A Practical Guide to Using Employer of Record (EOR) Services in Georgia
Over the past few years, Georgia has become an increasingly popular hiring destination for international companies. The country offers a business-friendly legal environment, relatively simple tax rules, and a growing pool of skilled professionals, particularly in technology, finance, and multilingual customer support.
Cities like Tbilisi, Batumi, and Kutaisi have seen steady growth in international hiring as remote companies expand their teams globally.
Still, hiring employees in Georgia involves more than simply agreeing on a salary and sending payments. Employment contracts must follow local labor law, payroll taxes need to be filed correctly, pension contributions must be registered, and employee records must be maintained properly.
For companies without a local entity, handling all of that independently can become complicated very quickly.
This is where an Employer of Record (EOR) becomes useful. An EOR legally employs workers on your behalf while you manage their day-to-day work. The provider handles payroll, employment contracts, taxes, and compliance with Georgian labor regulations.
For many companies entering the Georgian market for the first time, an EOR is the fastest and safest way to hire without establishing a legal entity.
Understanding Employment Law in Georgia
Georgia’s employment system is governed primarily by the Labor Code of Georgia, which outlines the rights and responsibilities of employers and employees. Compared with many European countries, the framework is relatively flexible, but it still requires clear documentation and proper employment practices.
Employment relationships must be formalized through written agreements that define the basic terms of the job. While the law allows a degree of flexibility in structuring employment arrangements, disputes are resolved largely based on what is documented in the contract.
For that reason, properly drafted contracts are essential. Companies hiring employees in Georgia should ensure agreements clearly define:
- Job responsibilities and role description
- Salary and payment structure
- Working hours
- Leave entitlements
- Probation conditions
- Termination procedures
When companies hire through an EOR, the provider typically drafts contracts that align with Georgian labor law and ensures all required provisions are included.
Employment Contracts and Legal Requirements
Employment contracts in Georgia can be written in Georgian or in bilingual formats. International companies often use dual-language agreements, which allow employees to review the terms in Georgian while the employer maintains an English version.
Most employment relationships are structured as indefinite contracts, which do not have a fixed end date. Fixed-term contracts are allowed but usually require a valid reason, such as temporary project work or replacement for an employee on leave.
Probation periods are also common and can last up to six months, provided they are clearly stated in the contract.
Contracts should also include provisions covering confidentiality, intellectual property ownership, and dispute resolution. These clauses are especially important for companies hiring developers, designers, or other knowledge-based roles.
An EOR ensures these agreements meet local requirements and are enforceable under Georgian law.
Payroll, Taxes, and Pension Contributions
Payroll in Georgia is relatively simple compared with many other countries, but accuracy and timely reporting remain important.
Employers must withhold and remit the following from employee salaries:
| Payroll Component | Contribution |
|---|---|
| Personal income tax | 20% |
| Employee pension contribution | 2% |
| Employer pension contribution | 2% |
| Government pension contribution | Up to 2% |
The pension scheme operates under Georgia’s funded pension system, which requires contributions from the employee, employer, and the state.
Payroll taxes and contributions must be reported to the Revenue Service of Georgia through the government’s electronic tax system. Employers must also maintain proper payroll records and payslips in case of inspections or audits.
An EOR provider manages these filings automatically and ensures that taxes and contributions are submitted on schedule.
The Georgian Pension System
Georgia introduced a mandatory funded pension scheme in 2019 to strengthen long-term retirement security for workers.
Under the system:
- Employees contribute 2% of their salary
- Employers contribute 2%
- The Georgian government may contribute up to 2% depending on the employee’s annual income level.
This creates a combined contribution of 6% of salary directed into a pension account.
Participation is mandatory for most Georgian citizens under retirement age. However, Foreign employees who are not Georgian citizens or permanent residents can opt out of the pension scheme.
EOR providers typically handle pension registration and contributions as part of their payroll services.
Working Hours and Overtime
The standard workweek in Georgia is 40 hours, typically structured across five working days.
Overtime is permitted but must generally be agreed upon by both employer and employee. Compensation for overtime is usually defined in the employment contract or internal company policies.
While Georgia does not impose overly rigid working time rules, employers are expected to respect reasonable working conditions and ensure employees are not regularly exceeding standard work limits without proper compensation.
Employee Leave and Statutory Benefits
Georgia’s labor law requires employers to provide paid annual leave along with several other leave categories.
Employees are entitled to at least 24 paid working days of annual leave per year. In addition, workers receive 15 calendar days of unpaid leave annually if requested.
Other recognized leave types include:
Sick Leave: Sick leave policies are typically defined by employer policy, although employees may take medically certified leave when necessary.
Maternity Leave: Georgia provides one of the longer maternity leave structures in the region. Employees may take up to 730 days of maternity leave, with 183 days paid under the state benefit system.
Parental Leave: Parents can take additional childcare leave after maternity leave ends, depending on family needs.
An EOR ensures these leave entitlements are administered correctly and that employees receive the benefits they are legally entitled to.
Public Holidays in Georgia
Georgia observes a number of public holidays throughout the year, many of which are tied to religious and national celebrations.
Major holidays include:
- New Year’s Day
- Orthodox Christmas
- Mother’s Day
- Independence Day (May 26)
- Orthodox Easter (variable dates)
- St. George’s Day
Public holidays can shift depending on the Orthodox calendar, so companies should plan work schedules accordingly.
When employees work on public holidays, additional compensation or time off may apply depending on company policy.
Contractors vs Employees: Understanding the Difference
Georgia has a large freelance economy, and many professionals work as independent contractors.
However, the classification of workers is determined by the actual working relationship, not simply the title used in a contract.
If a contractor works under conditions similar to a full employee, such as:
- Fixed working hours
- Direct management
- Company equipment
- Long-term engagement
the relationship may be reclassified as employment.
Reclassification can lead to back taxes, pension contributions, and penalties.
Using an EOR eliminates this risk by ensuring workers are employed under the correct legal structure.
Immigration and Work Authorization
Georgia is known for having relatively open visa policies, but foreign employees who plan to live and work in the country may still require residence permits or other documentation depending on their nationality and duration of stay.
Employers hiring international staff should consider:
- Residence permits
- Visa requirements
- Employment verification documentation
Some EOR providers assist companies with immigration paperwork and employment confirmations required for permit applications.
Data Protection and Employee Records
Employers in Georgia must follow the country’s Personal Data Protection Law, which regulates how companies collect, store, and process personal information.
Employment records often include sensitive data such as identification details, bank information, tax records, and employment history.
Companies must ensure that:
- Employee data is stored securely
- Access to records is restricted
- Information is not shared without authorization
EOR providers maintain compliant HR record systems and manage payroll documentation according to Georgian data protection standards.
Typical Cost of Using an EOR in Georgia
EOR pricing models vary depending on the provider and services included.
Most providers charge either:
- A monthly fee per employee, or
- A percentage of salary, often ranging between 5% and 12%
The fee typically covers:
- Employment contracts
- Payroll processing
- Tax filings
- Pension contributions
- Compliance management
- HR support
For companies hiring a small team or testing the Georgian market, this approach is often more cost-effective than establishing and maintaining a local legal entity.
Step-by-Step: Hiring Employees Through an EOR in Georgia
Hiring through an Employer of Record in Georgia is usually straightforward, but several compliance steps happen behind the scenes to ensure the employment relationship follows Georgian labor and tax regulations.
A typical hiring process looks like this.
1. Define the Role and Employment Terms
The first step is agreeing on the basic employment terms, including the role, salary, working hours, and benefits.
At this stage, the EOR will confirm that the position should be structured as full-time employment rather than a contractor relationship. In Georgia, misclassification can lead to tax corrections and back payments if the working relationship resembles regular employment.
2. Confirm Salary and Total Employment Cost
The EOR reviews the proposed salary and calculates the full employment cost, including taxes and pension contributions.
Georgia uses a relatively simple payroll structure:
- 20% personal income tax
- 2% employer pension contribution
- 2% employee pension contribution
This step ensures the compensation package aligns with both local regulations and market expectations.
3. Prepare the Employment Contract
The EOR drafts a contract that complies with the Labor Code of Georgia. The agreement typically outlines the employee’s role, compensation, working hours, leave entitlements, probation terms, and termination conditions.
International companies often use bilingual contracts so both parties clearly understand the terms.
4. Collect Employee Documentation
Before onboarding, the employee provides basic documentation such as identification, tax information, and bank details.
If the employee is relocating to Georgia, the EOR may also assist with documentation required for residence or work authorization.
5. Register Payroll and Pension Contributions
Once the contract is signed, the EOR registers the employee with the Georgian tax authorities and sets up payroll reporting.
This includes pension registration and monthly tax filings through the government’s electronic tax system.
6. Onboard the Employee and Start Payroll
After registration is complete, the employee can begin work.
The EOR then manages ongoing administrative tasks such as payroll processing, tax submissions, payslips, and leave tracking while the company manages the employee’s daily work.
EOR vs Establishing a Local Entity in Georgia
Many companies initially hire through an EOR before deciding whether to open a local entity.
| Factor | Using an EOR | Setting Up an Entity |
|---|---|---|
| Time to hire | Days to weeks | 1–3 months |
| Administrative effort | Low | High |
| Compliance management | Handled by EOR | Internal responsibility |
| Flexibility | Easy to scale | Less flexible |
| Best use case | Market entry or small teams | Large long-term operations |
For companies planning to hire only a few employees, an EOR is often the simplest option.
How to Choose the Right EOR for Georgia
Not all Employer of Record providers operate the same way. Some maintain their own legal entity and payroll infrastructure in Georgia, while others rely on local partners to employ workers on their behalf.
If you’re planning to hire employees in Georgia, it’s worth reviewing a few key factors before choosing a provider.
| Evaluation Factor | What to Look For |
|---|---|
| Local Presence | A provider with its own entity in Georgia usually has better control over contracts, payroll, and compliance. |
| Payroll & Tax Compliance | Reliable payroll processing, accurate tax withholding, and proper pension contributions filed with Georgian authorities. |
| Contract Flexibility | Employment contracts that can include IP protection, confidentiality clauses, and company-specific policies. |
| HR Support | A responsive HR team that can assist employees with documentation, payroll questions, and leave management. |
| Pricing Transparency | Clear pricing structure with defined monthly fees or percentage-based costs. |
| Scalability | Ability to support multiple hires and help companies expand their team over time. |
Beyond these basics, it’s also helpful to understand how the provider handles employee onboarding, payroll reporting, and contract updates. Since the EOR becomes the legal employer, they will be responsible for managing payroll payments, employment records, and compliance with Georgian labor regulations.
Companies that plan to hire more employees over time should also consider whether the provider can support long-term growth or assist with transitioning to a local entity later if needed.
Choosing a provider with strong local expertise and clear processes can make hiring in Georgia much smoother as your team expands.
When Companies Typically Transition From an EOR to Their Own Entity
Many businesses begin with an EOR and later establish their own entity once their local team grows.
This transition often happens when:
- The company hires 10–20 employees or more
- The business opens a physical office
- Local operations become a long-term strategic investment
Until that point, using an EOR allows companies to hire quickly while maintaining full compliance with Georgian labor regulations.
Final Thoughts
Georgia has built one of the more business-friendly hiring environments in the region.. The country combines relatively simple tax rules, a flexible labor framework, and an increasingly skilled workforce.
That said, hiring employees still requires proper contracts, accurate payroll processing, and compliance with local regulations.
An Employer of Record allows companies to manage those responsibilities through a local partner while focusing on building their team.
For organizations entering the Georgian market for the first time, an EOR provides a practical way to hire quickly, remain compliant, and scale operations without the complexity of establishing a legal entity.
