Georgia Payroll Considerations for Expanding Multinational Businesses

Georgia Payroll Considerations for Expanding Multinational Businesses

By Kira Rubiano

Situated at the strategically important crossroads where Europe meets Asia, Georgia has a unique and diverse cultural heritage. With a population of about 4 million, the country is known for its delicious cuisine and its wine. In fact, wine culture in Georgia dates back thousands of years and incorporates grapes not known to other parts of the world. Wines remain a significant export for Georgia, with over 10 million bottles of wine exported per year. Georgia has lost and gained and lost and regained independence throughout the years. Despite its tumultuous history, Georgia’s economy has been steadily growing by 5% annually over the past decade. The country is experiencing an economic recovery in 2017 which means more and more companies are likely to continue to set up and operate business in-country. Here are some of the Georgia payroll facts you should be aware of:

Social Insurance

Although unusual in many parts of the world, Social Insurance in its compulsory form does not exist in Georgia. According to Georgian legislation, neither the employer nor employee is obligated to pay Social Insurance Contributions. Therefore, retirement plans are offered by private insurance companies.

Personal Income Tax

Personal income tax rate is 20%.

Employment

The employment agreement is executed in writing or verbally, for definite, indefinite or for the period of employment duration.
An employment agreement shall be made in writing if labor relations continue for more than three months. If a written employment agreement is executed in several languages, it should contain the acknowledgment of the prevailing language. Georgian and Russian are the official languages.

Paid leave

An employee is entitled to a paid leave of no less than 24 working days and 15 calendar days are offered as unpaid leave per year. An employee has the right to be fully paid during official country holidays.

Leave for the reason of pregnancy, childbirth, and childcare

An employee is entitled to request leave for the reason of pregnancy, childbirth, and childcare up to 730 calendar days; 183 calendar days are payable and in the case of complicated childbirth or multiple birth, it is 200 calendar days.

Leave for the reason of adoption of a newborn

An employee adopting a newborn younger than 12 months, upon his/her request, is entitled to take a leave for the reason of the adoption of the newborn for 550 calendar days after the birth of the child. Out of this leave, 90 calendar days are paid.
Compensation of the leave taken for the reason of pregnancy, childbirth, and childcare also for adoption of a newborn
Leave taken for the reason of pregnancy, childbirth, and childcare and also for adoption of a newborn are compensated from the state budget in the amount of 1000 GEL. The employer and employee may agree on additional compensation.

Additional leave for childcare

An employee, upon his/ her request, is entitled to take no less than a successive two weeks in a year (or in portions) of unpaid leave for childcare for the period 12 months before to the child turning five. Additional leave for childcare may be given to any person who takes care of a child.

Unused leave

If employment agreement is terminated for the reasons set forth in the Labour Code Law, the employer shall pay the employee any unused leave calculated in proportion to the duration of labor relations.

Georgia Payroll Procedure

Remuneration shall be paid out once a month.

Termination of Employment

Options for the termination of a labor agreement are available for both parties. If the initiator of the termination is the employee, then he/she must provide notice to the employer about the termination no less than 30 calendar days prior in written form.
If the initiator of the termination is the employer, he/she shall give the employee at least 30 calendar days’ prior written notice. The employee shall be granted a remuneration pay of at least one month’s salary within 30 calendar days after the termination of the labor agreement.

If labor relations are terminated, the employer shall make final payment to the employee no later than seven calendar days, unless otherwise directed by the labor agreement or law.


The above is merely scratching the surface of payroll in Georgia. We want to thank the team at Eurofast for their contributions to this post. Celergo is ready and happy to assist you with your payroll needs in Georgia, feel free to contact us if you have any questions!

 

**This article is for informational purposes only. It is not intended to constitute legal advice.

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