experienced local partners know the country well and make it easy to hire quickly and compliantly anywhere in Armenia.

Armenia labor market: At a glance

The hiring market
Greatest hiring activity:	Yerevan, Gyumri, and Vanadzor.
Hiring timelines:	About two weeks for local hires; up to two months for foreign hires.
In-demand sectors:	Technology and customer support.
Sectors with skills shortages:	Niche tech roles.

The salary market
Employer tax contributions:	No social security or pension contributions.
Minimum wage:	AMD 75,000 net per month
Average gross annual salary:	About AMD 3.6 million.
Income tax brackets:	Flat 20% rate.

What it costs to hire an employee in Armenia

Hiring costs are quite low in Armenia, but there are still several costs to consider when hiring.

Salaries

Salaries are broadly the same across the Caucasus, so there is no real difference between Armenia and neighboring countries.

The minimum wage is currently AMD 75,000. This excludes taxes and mandatory payments, meaning the gross salary might be high enough that the employee receives this amount or more after deductions.

All salaries are generally paid in the local currency, the Armenian dram (AMD), and they are typically paid into local bank accounts in one monthly bank transfer. Payments are usually made by the 15th of the following month.

Employer contributions

Employers do not pay anything toward the employees’ pensions or social security, but they do pay for sick leave, paternity, and overtime, and, in one case, the military stamp payment.

Employees pay income tax at a flat rate of 20%, which is withheld by the employer. Employees subject to mandatory funded-pension contributions then pay 5% toward their pension on monthly gross salaries up to AMD 500,000. This rises to 10% above that, minus AMD 25,000, and there’s a cap of AMD 87,500. Employees born on or after January 1, 1974 must make pension contributions, but those born before this date can opt to join voluntarily.

For earnings over AMD 200,000 gross, health insurance is now being withheld, and this is currently being phased in after it was announced in December 2025. For salaries of up to AMD 500,000 gross, the amount is AMD 4,800, and for anything above that, the amount is AMD 10,800.

Employees also have to pay a military stamp payment (ZINAPAH). This is AMD 1,000 per month for monthly income up to AMD 1,000,000, going up to AMD 15,000 for income above that. However, if employees are paid the statutory minimum wage, they don’t have to pay this, and the employer must pay it for them instead.

Leave and overtime

Employees get 20 working days of paid annual leave. For sick leave, the first day is unpaid, and the employer pays the next few days at a rate of 80% of the average wage. After this, social insurance covers sick leave.

Employees receive 140 days of paid maternity leave, which is covered by social insurance. Paternity leave is five days, and this is paid by the employer. If an employee works on public holidays, they receive a higher rate of pay, and overtime is paid at a premium of at least 50%.

Bonuses

Bonuses for performance, holiday, and length of service are common but not mandatory. The same goes for private health insurance, which employers widely offer.

Armenia employer cost calculator

Use our employer cost calculator to get a better idea of the total employment costs in Armenia.

What hiring in Armenia really looks like

Market condition	What an employer needs to know
Talent availability	Mainly in Yerevan, and there is a lot of talent available, especially in tech and customer support roles.
Specialist talent	Niche tech skills can be harder to find.
English proficiency	English is common, especially among younger workers.
Key employer challenge	Local regulations can change quickly, and these can be easy to miss without specialist local support.

Yerevan is where most of the talent is located in Armenia, especially tech and digital talent. Customer support is also in demand. Apart from Yerevan, Gyumri and Vanadzor are other important hubs in the country.

There are many highly educated people in Armenia, and English skills are generally good. Our partner only employs people with B2 English, and they don’t have problems finding talent with good English skills.

Salaries are comparable to other countries in the region, as they tend to be similar across the Caucasus. However, competition is quite high in highly-skilled roles, so it’s important to offer benefits that would encourage employees to stay.

Hiring timelines are fast. Our local partner can present top candidates in two weeks, and onboarding only takes about 2–3 days. Hiring foreign nationals is a little more complex. Visa requirements depend on citizenship, and most foreign workers need a work permit unless an exemption applies. The employer needs to submit an application through the online work-permit system, and it can take up to two months for employment-based residence status to be granted. The temporary residence card costs AMD 105,000.

First, you must submit details to the Ministry of Labour and Social Affairs. Then there is a 15-working-day period during which the Ministry assesses whether an Armenian citizen can fill the position.

Country-specific problem that employers must know about

One of the problems that often surprises employers new to the country is that things can change very fast in Armenia. Things like tax regulations can change quickly, and it can be hard to keep up with the changes. Things like new laws coming into effect can be easy to miss if you’re not following the changes every day. If you miss an important change, it may be months until you find out, and you could end up facing fines.

It’s not simply enough to try and follow the rules. If you break any local laws by failing to comply, it can become a big problem. That is why it often makes sense to have someone guide you through the process.

For example, our local partner sends clients regular newsletters highlighting major regulatory changes they need to know about. This is just one of the ways it keeps foreign employers up to date, and it takes away a big headache for them.

Compliance risks you must know about in Armenia

Terminations

When you terminate a role in Armenia, you need lawful grounds. The Labor Code lists the reasons you can use, and the required notice period depends on the reason and how long the employee has worked in the role. For example, if you are terminating the role because of the need to reduce staff, you will need to provide two months’ written notice and pay one month’s average salary.

If someone is not suited to the role, you must provide 14 to 60 days’ notice, depending on how long they have served in the company, and pay a dismissal benefit of 10 to 44 days’ average daily salary. This is separate from redundancy, where one month’s average salary is paid. Also, after receiving the dismissal order, the employee has two months to challenge it. Because the rules are very specific, follow the process exactly to avoid problems.

Worker misclassification

Hiring a contractor when they should be an employee can create serious problems for employers in Armenia. The Labor Code applies here, and it references factors that determine whether a role is a contractor or an employee, like performance of work, following internal rules, and pay. Failure to classify an employee properly can lead to penalties.

Probation

Probation is permitted in Armenia, but it must be written into the contract. The maximum period is three months, and a longer probation period is only possible where legislation provides for it. During the probation period, you must provide three days’ written notice to terminate the employment.

How Rivermate can help you stay compliant when hiring in Armenia

When you want to hire in Armenia, our local expert partners know exactly how to apply the local labor law to handle the employment relationship for you. So you can focus on managing your business, and we’ll take care of the rest.

Learn more about EOR services

Benefits of hiring employees through an EOR in Armenia

One of the main benefits of using an EOR to hire employees in Armenia is the speed. With an EOR, you might only have to wait a couple of weeks for them to find suitable candidates, interview them and present you with a shortlist. After that, it takes 2–3 days for onboarding, which means you could realistically have everything up and running in a week or two.

Setting up your own local legal entity is a much bigger process. You'll need to register your company for tax, then sort out a bank account, Social Security, and more. You’ll also need someone who knows local labor law and stays up to date with changing rules, which is exactly what an experienced EOR will do for you.

Writing up compliant employment contracts, registering employees, calculating income tax, and arranging social payments is not straightforward for someone new to the country. An EOR handles all of this, including drafting dual-language contracts to make things clearer for you.

When circumstances change, you could easily get lost if you set up your own entity without an EOR's specialist skills. For example, you may face unusual situations where an employee is moving countries. An EOR like Rivermate has connections with other countries and can help to make the process a lot smoother.

In addition, you’ll gain access to talent through an in-country EOR that knows what it takes to attract the best applicants for your role. Without this specialist knowledge, it could take a lot of trial and error.

If you are thinking about setting up your own entity in Armenia but you’re not sure, an EOR is also a good way to test the market for a few years before you fully commit. This way, you can avoid the time and costs involved in setting up in the country only to discover that you don’t want a long-term presence in the country.

Ready to hire in Armenia?

Hiring in Armenia is not just about finding the best candidate. At Rivermate, we make the entire process easy for foreign companies, dealing with payroll, taxes, and compliance, so you can hire in the country with full confidence.

Talk to an Armenia Hiring Expert

Sources:

https://taxsummaries.pwc.com/armenia/individual/other-taxes

https://taxsummaries.pwc.com/armenia/individual/taxes-on-personal-income

https://taxsummaries.pwc.com/armenia/individual/tax-administration

https://english.hartak.am/guides/incapacity

https://english.hartak.am/guides/leave-and-rights

https://rm.coe.int/12th-national-report-from-armenia/168078ebb0

https://arlis.am/en/acts/229600

https://www.legal500.com/guides/wp-content/uploads/sites/1/2026/04/Armenia-Employment-PDF.pdf

https://migration.mia.gov.am/en/acquiring-employment-based-residence-status

https://www.arlis.am/en/acts/231843

https://health.gov.am/articles/news/հաճախ-տրվող-հարցեր-առողջության-համընդհանուր-ապահովագրության-մասին-մաս-3

https://www.arlis.am/en/acts/224990