Employer of Record in Georgia

When expanding your team into Georgia, companies have several avenues to onboard talent, each with distinct legal and operational considerations. Navigating Georgia's employment regulations requires a thorough understanding of local labor laws, tax obligations, and social security contributions to ensure compliance and avoid potential penalties. Establishing a compliant employment framework from the outset is crucial for successful international expansion.

For businesses looking to hire in Georgia, the primary options include:

• Establishing a local legal entity: This involves incorporating a subsidiary or branch office in Georgia, which entails significant administrative overhead, legal fees, and ongoing compliance requirements.
• Utilizing an Employer of Record (EOR): Services like Rivermate allow companies to hire employees in Georgia without setting up their own entity. The EOR acts as the legal employer, handling all compliance and administrative tasks, while the client company manages the day-to-day work of the employees.
• Hiring independent contractors: This option offers flexibility but requires careful assessment to ensure the contractor relationship is correctly classified under Georgian law, avoiding risks of misclassification.

How an EOR Works in Georgia

An Employer of Record simplifies the complexities of international employment by taking on the legal responsibilities of an employer. In Georgia, an EOR handles a comprehensive range of tasks:

• Payroll processing and tax withholding: This includes calculating and disbursing salaries, social contributions, and income taxes in accordance with Georgian tax laws.
• Compliance with local labor laws: Ensuring employment contracts, working hours, leave policies, and termination procedures adhere to the Labor Code of Georgia.
• Benefits administration: Managing and offering locally compliant employee benefits, such as health insurance, pension contributions, and other mandatory or customary benefits.
• Onboarding and offboarding: Facilitating smooth hiring and termination processes, including necessary paperwork and compliance with local regulations.
• Visa and immigration support: Assisting with work permits and visa applications for foreign employees in Georgia, where applicable.

Benefits for Companies Hiring in Georgia Without Establishing a Local Entity

Opting for an EOR service provides significant advantages for businesses aiming to tap into Georgia's talent pool without the commitment of setting up a local entity:

• Speed to market: Quickly onboard employees in Georgia, reducing the time and resources typically associated with establishing a new legal entity.
• Reduced legal and compliance risk: The EOR assumes responsibility for navigating Georgia’s intricate employment laws, protecting the client company from potential legal issues and penalties.
• Cost-effectiveness: Avoid the substantial upfront and ongoing costs involved in company registration, local accounting, and legal services.
• Access to local talent: Recruit and hire top talent in Georgia, leveraging local expertise without geographical limitations.
• Flexibility and scalability: Easily expand or contract your team in Georgia, adapting to business needs without long-term commitments.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Georgia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Georgia.

Employers in Georgia must contribute to social security and payroll taxes, including the Unified Social Tax (UST), which covers pension, healthcare, and social insurance. The pension fund contribution is split as 20% from the employer and 2% from the employee. Healthcare and social insurance rates vary annually and are calculated based on gross salaries. Employers are also responsible for withholding a flat 20% income tax from employee wages and remitting these amounts monthly by the 15th, with annual reporting due by March 31.

Employees can benefit from standard deductions, dependent allowances, and other specific deductions, reducing taxable income. Employers must adhere to strict reporting deadlines for payroll taxes and income tax, ensuring compliance to avoid penalties. Foreign entities should consider double tax treaties, permanent establishment rules, and VAT registration requirements, which may influence their tax obligations in Georgia.

Georgia's salary landscape varies by industry, role, and location, with typical annual salaries ranging from GEL 20,000 to GEL 80,000. Notably, IT roles like software developers earn GEL 40,000–70,000, project managers GEL 50,000–80,000, and finance professionals GEL 30,000–65,000. Salaries tend to be higher in Tbilisi and in sectors such as IT, tourism, and manufacturing, reflecting regional and industry-specific trends.

While Georgia lacks a statutory minimum wage for the private sector, employers should benchmark against market standards and sector agreements. Compensation packages often include bonuses (annual, performance, holiday) and allowances (transportation, meals, housing). The standard payroll cycle is monthly, with salaries paid via bank transfer, and employers must withhold taxes and social contributions.

Salary trends for 2025 indicate rising demand for IT specialists and tourism sector workers, with companies increasingly offering comprehensive benefits to attract talent. Regional disparities persist, with Tbilisi generally offering higher compensation.

In Georgia, labor law mandates certain leave types such as public holidays and maternity leave, while other leaves like annual vacation and sick leave are at employer discretion. Employers have flexibility to design their leave policies, often offering 15-24 paid vacation days annually, with specifics outlined in company policies. Public holidays in 2025 include New Year's Day, Orthodox Christmas, Independence Day, and others, with employees generally entitled to time off.

Maternity leave is statutory, lasting 730 days with partial state social insurance coverage, while paternity leave is 2 weeks, and adoption leave is similar to maternity leave. Sick leave is not legally mandated; its provision depends on employer policy, which may include paid or unpaid options. Additional leave types such as bereavement, study, sabbatical, and personal leave are offered at employer discretion to enhance benefits.

Georgia employers must provide mandatory benefits including Social Security, Medicare, unemployment insurance, workers' compensation, FMLA (for employers with 50+ employees), minimum wage ($7.25/hour), and meal breaks (30 minutes for 6+ hours). Optional benefits commonly offered include PTO, paid holidays, health, dental, vision, life, disability insurance, retirement plans (notably 401(k)s), EAPs, wellness programs, and tuition reimbursement, which help attract and retain talent.

Health insurance is prevalent but not mandated for all employers; plans typically include HMOs, PPOs, and HDHPs, with employer contributions varying. Retirement plans, especially 401(k)s with employer matching, are expected by employees, while traditional pensions are less common. Larger companies tend to offer more comprehensive benefits, including extensive health coverage, PTO, and perks, whereas small businesses may provide a more limited package.

Employment agreements in Georgia are fundamental for defining the employer-employee relationship, emphasizing clarity and legal compliance. The law recognizes two main types: fixed-term contracts, with a set duration, and indefinite-term contracts, which continue until terminated by either party. Properly drafted agreements should include essential clauses such as job description, salary, probationary period, confidentiality, non-compete, and termination procedures to minimize disputes and ensure legal adherence.

Key contractual requirements include specifying employment type, duration, and mandatory clauses. Probation periods are common, typically lasting up to 3 months, allowing employers to assess new hires. Termination procedures must follow legal standards, including notice periods, which vary based on contract type and duration.

Remote work in Georgia is increasingly common, with existing labor laws applying equally to remote and on-site employees. Key legal considerations include adherence to the Labor Code, occupational safety, data protection laws, and taxation regulations. Although there are no specific remote work laws, employees can negotiate remote arrangements, and employers are required to ensure equal treatment and opportunities.

Flexible work options are expanding, including arrangements such as telecommuting, flexible hours, and part-time work. Employers should develop comprehensive policies addressing data security, employee well-being, and legal compliance to optimize remote work productivity and safety.

In Georgia, employment is primarily "at-will," allowing either party to terminate employment at any time without cause, unless a contract or policy specifies otherwise. Employers must follow legal and procedural standards to ensure lawful termination, including maintaining documentation, applying policies consistently, and providing final pay and benefits information. While no statutory notice period is required, adherence to contractual or policy-based notice periods is essential.

Severance pay is not mandated by law but may be offered at the employer's discretion, often calculated based on tenure, such as one to three weeks of pay per year of service:

Termination reasons can be with or without cause, including misconduct or restructuring, but must avoid discrimination, retaliation, breach of contract, or violations of public policy. Employers should ensure fair procedures, including documentation, clear communication, and return of property, to mitigate wrongful dismissal risks. Employees are protected from wrongful termination based on race, gender, age, disability, or protected activities, emphasizing the importance of non-discriminatory practices in employment decisions.

Georgia has experienced a notable increase in the use of freelancers and independent contractors, driven by the demand for specialized skills and flexible staffing. This trend necessitates a solid grasp of the legal and operational frameworks, particularly the importance of correctly classifying workers to avoid legal and financial repercussions. The state uses a control-based test to differentiate between employees and independent contractors, focusing on behavioral and financial control, and the nature of the relationship. Misclassification can lead to back taxes and penalties.

Contracts are crucial in defining the terms of engagement, including scope, payment, and IP rights. Key contract elements include clear scope of work, payment terms, and IP assignment clauses to ensure client ownership of work products. Tax obligations for contractors include paying estimated taxes and self-employment tax, while clients must issue 1099 forms for payments over $600. Contractors are responsible for their own insurance, including liability and health coverage.

Independent contractors are prevalent in various sectors such as technology, creative services, consulting, construction, professional services, healthcare, and entertainment. Businesses must understand the specific regulatory requirements of their industry to effectively utilize independent contractors in Georgia.

Georgia offers a streamlined visa and work permit system, attracting foreign talent and investment. The primary work visa is the D1 Employment Visa, valid for up to one year and renewable, requiring an employment contract and proof of qualifications. Other common visas include the D3 Business/Investment Visa, D5 for representatives of foreign companies, and short-term visas for up to 90 days. The application process involves securing a job offer, gathering necessary documents (passport, employment contract, educational certificates, police clearance), and applying at Georgian embassies or consulates, with processing times typically between 10-30 days and fees ranging from $50 to $200 USD.

Employers must ensure foreign employees possess valid work permits and visas, comply with labor laws, and report employment changes. Employees are responsible for adhering to visa conditions, renewing permits timely, and avoiding unauthorized activities. Pathways to permanent residency include investment, marriage, or long-term residence (10+ years). Family members can obtain dependent visas with proof of relationship and financial support.

Compliance is critical; violations can lead to fines, deportation, or penalties. Both employers and employees must stay informed of Georgian immigration laws to maintain legal status.