A Practical Guide to Using Employer of Record (EOR) Services in Georgia
Georgia has become a serious hiring destination for international companies over the past decade. The country combines a flat 20% income tax rate, a streamlined business registration process, and a growing talent base, particularly in technology, finance, and multilingual services. Cities like Tbilisi, Batumi, and Kutaisi have absorbed an increasing share of international remote and distributed hiring.
What attracts companies also comes with obligations. Georgia’s Labour Code is a binding legal framework that governs contracts, working hours, leave entitlements, and termination. Getting these wrong, even unintentionally, creates exposure that compounds over time.
An Employer of Record (EOR) becomes the legal employer of your team in Georgia. They handle employment contracts, payroll, taxes, pension contributions, and compliance with local labour regulations, while you manage the employee’s day-to-day responsibilities.
For most companies entering Georgia for the first time, this is the fastest and most practical route to compliant hiring without setting up a local entity.
Understanding Employment Law in Georgia
Georgia’s employment framework is governed by the Organic Law of Georgia — Labour Code, most recently amended in September 2024. Compared with many European systems, the framework is relatively flexible, but it still requires formal documentation and proper employment practices throughout the relationship.
Employment relationships must be formalised through written agreements. Disputes are resolved based on what the contract says, so gaps or vague language become problems later rather than during onboarding. An EOR ensures agreements are drafted in line with the current Labour Code and contain all required provisions from day one.
Employment Contracts and Legal Requirements
Contracts in Georgia can be written in Georgian or in bilingual formats. International companies typically use dual-language agreements, Georgian and English, so both parties understand the terms clearly. Where a bilingual contract exists, the Georgian version generally takes precedence in any dispute.
Most employment relationships are structured as indefinite contracts with no fixed end date. Fixed-term contracts are permitted but regulated: if a fixed-term agreement runs beyond 30 months, or if two or more consecutive fixed-term contracts together exceed 30 months, the relationship is automatically treated as indefinite under Georgian law.
Probation periods can last up to six months and must be explicitly stated in the contract. During probation, either party can terminate the agreement with shorter notice than the standard period.
Contracts should also address confidentiality, intellectual property assignment, and dispute resolution, particularly relevant for technology, product, and creative roles where employee-generated output is core to the business.
Payroll, Taxes, and Pension Contributions
Georgia operates a straightforward payroll system compared with most hiring markets. Personal income tax is a flat 20% withheld at source by the employer under the Pay As You Earn (PAYE) system.
There is no progressive band structure; the same rate applies regardless of salary level. This is confirmed by PwC’s Georgia Tax Summary.
Georgia introduced a mandatory funded pension scheme on 1 January 2019. Participation is mandatory for all employed Georgian citizens and residents under retirement age. Foreign nationals who are not Georgian citizens or permanent residents can opt out of the scheme. The EOR manages registration and contributions as part of the payroll setup.
Payroll tax returns must be filed quarterly, by the 20th day of the month following each quarter. The EOR handles all filings with the Revenue Service of Georgia. Understanding the total employer cost, not just the gross salary- before making an offer is essential. The payroll and pension reference below sets out the key figures.
Working Hours and Overtime
The standard workweek in Georgia is 40 hours, typically structured across five working days. In sectors with specific operating requirements, the weekly limit may extend to 48 hours, including breaks. Employers must maintain records of hours worked for at least one year.
Overtime must be agreed between employer and employee and compensated at an increased hourly rate or through proportional rest within four weeks. The Labour Code requires uninterrupted rest of at least 12 hours between working days and a minimum of 24 consecutive hours each week.
Leave Entitlements, Statutory Benefits, and Public Holidays
Georgia provides clearly defined leave entitlements under the Labour Code. Annual paid leave of at least 24 working days applies from the start of employment, though an employee can only request leave after 11 months of service in the first year. From the second year, leave can be taken at any agreed time.
Beyond annual leave, the Labour Code recognises several other leave categories that employers must account for:
- Maternity leave: 730 calendar days in total, of which 126 are paid from the state budget. This extends to 143 paid days in cases of complications or multiple births. The paid element is capped at GEL 1,000 per month from the state, though employers and employees may agree on additional top-up payments.
- Additional parental leave: Available after maternity leave ends, unpaid, at least two weeks per year until the child reaches a certain age.
- Unpaid leave: Employees are entitled to at least 15 calendar days of unpaid leave per year on request.
- Hazardous conditions leave: An extra 10 calendar days of paid leave annually for employees working in arduous, harmful, or hazardous conditions.
Several holidays fall on variable dates tied to the Orthodox calendar, so work schedules should be confirmed annually. When an employee works on a public holiday, compensation or time off in lieu applies as defined in the employment contract or company policy. The full leave reference is set out in the box below.
Contractors vs Employees: Understanding the Risk
Georgia has an active freelance economy, and many professionals work as independent contractors. The classification that matters, however, is not the title in the contract; it is the nature of the working relationship itself.
Georgian labour law looks at how the work is actually performed. Where a contractor works fixed hours set by the company, uses company equipment, takes direction from a manager, and works exclusively or primarily for one client over an extended period, the relationship functions like employment regardless of what the contract says. Reclassification triggers back taxes, pension contributions, and potential penalties.
An EOR eliminates this risk by placing workers into a formally compliant employment structure from the start. See our guide on how EORs prevent employee misclassification for more detail. The key risk indicators are set out in the box below.
Termination, Notice Periods, and Severance
Georgia’s Labour Code requires 30 days written notice before termination unless the contract specifies otherwise or unless the termination is for serious misconduct. Employers may offer payment in lieu of notice rather than requiring the employee to work the notice period. This must be agreed and documented.
Employees dismissed without cause are entitled to severance of not less than one month’s salary, to be paid within 30 days. The employer must provide written grounds for termination within seven days of the employee’s request. During probation, either party may terminate with shorter notice as defined in the contract.
Dismissal during maternity or parental leave is not permitted except in cases of company liquidation. Protected categories, including pregnant employees and those on legally approved leave, require particular care. Your EOR should advise on process before the termination decision is made, not just execute it afterwards. Read our full guide on handling termination and offboarding with an EOR.
Immigration and Work Authorisation
Georgia maintains relatively open visa and residency policies. Citizens of many countries can enter and stay visa-free for up to 365 days, making it an accessible location for foreign nationals.
However, for employees who plan to live and work in Georgia on a longer-term basis under an employment contract, residence and work authorisation requirements should be assessed.
Foreign employees hired through an EOR must be registered with the Ministry of Internally Displaced Persons, Labour, Health and Social Affairs within 30 calendar days of commencing work.
Some EOR providers assist with immigration documentation and employment confirmation letters required for residence permit applications. Confirm this capability with your provider before onboarding a foreign national.
Data Protection and Employee Records
Georgia’s Law on Personal Data Protection governs how employers collect, store, and process employee information. Employment records typically include identification documents, tax data, bank details, salary history, and leave records, all of which constitute personal data under Georgian law.
Employers and EOR providers must store employee data securely, restrict access appropriately, and not share information without authorisation. This is worth confirming explicitly with your EOR provider, particularly if your company is subject to GDPR in other markets and needs to ensure consistent data handling standards across jurisdictions.
How the EOR Hiring Process Works in Georgia
Hiring through an EOR in Georgia typically takes one to three weeks from the point of a signed offer to the employee’s first working day. The process is structured but straightforward, and most delays come from missing documentation rather than the hiring model itself.
The EOR first confirms the role should be structured as employment rather than contracting, then calculates the full employment cost including taxes and pension contributions.
A compliant bilingual employment contract is drafted and agreed. The employee provides identification, tax information, and bank details. The EOR registers payroll and pension contributions with the Revenue Service, and ongoing payroll runs from the first pay date. The step-by-step process is mapped in the box below.
EOR Pricing in Georgia: What to Expect
Georgia is one of the more cost-effective EOR markets. The absence of complex social security systems and the flat 20% income tax make payroll administration simpler than in most European countries, which is reflected in lower EOR service fees.
Most providers charge either a flat monthly fee per employee or a percentage of salary, typically between 5% and 12%.
The EOR service fee covers employment contracts, payroll processing, tax filings, pension contributions, and compliance management. Health insurance is not a statutory employer obligation in Georgia, so it is not automatically included; it is offered as an optional benefit and billed separately by most providers.
Use our EOR cost calculator to model the full employment cost before committing to a hire, and check our Global EOR Price Index for Georgia-specific cost benchmarks.
EOR vs Setting Up a Local Entity in Georgia
Registering a company in Georgia is relatively fast by international standards; the process can be completed in a few days through the National Agency of Public Registry. However, registration is only the beginning. After incorporation, a company must set up a bank account, register for tax, establish payroll, and maintain ongoing compliance obligations including quarterly filings.
For companies hiring one to ten employees in Georgia, the EOR route is almost always more efficient. The overhead of running a local entity is disproportionate to small headcounts, and the compliance responsibility sits entirely with you. The comparison below sets out the key differences.
When to Transition from EOR to a Local Entity
Most companies that use an EOR in Georgia do so until they reach 10 to 20 employees in-country, at which point the monthly per-head fees begin to approach the cost of running a local payroll operation. A physical office, long-term market commitment, or the need for local equity schemes are the other common triggers.
The transition involves novating employment contracts to the new entity, re-registering payroll with the Revenue Service, and coordinating the handover with the EOR. Planning this six to twelve months in advance makes the process significantly cleaner than attempting it under time pressure.
How to Choose the Right EOR for Georgia
Not all EOR providers operate in Georgia with the same depth. Some run through a direct local entity; others use local partners. For Georgia specifically, where the EOR market is less saturated than in Western Europe, the quality of local legal and payroll expertise varies more than the provider’s global brand might suggest.
The questions that matter most are whether the provider has direct payroll registration in Georgia, how they handle bilingual contract drafting, whether they support pension opt-out processing for foreign nationals, and how they manage termination situations, including the 30-day notice and severance obligations. These details are not visible in a demo — they surface when something goes wrong.
Providers who have operated in Georgia for several years will understand the Revenue Service’s filing requirements, the nuances of the Labour Code’s probation and fixed-term provisions, and how to structure contracts for foreign nationals. Explore how we evaluate providers on our review methodology page.
Final Note
Georgia’s business-friendly tax structure, growing talent market, and relatively flexible labour framework make it one of the more accessible hiring destinations in the region.
The legal obligations are real but manageable when the right structure is in place from the start. An EOR gives you that structure without the overhead of a local entity, and for most companies entering Georgia for the first time, that is exactly the right starting point.
