Payroll Compliance in Georgia: What Every Employer Needs to Know

If you employ people in Georgia, you have payroll obligations that go beyond simply paying salaries. Georgian labor and tax law requires employers to withhold income tax, manage pension contributions, maintain compliant employment contracts, and file regular reports with the Revenue Service.

Income tax withholding is the most fundamental obligation. Georgia has a flat personal income tax rate of 20%. As an employer, you are responsible for withholding this amount from each employee's gross salary and remitting it to the Revenue Service. The withholding must be reported and paid monthly.

Since 2019, Georgia has implemented a funded pension system. Employees born in 1976 or later are automatically enrolled, though they have the option to opt out within a specified period. The contribution is split three ways: 2% from the employee, 2% from the employer, and 2% from the government. If you have employees who are part of this system, you must calculate and remit both the employee and employer portions.

Employment contracts must comply with the Georgian Labor Code. Key requirements include specifying the position, salary, working hours, and leave entitlements. For fixed-term contracts, there are specific rules about maximum duration and renewal. Non-compliant contracts can create legal exposure in the event of disputes.

Payslips should detail gross salary, all withholdings, and net pay. While Georgian law does not prescribe a specific payslip format, providing clear documentation protects both the employer and employee.

Monthly filings with the Revenue Service include the declaration of withheld income tax and pension contributions. These are due by the 15th of the month following the payroll period. Late filings incur penalties regardless of the amounts involved.

When an employee leaves -- whether through resignation, termination, or end of contract -- there are specific requirements for final pay calculations, including accrued but unused leave, notice period pay, and any severance obligations under the contract or Labor Code.

EFS Group manages payroll for businesses ranging from two employees to over a hundred. We handle salary calculations, withholdings, filings, contract preparation, and termination processing -- so you can focus on managing your team rather than navigating compliance.