How to Use An Employer of Record in
Georgia

Hiring in Georgia requires compliance with the Labour Code of Georgia, which mandates specific contract clauses, registration with the Revenue Service within three working days of employment start, and social tax contributions of 2% of gross salary alongside mandatory pension contributions. An Employer of Record in Georgia becomes your staff's legal employer, delivering full compliance with these obligations while you hire without establishing a Georgian LLC or representative office. The EOR removes the risk of penalties from the Revenue Service for late registration or miscalculated social tax, letting you focus on building your team instead of navigating Tbilisi's bureaucracy.

What Is an Employer of Record in Georgia?

An Employer of Record in Georgia is a third-party organisation that becomes the legal employer of your staff under Georgian law, handling all statutory obligations including payroll, tax withholding, social contributions, and compliance filings while you retain complete operational control over day-to-day work, performance management, and business objectives. The EOR holds the employment contract, submits mandatory registrations, and acts as the Employer of Record with the Revenue Service and other government bodies.

Under the Labour Code of Georgia, every employment relationship requires a written contract containing mandatory clauses on job description, remuneration, working hours, and place of work. The EOR ensures your contracts meet these requirements, calculates and withholds income tax (which ranges from 0% to 20% on a flat scale above the annual threshold), remits the 2% social tax to the Revenue Service, and manages the mandatory accumulated pension contribution of 2% of gross salary for employees under age 60. The EOR also monitors any applicable collective agreements and ensures your employment terms meet or exceed statutory and sector-specific minimums.

The division of responsibility is clear: you define the role, manage performance, assign tasks, and make all business decisions about your employee's work. The EOR owns the legal employment relationship, issues compliant contracts, runs monthly payroll in Georgian Lari, files tax and social security returns with the Revenue Service, maintains employment records, and handles any termination procedures in line with the Labour Code of Georgia.

How Does an Employer of Record Work in Georgia?

When you use an EOR to hire in Georgia, the process follows a clear sequence that ensures compliance with Georgian employment law from day one. The EOR coordinates every step, from contract preparation to ongoing payroll and tax administration, while you focus on integrating your new employee into your operations. Here is how it works in practice.

Step 1: Define Employment Terms

You provide the EOR with the job title, salary, working hours, and any specific benefits or bonuses you want to offer. The EOR checks these terms against the Labour Code of Georgia and any applicable collective agreements to confirm they meet statutory minimums. If the role falls under a sector with a collective agreement, the EOR identifies any additional obligations such as enhanced leave entitlements or sector-specific wage floors. This initial review ensures your offer is both competitive and compliant before the contract is drafted.

Step 2: EOR Compliance Check

The EOR verifies that your proposed employment terms comply with Georgia's statutory framework. As of 2026, Georgia does not have a national minimum wage for private sector employees, but public sector minimums exist and collective agreements may set floors for certain industries. The EOR confirms working time does not exceed 40 hours per week or the annual limit of 2,080 hours under the Labour Code. The EOR also ensures correct classification: employees in Georgia must be hired under an employment contract governed by the Labour Code, not as independent contractors unless the relationship genuinely meets the criteria for self-employment.

Step 3: Draft Employment Contract

The EOR prepares a written employment contract in Georgian, as required by law when the employee requests it or when the contract exceeds one month. The contract must include the employee's full name, job title and description, place of work, remuneration amount and payment terms, working hours, annual leave entitlement, notice period for termination, and the contract start date. The Labour Code of Georgia permits both indefinite and fixed-term contracts, but fixed-term contracts are limited to a maximum of five years and can only be used where the nature of the work justifies temporary employment. The EOR sets the probation period, which cannot exceed six months for indefinite contracts or exceed the contract duration for shorter fixed-term agreements.

Step 4: Register with Authorities

Once the contract is signed, the EOR registers the employment relationship with the Revenue Service of Georgia within three working days of the employment start date, as required by law. The Revenue Service maintains the centralised employment register and administers both income tax and social tax. Late registration can result in administrative fines and penalties. The EOR also registers the employee for the mandatory accumulated pension scheme, deducting 2% of gross salary each month and remitting it alongside the employer's 2% social tax contribution.

Step 5: Run Monthly Payroll

The EOR processes payroll in Georgian Lari on the agreed schedule, typically monthly. Each pay cycle, the EOR calculates gross salary, deducts employee income tax at the applicable rate (Georgia operates a flat 20% rate on employment income above the annual tax-free threshold of GEL 6,000 as of 2026, with a 0% rate on income below this threshold), deducts the 2% employee pension contribution, and remits the 2% employer social tax to the Revenue Service. The EOR issues compliant payslips and ensures all payments reach the employee's Georgian bank account on time.

Step 6: Ongoing Compliance Management

The EOR handles all recurring compliance obligations throughout the employment relationship. This includes filing monthly tax and social contribution returns with the Revenue Service, maintaining employment records as required by the Labour Code, tracking and administering statutory leave entitlements (employees are entitled to a minimum of 24 working days of paid annual leave), ensuring compliance with working time limits and rest period requirements (employees must receive at least 42 consecutive hours of weekly rest), and monitoring any changes to Georgian employment legislation or collective agreements that affect your employees. The EOR also manages any inspections or information requests from the Labour Inspection Department within the Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs.

Step 7: Handle Termination Procedures

If you decide to terminate the employment, the EOR manages the process in full compliance with the Labour Code of Georgia. Georgian law distinguishes between termination with just cause (where no notice or severance is required) and termination without just cause. For termination without just cause, notice periods are governed by the employment contract or applicable collective agreement, but the Labour Code sets a default minimum of 30 calendar days unless otherwise agreed. Severance pay is not mandated by the Labour Code for private sector employees unless stipulated in the employment contract or collective agreement. The EOR calculates any final payments including unused leave, issues the final payslip, files the termination with the Revenue Service, and provides the employee with all required documentation.

Employment Laws and Compliance an Employer of Record Handles in Georgia

When you hire through an EOR in Georgia, they assume full responsibility for compliance with Georgian employment legislation, removing the need for you to build an in-country HR and legal function. The EOR monitors regulatory changes and ensures your employment practices meet every statutory obligation.

• Employment Contracts: Every employment relationship must be documented in a written contract under the Labour Code of Georgia if it exceeds one month or if the employee requests it. The contract must specify job title, remuneration, working hours, place of work, leave entitlement, and termination notice period. Failure to provide a compliant contract can result in administrative penalties from the Labour Inspection Department and exposes your company to employment claims.
• Income Tax Withholding: Employers in Georgia must withhold income tax from employee salaries at a flat rate of 20% on annual income exceeding GEL 6,000 (income below this threshold is taxed at 0%). The EOR calculates and withholds the correct amount each pay period and remits it to the Revenue Service by the deadline. Non-compliance can result in penalties, interest charges, and potential criminal liability for tax evasion.
• Social Tax and Pension Contributions: Employers must pay a 2% social tax on gross salary and deduct a 2% employee pension contribution for workers under age 60, remitting both to the Revenue Service monthly. These contributions fund Georgia's pension system. Late or incorrect payments trigger penalties and interest, and persistent non-compliance can lead to enforcement action including asset seizure.
• Statutory Leave Entitlements: The Labour Code of Georgia guarantees employees a minimum of 24 working days of paid annual leave, which increases for employees in hazardous conditions or under certain collective agreements. Employees are also entitled to paid public holidays (Georgia observes 15 public holidays in 2026) and unpaid leave in specific circumstances. The EOR tracks accruals, approves leave in line with statutory rules, and ensures you never fall below the legal minimum.
• Termination and Severance: Termination without just cause requires notice as specified in the employment contract or collective agreement, with a default of 30 calendar days under the Labour Code. Severance pay is not a statutory requirement unless included in the contract or collective agreement. The EOR ensures termination procedures follow the contract terms and files the termination with the Revenue Service to avoid penalties.
• Working Time Limits: The Labour Code of Georgia caps normal working time at 40 hours per week and 2,080 hours per year. Overtime must be compensated at a rate agreed in the contract, with a minimum of 1.25 times the regular hourly rate unless otherwise specified. Employees must receive at least 42 consecutive hours of weekly rest. Breaching working time rules can result in fines from the Labour Inspection Department and employee claims for unpaid compensation.
• Health and Safety: Employers in Georgia must comply with the Law on Occupational Safety and provide a safe working environment, conduct risk assessments, and supply necessary protective equipment. The Labour Inspection Department enforces these obligations and can issue fines or suspend operations for serious violations. The EOR ensures health and safety documentation is in place and maintained.
• Data Protection and Privacy: The Law on Personal Data Protection governs the processing of employee data in Georgia, requiring lawful basis, data security measures, and employee rights to access and correct their information. The Personal Data Protection Service oversees compliance and can impose fines for breaches. The EOR processes employee data in compliance with these requirements and maintains necessary consents and records.
• Collective Agreements: Some sectors and employers in Georgia operate under collective agreements that set terms more favourable than the Labour Code minimums, including higher wages, longer notice periods, or additional leave. The EOR identifies whether a collective agreement applies to your employees and ensures full compliance with its provisions, protecting you from employee claims and trade union disputes.
• Employment Register: All employment relationships in Georgia must be registered with the Revenue Service within three working days of the start date. This registration is mandatory and forms the basis for tax and social contribution administration. The EOR handles all registration filings and updates, ensuring you meet the legal deadline and avoid penalties for late or incorrect submissions.

How Much Does It Cost to Use an Employer of Record in Georgia?

The total cost of hiring through an EOR in Georgia has two components: the EOR service fee and the statutory employer costs mandated by Georgian law. Statutory costs are fixed percentages and cannot be reduced. Playroll's EOR service fee starts from $399 per employee per month and is billed separately from payroll costs, giving you complete visibility over what you pay for employment versus what you pay for the service.

Let's look at an example that includes a base salary and the EOR service fee.

The EOR service fee covers drafting and maintaining compliant employment contracts, registering employees with the Revenue Service, processing monthly payroll in Georgian Lari, calculating and remitting all income tax and social contributions, filing statutory returns, administering leave and benefits, managing termination procedures, and providing ongoing compliance monitoring and updates as Georgian employment law evolves.

Employer of Record vs Setting Up an Entity in Georgia

The decision between using an EOR and establishing your own entity in Georgia depends on your hiring plans and long-term commitment. Foreign companies typically register a Limited Liability Company (LLC) in Georgia, which involves submitting incorporation documents to the National Agency of Public Registry, appointing a local director, opening a corporate bank account, and registering with the Revenue Service for tax purposes. The process takes approximately four to six weeks and costs between $2,000 and $5,000 depending on legal and administrative support, plus ongoing accounting and compliance costs.

For companies hiring fewer than 10 to 15 employees in Georgia, an Employer of Record is almost always the faster and more cost-effective route.

Playroll also supports your long-term growth through its Global Entity Setup product, which handles entity incorporation and local payroll in 120+ countries, so you can transition from EOR to your own compliant entity in Georgia when the time is right, without switching providers or rebuilding your HR processes.

How Long Does It Take to Hire Someone in Georgia Through an Employer of Record?

You can typically hire and onboard an employee in Georgia through an Employer of Record in 5 to 10 business days from the point you provide all required information to the point your employee is registered and can legally start work.

• Stage 1: Contract preparation and signing (1 to 2 business days): The EOR drafts a compliant employment contract in Georgian, incorporating all mandatory clauses required by the Labour Code of Georgia and any terms specific to your offer. Timing depends on how quickly you approve the draft and the employee signs.
• Stage 2: Government registrations (1 to 3 business days): The EOR registers the employment relationship with the Revenue Service of Georgia, which must be completed within three working days of the employment start date as required by law. Missing this deadline can result in administrative penalties and delays in processing payroll and tax obligations.
• Stage 3: Payroll configuration and first cycle (2 to 3 business days): The EOR sets up the employee in its payroll system, configures salary, deductions for income tax and pension contributions, and prepares the first payslip. Georgian payroll typically runs monthly, so the first payslip is issued at the end of the employee's first pay period.
• Stage 4: Georgia-specific requirements (1 to 2 business days): If the role falls under a collective agreement or requires specific sector registrations, the EOR identifies and completes these filings. This step often runs in parallel with contract preparation and does not typically extend the overall timeline unless the collective agreement requires union notification or approval.

The timeline can extend if your employee does not have a Georgian bank account ready for salary payments, if you request non-standard contract terms that require additional legal review, or if there are delays in obtaining signatures from the employee. Providing complete and accurate employee information upfront is the single most effective way to keep the process on track.

By comparison, setting up your own LLC in Georgia and hiring through that entity takes four to six weeks at minimum, not including the time required to establish local payroll, open a corporate bank account, and recruit or appoint HR and accounting support.

How Playroll's Employer of Record Process Works in Georgia

Playroll's EOR service in Georgia is built to get your employees onboarded and compliant fast, without requiring you to navigate Georgian employment law or government filings.

1. You Define the Role and Terms

You provide Playroll with the job title, salary, benefits, working hours, and start date. Playroll reviews these terms against the Labour Code of Georgia and any applicable collective agreements to confirm compliance before moving forward.

2. Playroll Prepares a Compliant Contract

Playroll drafts a written employment contract in Georgian that includes all mandatory clauses required by the Labour Code, including job description, remuneration, working hours, and notice period. The contract is issued under Playroll's legal entity in Georgia, making Playroll the legal employer while you retain full control over day-to-day work.

3. Employee Onboarded and Payroll Goes Live

Once the contract is signed, Playroll registers the employment with the Revenue Service of Georgia within the statutory three-day deadline and configures payroll. Your employee is typically ready to start work within 5 to 10 business days, and Playroll processes their first salary payment in Georgian Lari at the end of the first pay period.

4. Playroll Manages Ongoing Compliance

Playroll handles all recurring filings, tax and social contribution remittances, leave administration, and compliance monitoring for as long as the employee remains on your team. If your hiring in Georgia grows to the point where establishing your own entity makes sense, Playroll can support that transition through its global entity setup service, letting you move from EOR to your own compliant Georgian entity without changing providers.