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.
Payroll, Tax and Pension Obligations When Hiring in Georgia
Georgia operates a flat 20% personal income tax with no progressive bands. The funded pension system requires contributions from employee, employer, and the state. All filings go to the Revenue Service of Georgia through the government’s electronic tax portal.
| Component | Rate | Notes |
|---|---|---|
| Personal Income Tax (PIT) | 20% | Flat rate on gross employment income. Withheld at source by the employer (PAYE). No progressive bands. |
| Employee Pension Contribution | 2% | Deducted from gross salary and transferred to employee’s individual pension account. Mandatory for Georgian citizens and residents under retirement age. |
| Employer Pension Contribution | 2% | Paid by employer on behalf of employee. Combined with employee contribution, total funded pension is 4–6% depending on government co-contribution. |
| Government Co-contribution | Up to 2% | 2% for annual salaries under GEL 24,000. 1% for salaries between GEL 24,000 and GEL 60,000. No state contribution above GEL 60,000. |
| Foreign National Opt-Out | Available | Non-Georgian citizens and non-permanent residents may opt out of the funded pension scheme. The EOR manages the opt-out process during onboarding. |
| Payroll Tax Reporting | Quarterly | Returns filed with the Revenue Service of Georgia by the 20th of the month following each quarter. Payment due by end of the following month. |
| Payment Currency | GEL, USD, or EUR | Tax filings are denominated in Georgian Lari (GEL). Payroll payments may be made in GEL, USD, or EUR. Tax reporting must reflect GEL equivalent. |
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.
Leave Entitlements and Public Holidays in Georgia
(143 for complications / twins)
(paid + unpaid combined)
Leave can be requested after 11 months of service in the first year. From year two, it may be taken at any agreed time. Unused leave must be compensated proportionally on termination.
Several holidays follow the Orthodox calendar and fall on variable dates each year. Confirm exact dates annually. Work on public holidays requires additional compensation or time off in lieu as agreed in the contract.
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.
Contractor vs Employee: Key Risk Indicators in Georgia
Georgian labour authorities assess the actual working relationship, not the contract title. If the factors below are present, the relationship is likely to be treated as employment regardless of what the agreement says. Reclassification triggers back taxes, pension contributions, and penalties.
The company sets the working hours and schedule rather than the individual working when and how they choose.
A manager directly supervises daily work, assigns tasks, and reviews output in the same way they would an employee.
The individual uses hardware, software, or resources provided by the company rather than their own tools and infrastructure.
The individual works exclusively or primarily for one client over an extended period, with limited ability to take on other clients.
The relationship has continued for many months or years without a clear project end point, resembling a permanent employment arrangement.
The individual attends company meetings, uses an internal email address, appears in the org chart, or is otherwise integrated into the day-to-day running of the business.
Back taxes, pension contributions (2% employee + 2% employer), and administrative penalties apply from the start of the relationship — not just going forward.
Hiring through an EOR places the worker in a compliant employment structure from day one. There is no classification ambiguity and no reclassification risk.
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.
Step-by-Step: Hiring Through an EOR in Georgia
Most hires in Georgia complete the full EOR onboarding process in one to three weeks. Delays typically come from missing documentation, not the hiring model. Having identification, tax details, and bank information ready before step one speeds the timeline significantly.
Agree on the role title, salary, working hours, and benefits. The EOR confirms the position should be structured as employment rather than contracting and flags any misclassification risk before anything is signed.
The EOR provides a full cost breakdown covering gross salary, 20% income tax, 2% employer pension contribution, the EOR service fee, and any optional benefits. No surprises after the offer is made.
The EOR prepares a Georgian and English dual-language contract compliant with the Labour Code. The agreement covers salary, hours, leave, probation terms, IP assignment, confidentiality, and termination conditions.
The employee provides their identification document, Georgian personal number or tax ID, and bank account details. For foreign nationals, additional documentation may be required for pension opt-out or residence registration.
The EOR registers the employee with the Revenue Service of Georgia and the Pension Agency. Payroll is set up in the electronic tax system. Foreign nationals who qualify for pension opt-out complete that process at this stage.
The employee begins work. The EOR manages monthly payroll processing, quarterly tax filings with the Revenue Service, pension contributions, payslip generation, and leave tracking. You manage the day-to-day work.
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.
EOR vs Local Entity in Georgia: Full Comparison
Hire in days with no entity setup. The EOR handles all compliance, payroll, and contracts. Best for 1–10 employees, market testing, or multi-country teams where Georgia is one of several hiring locations.
Full legal presence in Georgia. Suits companies with 10+ employees in-country, a physical office, or a long-term strategic commitment. Required for certain local equity structures.
| Factor | EOR | Local Entity |
|---|---|---|
| Setup Time | 1–3 weeks to first payroll | Days for registration, weeks for full setup (bank, tax, payroll) |
| Upfront Cost | Low. No registration or legal setup fees. | Moderate. Registration fees, notary costs, bank account, legal advice. |
| Ongoing Cost | Monthly per-employee fee. Georgia typically $200–$500. | Accountant, payroll provider, legal retainer. Lower per-head at scale. |
| Compliance Responsibility | EOR bears legal employer liability | Full liability sits with your entity |
| Payroll and Tax Filing | Fully managed by EOR including quarterly Revenue Service filings | Your responsibility — requires local payroll setup and tax registration |
| Contract Drafting | Bilingual contracts prepared by EOR, compliant with Labour Code | You are responsible — requires local legal support for drafting |
| Scalability | Highly flexible. Add or remove employees without structural change. | More fixed. Ongoing obligations remain even at low headcount. |
| Market Testing | Ideal. Enter and exit without entity liquidation process. | Not suited. Liquidation requires formal process and takes time. |
| Best For | 1–10 hires, market entry, distributed teams, multi-country hiring | 10+ employees, long-term presence, physical office in Georgia |
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.
What to Look for When Choosing an EOR for Georgia
Georgia’s EOR market is less saturated than Western Europe. Provider quality varies more than a global brand name suggests. These are the criteria that separate reliable providers from those that will create problems when something goes wrong.
Confirm the provider holds a direct employer registration with the Revenue Service of Georgia. Providers operating through local partners introduce an extra layer that slows down payroll corrections, contract amendments, and compliance responses. Ask specifically — do not assume from the provider’s country list.
Employment contracts in Georgia must be enforceable under the Labour Code. Providers who use generic English-only templates without local-language versions create legal risk. Confirm the provider drafts dual-language Georgian and English contracts that reflect current Labour Code requirements.
Non-Georgian citizens and non-permanent residents are entitled to opt out of the mandatory pension scheme. Not all EOR providers handle this correctly or explain it to employees during onboarding. Confirm the provider processes opt-outs as a standard part of the setup — not on request after payroll has already deducted contributions.
Ask how the provider handles terminations — specifically the 30-day notice requirement, severance calculation, and written grounds obligations under Georgian law. A provider who simply executes your instruction without advising on process risk is not adequate for a market where procedure matters.
Foreign nationals must be registered with Georgian labour authorities within 30 days of starting work. If you are hiring international employees, confirm the provider handles this registration and can issue employment confirmation letters for residence permit applications.
Georgia is a cost-effective market, but EOR fees vary significantly. Ask for a full cost breakdown including setup fees, monthly service fees, offboarding costs, and whether health insurance or benefits administration carries a markup. Percentage-of-salary models become expensive for senior hires even in lower-cost markets.
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.

