Employing Staff in Georgia: Contracts, Payroll & Pension (2026)

Employing staff in Georgia involves three main areas of law: the Organic Law of Georgia on Labour, which governs the employment relationship; the Tax Code of Georgia, which regulates payroll taxation; and the Law of Georgia on Funded Pensions, which establishes the mandatory pension scheme. This guide explains the key obligations for employers, including employment contracts, payroll deductions, and reporting to the Revenue Service.

If you are still deciding how to operate your business, see Run a Business in Georgia and Running a Company in Georgia;

The employment contract

Georgian labour law is governed by the Organic Law of Georgia on Labour. The following rules apply to almost every employment relationship.

Form of the employment agreement

An employment agreement may be concluded orally or in writing, for either a fixed term or an indefinite term. It must be in writing if the employment relationship continues for more than three months. In practice, however, most employers use a written agreement from the outset.

Probation period

The parties may agree on a probation period of up to six months to assess whether the employee is suitable for the role. A probation period may be agreed only once with the same employee. The agreement must be in writing, and all work performed during the probation period must be remunerated.

Working time

The standard working week must not exceed 40 hours.

For businesses with specific operational requirements that necessitate continuous work exceeding eight hours per day, the maximum is 48 hours per week.

Annual leave

Employees are entitled to at least 24 working days of paid annual leave each year and may also take up to 15 calendar days of unpaid leave annually. The Labour Code also regulates the procedure for requesting leave and the circumstances in which unused leave may be carried forward.

Public holidays

In addition to annual leave, employees are entitled to 18 statutory public holidays in a typical year—fourteen fixed-date holidays and the four-day Orthodox Easter period.

An employee may agree with the employer to substitute a public holiday for another rest day, provided the arrangement is recorded in the employment agreement.

See Public Holidays in Georgia.

Termination of employment

The Labour Code specifies the permitted grounds for termination and provides employees with protections regarding notice, severance pay, and the right to receive reasons for dismissal.

Where the employer terminates the employment agreement, it must either:

• give at least 30 calendar days’ prior written notice and pay severance equal to at least one month’s salary; or
• give at least three calendar days’ prior written notice and pay severance equal to at least two months’ salary.

An employee may request written reasons for the dismissal and, where permitted by law, challenge the termination before the court.

Because the validity of a dismissal often depends on both the factual circumstances and compliance with the statutory procedure, employers should obtain legal advice before terminating an employment relationship.

Payroll taxes: personal income tax

Employment income is subject to personal income tax (PIT) at a flat rate of 20%.

The employer acts as a tax agent, withholding the tax from the employee’s salary and remitting it to the Revenue Service. As a result, employees receiving only employment income will generally have no separate income tax filing obligation.

The tax rate and withholding rules are set out in the Tax Code of Georgia. For a broader explanation of the Georgian income tax system, see Personal Income Tax in Georgia.

Payroll taxes: mandatory funded pension

In addition to income tax, most employees participate in Georgia’s mandatory funded pension scheme, administered by the Pension Agency.

The scheme operates on the 2% + 2% + 2% principle:

Contribution	Paid by	Rate
Employee	Withheld by the employer from the employee’s salary	2%
Employer	Paid by the employer in addition to salary	2%
State	Paid by the State	Up to 2%

The State’s contribution is up to 2% of the employee’s gross salary. It gradually decreases once the employee’s salary exceeds the statutory threshold and ceases altogether above the upper threshold.

Who must participate?

Participation in the mandatory funded pension scheme generally applies to:

• Georgian citizens;
• foreign citizens holding a permanent residence permit in Georgia; and
• stateless persons holding a permanent residence permit in Georgia.

By contrast, foreign citizens who do not hold a Georgian permanent residence permit are generally not subject to the mandatory scheme, and pension contributions are therefore not normally payable in respect of their employment.

Participation is generally mandatory for individuals who fall within the scope of the Law of Georgia on Funded Pensions. The Act also sets out the limited circumstances in which a person may leave the scheme or cease making contributions.

As eligibility depends on the employee’s citizenship and immigration status, employers should confirm each employee’s position with the Pension Agency before processing payroll.

Registering and reporting with the Revenue Service

An employer paying salaries acts as a tax agent and is responsible for withholding and remitting employment taxes and mandatory pension contributions to the Revenue Service.

In practice, this means:

• registering with the Revenue Service (registration of a company or Individual Entrepreneur automatically creates a tax account) and using the rs.ge electronic portal;
• withholding 20% personal income tax and, where applicable, the 2% employee pension contribution from each employee’s salary;
• paying the 2% employer pension contribution, where applicable;
• filing the monthly payroll tax return and paying the withheld taxes and pension contributions, generally by the 15th day of the month following the relevant reporting period.

Submitting the payroll return and making the payment are separate obligations—filing the declaration does not itself transfer the funds.

Hiring foreign staff: the right to work

Hiring a foreign national involves additional immigration requirements alongside the usual employment and payroll obligations.

Under Georgia’s 2026 labour migration framework, many foreign employees must first obtain the right to work before they can lawfully work in Georgia, although a number of categories are exempt. In many cases, the employee will also need a work residence permit if they intend to reside in Georgia on the basis of that employment.

The key point for employers is that the application is made by the employer, not the employee. Once the employment agreement has been concluded, the Georgian employer applies for the employee’s right to work through the Ministry’s electronic labour migration system.

A right to work is employer-specific. It is issued in respect of a particular employer and does not automatically transfer if the employee changes jobs.

The competent authority must decide the application within 30 calendar days of receiving a complete application, or within 10 working days under the expedited procedure.

Annual employment quota

If, during a calendar year, you intend to employ:

• more than five foreign nationals; or
• a number of foreign nationals exceeding 5% of your total workforce (unless 5% is fewer than five employees),

you must first obtain an annual employment quota from the Agency through the electronic labour migration system.

The quota application must be submitted at least 10 working days before applying for the first right to work under that quota. If necessary, the quota may later be increased on a reasoned request.

Employers should request only the quota they genuinely expect to use. A quota that is substantially underused may be reduced in the following calendar year.

Minimum turnover requirement

Before a right to work can be issued, the employer must demonstrate:

• annual turnover of at least GEL 50,000 for each foreign employee; or
• GEL 35,000 per foreign employee for educational and medical institutions.

The turnover is normally confirmed through a certificate issued by the Revenue Service.

Newly established businesses benefit from a temporary exemption. A turnover certificate is not required where:

• no more than three months have passed since the employer’s incorporation or registration; and
• the employer is applying for no more than three foreign employees.

Where the employer is not registered for VAT, the turnover may be evidenced by another certificate issued by the competent authority covering the previous 12 months.

Registration of short-term professional activity

Certain foreign nationals carrying out short-term professional activity are exempt from the right-to-work requirement. However, to rely on this exemption, the employer or organiser of the activity must register the individual in the electronic labour migration system before the activity begins.

The registration is submitted through labourmigration.moh.gov.ge and is free of charge.

If the statutory conditions are not met—for example, if the activity is not registered in advance, the foreign national does not qualify for the exemption, is staying in Georgia unlawfully, or the activity is subject to the quota regime—the exemption does not apply. In that case, the work is treated as unauthorised employment, which may result in liability for both the employer and the foreign national.

The exemption is also limited to a maximum of four months in any calendar year.

Reporting changes to employment

Employers must notify the electronic labour migration system of:

• the termination of an employment agreement; or
• any amendment or extension of the agreement,

within 5 calendar days of the relevant event.

Failure to report these changes constitutes a separate administrative offence and may result in a fine.

For a detailed explanation of the right-to-work regime, see Right to Work in Georgia.

Compliance checklist

Before employing staff, verify the current tax, pension and labour migration requirements with the relevant authorities, particularly where you intend to hire foreign nationals. Employment contracts and dismissals are often fact-specific and may require professional advice.

This guide provides general information only and does not constitute legal or tax advice.

Frequently asked questions

Does an employment contract in Georgia have to be in writing?

Not always, but usually in practice. Under the Labour Code a labour agreement may be made orally or in writing, for a definite or an indefinite period, but it must be made in writing where the labour relationship continues for more than three months. An agreement for a trial (probation) period must always be in writing. Most employers use a written contract from the outset.

How long can a probation (trial) period last?

Up to six months. The Labour Code allows a trial-period agreement to be signed only once with a given employee, for no more than six months, to determine whether the person is fit for the work. Work during the trial period must be paid, on terms agreed by the parties.

What payroll taxes does a Georgian employer deduct from salaries?

Two things. First, personal income tax, which Georgia levies at a flat 20% and the employer withholds at source from the salary. Second, mandatory funded-pension contributions under the 2% + 2% + 2% principle: 2% is withheld from the employee, the employer adds 2%, and the state adds up to 2%. The employer declares and pays both to the Revenue Service. Confirm the current figures with the Revenue Service and the Pension Agency.

Are foreign employees enrolled in the Georgian pension scheme?

Enrolment in the mandatory funded pension scheme is generally required for Georgian citizens, for foreign citizens who hold a Georgian permanent residence permit, and for stateless persons permanently resident in Georgia. Foreign citizens without permanent residence in Georgia are generally outside the mandatory scheme. Because this turns on residence status, confirm an individual worker's position with the Pension Agency.

When does the employer file and pay payroll taxes?

Withheld personal income tax and pension contributions are reported and paid to the Revenue Service on a monthly cycle, normally by the 15th of the month following the salary payment, through the rs.ge portal. Filing the declaration and transferring the money are separate steps. Confirm the current deadline and procedure with the Revenue Service.

What notice and severance apply if the employer ends the contract?

The Labour Code sets a high-level framework. On the standard route the employer gives the employee at least 30 calendar days' prior written notice and pays severance of at least one month's salary; alternatively, with at least three calendar days' prior written notice the severance is at least two months' salary. The grounds for termination and the employee's right to request written reasons and to appeal are all set out in the Code, so take advice on a specific dismissal.

Do I need to do anything special to hire a foreign worker?

Yes, and the employer carries most of the burden. Beyond the contract and payroll duties, some foreign nationals must first obtain the right to work — and it is the employer, not the employee, who applies for it through the labour-migration electronic system. Ordinance No 321 of 9 July 2026 added further employer duties: agreeing an annual quota where you hire more than five foreign nationals in a year, evidencing turnover of at least GEL 50,000 per foreign hire, and registering any short-term professional activity before it begins. See the Right to Work and Work Residence Permit guides.

When does my company need a foreign-hire quota?

Where you plan to employ more than five foreign nationals in a calendar year, or where foreign nationals would exceed 5% of your total headcount — unless that 5% comes to fewer than five people. In that case the quota must be agreed with the Agency electronically at least ten working days before you apply for the right to work, supported by a Revenue Service document showing annual turnover of at least GEL 50,000 per foreign national (GEL 35,000 for educational and medical institutions). A quota you leave substantially unused can be reduced the following year.