Payroll in Georgia - Salary Payments and Outsourcing

Payroll in Georgia refers to the set of activities carried out in connection to the payment of salaries of Georgian employees. Depending on the size of a company, payroll can be completed in house, by the accountant(s) hired by the respective business, or it can be outsourced to a company specialized in human resources.

If you’re looking to outsource then please contact our team with some basic related info, such as: name of company and its residence (inside or outside Georgia), number of employees, quantum of salaries.

Quick Facts
What does payroll entail?	Payroll in Georgia refers to all matters deriving from the payment of salaries.
Ways to conduct payroll in Georgia	In-house (procedures completed by the company hiring the employee) or outsourcing (to another company specialized in any employment matter)
Who can provide payroll services?	Payroll in Georgia can be provided by accountants or human resources specialists.
Payroll elements	salary, type of employment, number of worked hours in a month, public holidays, annual leave, maternity leave, etc.
Currency in which salaries are paid	Georgian Lari (GEL)
Number of paid leave days	24 days/ year
Standard working week	40 hours per week for a full-time employment contract
Payroll taxes	20% personal income tax (paid by the employee), 2% pension fund contribution (the employer and the employee pay 2% each)
Number of public holidays	18 days/ year
How many salaries are offered in a financial year?	12 salaries, but some employers offer the 13th salary.
Salary payment obligations for sick employees	The employer pays the salary for up to 40 days of incapacity to work.
Maternity rights	Up to 730 calendar days of leave in total (126 days of maternity leave plus 604 days of parental leave; 143 + 587 days in case of twins or childbirth complications), of which 183 days are paid (200 days in case of twins or complications).
Parental rights granted to employees upon the adoption of a child	90 calendar days paid leave and up to 550 calendar days leave upon request. The rule applies as long as the adopted child is below 1 year old.
Probation period upon signing an employment contract	6 months
Accident insurance policies	Employers are required to provide accident insurance to employees who carry out work activities considered hazardous (the rule was imposed starting with 2019).

Typically, a small company will handle payroll in Georgia by itself, through its own accountant, while a large company will generally opt to outsource this service (however, many large companies can also have their own human resources department) – the decision for one of the two options depends on the company’s management plans.

Regardless of the manner in which payroll is conducted, it will always include a set of mandatory elements, which can be detailed by our team of lawyers and payroll assistants in Georgia.

What are the elements of payroll in Georgia?

Individuals who have the responsibility of paying the salaries of Georgian employees must analyze a set of elements, which are also important for the calculation of the Georgia payroll taxes. In the list below, our Georgian lawyers present some of the key components of payroll:

the salary itself, paid on a monthly basis;
the number of hours worked in a month (to this, it will be added overtime – where applicable, or the number of hours or days when the employee was absent from work due to various reasons);
annual leave (all employees in Georgia have the right to benefit from their annual leave);
public holidays;
other types of leaves (sick days, maternity, paternity, parental leave, etc.).

Payroll assistance in Georgia also includes issues that appear when an employment contract is terminated, regardless of the reason. Employees must receive a notice period and a severance pay, which can vary based on the reason that determined the termination of the contract. In the infographic below, you can observe the main elements of payroll services in Georgia:

Payroll in numbers

Now that we have presented some of the key components of the issues concerning employment and the payment of salaries, our law firm in Georgia has prepared a short presentation on the number of days, hours, etc., concerning the elements presented above, including the Georgia payroll taxes:

an individual must be paid 12 times during a financial year (starting from 1st of January and ending on 31st of December), but he/she may also receive the 13th salary (depending on the company’s policies);
the standard working week is comprised of 40 hours of work, divided into 8 hours per day (the maximum number of hours in week can increase to 48);
employees can receive 24 paid days as annual leave, and in some industries, workers can obtain an additional 10 paid days;
provided that an employee is sick, the employer must pay the person his/her regular salary for a period of up to 40 consecutive days of incapacity (or maximum 60 days in a 6 months period);
when an employment contract is terminated, the Georgian law states that the notice period is 30 days;
on the opposite side, when an employment contact is signed, the new employee can be in probation for a period of up to 6 months (provided that the employee is not suitable for the job, the contract can be easily terminated during probation, as there isn’t a statutory notice period).

There are other matters that should be taken into consideration, such as maternity or paternity leave and the financial obligations the company has towards employees who have become parents. Our attorneys in Georgia can offer further details.

Concerning the Georgia payroll taxes, we mention that the employment tax is 20% – calculated from the value of the salary (paid by the employee). To this, a 2% contribution to the pension fund is made by the employer and by the employee (2% each).

We invite you to contact our law firm in Georgia for more information on payroll, employment taxes and other types of taxes charged here. We can also present the taxes charged to those who buy a property in Georgia.