Hire Employees in Andorra

Two routes exist. Registering an Andorran entity gives you direct employment, followed by CASS enrolment.

An Employer of Record removes that setup. The EOR is the legal employer, runs payroll, affiliates the employee and remits contributions, while day-to-day direction stays with you.

Affiliation has a hard window. The employer must affiliate the employee during the seven days before the employment relationship starts, and at the latest on the day it starts. There is no grace period afterwards.

Andorra pairs moderate employer contributions with an exceptionally light income tax. The CASS takes 22% of gross in total — 15.5% from the employer and 6.5% from the employee — while income tax runs to a maximum of 10%.

The tax comparison with Spain is stark. Andorra has three bands with a €24,000 exempt minimum and a 10% ceiling; Spain has a top marginal rate of 47% and an exempt minimum near €5,550. On €60,000 of gross annual income the difference in income tax can exceed €12,000 a year. A double taxation convention between the two regulates mobility between them.

With only three bands and a €24,000 threshold, the majority of employees pay very little income tax or none at all.

Break-even rule of thumb: EOR fees begin to exceed the running cost of an Andorran entity somewhere between 12 and 20 employees. Model both — see EOR vs Entity for the framework.

The CASS contribution is 22% of gross monthly salary, split 15.5% employer and 6.5% employee. The employer calculates, deducts and remits the whole amount each month.

On a gross salary of €3,000 the employee has €195 withheld and the employer pays €465 on top — €660 in total. Some employers voluntarily assume a larger share of the contribution as an employee benefit.

Bonuses and incentives are fully contributory. Any additional bonus or incentive is added to base salary to form total gross, and contributions are due on the whole of it — there is no carve-out for variable pay.

Self-employed people contribute on a notional base, not real income. Under Llei 11/2023 the bases are set at 25%, 50%, 62.5%, 75%, 100%, 125% or 137.5% of the previous year’s average monthly global salary, chosen according to net income and turnover. With the average salary recently published at €2,426.70, the resulting quota runs around €480 to €550 a month.

For a newly formed company, the obligation to contribute begins 30 calendar days after registration in the Companies Register.

Gross monthly salaries in euros. Employer contributions are 15.5% with no ceiling.

Benchmarks below are gross monthly salaries in euros. Employer contributions are 15.5% with no ceiling, and any bonus or incentive must be contributed on in full.

Two separate deadlines apply, and the first is earlier than most jurisdictions. Salaries must be paid by the 3rd of the following month at the latest. CASS contributions must be made by the 15th of the following month at the latest.

Income tax has only three bands. The first €24,000 of annual income is exempt; income between €24,000 and €40,000 is taxed at 5%; and income above €40,000 at 10%.

Because the exempt minimum is so high relative to typical salaries, most employees pay very little income tax. The employer withholds it alongside the CASS deduction.

Payroll is otherwise straightforward: one contribution, one tax, and no equivalent of the French CSG or similar levies.

Three annual bands under the Andorran IRPF. Personal deductions may apply and are not reflected in these figures.

The working week is limited to 40 hours. Any hour worked beyond that must be paid as overtime, at a 40% increase on the base hourly wage.

Base salary is the amount agreed in the employment contract, with bonuses and incentives added to form total gross.

The most recent minimum wage figure located was €1,376.27 a month for 2024. That is not a 2026 figure — confirm the current statutory minimum before contracting, since it is revised periodically.

Remote working is increasingly common, and workplace health and safety measures are a standing employer obligation.

Contracts should record pay, hours, leave, notice and termination terms.

Affiliate the employee to the CASS within the seven days before the start date, and at the latest on the day the relationship begins. The employer must do this at every company where the person works.

Set both payment deadlines in the payroll calendar from the outset — the 3rd for salary, the 15th for contributions.

The working day is limited to 40 hours a week, with anything beyond paid as overtime at a 40% premium.

Because contributions apply to the whole of gross including bonuses and incentives, variable pay carries the full 15.5% employer charge.

There is no contribution ceiling, so overtime and bonuses attract the same rate at every level.

Andorra observes Catholic and national public holidays, including Constitution Day in March and Our Lady of Meritxell in September. Individual parishes observe additional local holidays.

Andorra observes Catholic and national public holidays, including Constitution Day in March and Our Lady of Meritxell in September. Parish holidays vary locally. Dates and any substitution rules are set out below.

The CASS provides healthcare, pensions and related benefits, funded by the 22% contribution.

Healthcare operates on co-payment. One of the principles of the Andorran system is co-responsibility, and the CASS covers between 75% and 100% of subsidised healthcare costs depending on the case rather than the full amount.

A minimum contribution history applies for retirement, and social security agreements with neighbouring states govern how benefits are paid across borders — each country pays its own outstanding benefits directly to the beneficiary.

Contributions accrue toward a retirement point system, which also underpins how penalties are calculated.

Termination follows Andorran employment law, with notice and severance set by statute and contract.

Final pay including accrued leave is due on separation and must still meet the 3rd-of-month deadline for the period in which it falls.

The employer must also process the employee’s deregistration with the CASS.

Because there is no contribution ceiling, a final settlement attracts the full 15.5% employer charge on whatever is paid.

The tax position is the main draw and the main planning point. With a €24,000 exempt minimum and a 10% ceiling, Andorran income tax sits far below Spanish or French levels.

A double taxation convention with Spain regulates how income is taxed where someone moves between the two territories, so cross-border arrangements need checking against it rather than assumed.

Every resident who works in the Principality must contribute to the CASS, though only employers and employees have direct obligations toward it.

Social security agreements also govern the position of someone drawing a pension from a neighbouring state while resident in Andorra.

Late affiliation is the most avoidable error. The employee must be affiliated during the seven days before the start date, at the latest on the day it begins — there is no window afterwards.

Penalties are denominated in retirement points, not euros. Recording false contribution data, withholding the employee 6.5% without remitting it, or deducting more than legally due each attract a fine equivalent to the sale price of between 501 and 20,000 retirement points.

The 3rd-of-month salary deadline is earlier than most. It is separate from, and earlier than, the 15th for contributions.

Note also that bonuses are fully contributory; that the minimum wage figure in circulation dates from 2024; and that healthcare is reimbursed at 75% to 100% rather than in full.

Work backwards from the start date. An EOR hire takes two to four weeks; entity formation runs two to four months.

Affiliate before the employee starts — within the seven days beforehand, at the latest on the day itself.

Confirm the current minimum wage, set the 3rd and the 15th in the payroll calendar, apply 15.5% to the whole of gross including bonuses, and withhold income tax only above €24,000 a year.