Hire Employees in Armenia

Two routes exist. Registering an Armenian company is quick by regional standards — one to two months — and the compliance burden afterwards is comparatively light, since there is no employer social contribution to administer.

An Employer of Record removes even that lead time. The EOR is the legal employer in Armenia, runs payroll, withholds income tax, pension and stamp duty, files monthly with the State Revenue Committee and carries the employment liability, while day-to-day direction stays with you.

Engaging someone as a contractor is a third option, but only where the work is genuinely independent. Payments to non-residents for Armenian-source services attract 20% withholding tax in their own right — see the risk check further down this page.

Armenia changes the usual EOR-versus-entity arithmetic. In most markets an entity looks attractive once employer contributions become a large fixed cost worth administering in-house. Here there are no employer contributions at all, so the entity saves less — which pushes the break-even higher, nearer 20 to 25 employees than the 15 to 20 typical elsewhere.

The High Technology Park is worth checking before choosing a model. Certified technology companies can access 0% corporate income tax, and reduced 10% income tax applies to qualifying certified R&D salaries under incentives running to 2031. Those reliefs attach to a registered entity, not to an EOR arrangement.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Armenian company somewhere between 20 and 25 employees — later than in most markets, because there are no employer contributions for an entity to save on. Model both before committing — see EOR vs Entity for the full comparison.

Armenia is the only market in this dataset with no employer social contributions at all. A private-sector employer pays the gross salary and nothing on top. Social insurance benefits — healthcare, maternity, unemployment — are financed from general taxation rather than from a separate payroll charge.

Everything else is employee-side, with the employer acting as withholding agent. Income tax is a flat 20% at every salary level. Funded pension contributions are 5% of gross up to AMD 500,000 a month, then 10% of gross minus AMD 25,000, capped at AMD 87,500 a month on a contribution base of AMD 1,125,000. The military stamp duty is a fixed monthly amount by band.

Pension liability turns on the employee’s date of birth. Only those born on or after 1 January 1974 contribute. An older employee on an identical salary therefore has a different net pay and a different payroll configuration — a person-dependent rule that cannot be derived from the contract.

Two changes are recent and easily missed. The military stamp duty was simplified in December 2025 from four bands to two: AMD 1,000 where gross is AMD 1,000,000 or less, and AMD 15,000 above. Several current guides still quote the old four-tier range starting at AMD 1,500. And a universal mandatory health insurance contribution took effect on 1 January 2026, adding a further payroll deduction.

Gross monthly salaries for full-time roles in Yerevan. With no employer contributions, gross is very close to total employment cost.

Benchmarks below are gross monthly salaries in Armenian dram for full-time roles in Yerevan. Because there are no employer contributions, gross salary is very close to total employment cost.

Payroll is monthly, normally paid by bank transfer in Armenian dram. All withholdings are filed and paid to the State Revenue Committee through its e-portal by the 20th of the following month. Late payment accrues interest at 0.075% a day, which compounds quickly.

Income tax is a flat 20% on all employment income, with no brackets and no personal allowance. Residents and non-residents pay the same rate on Armenian-source employment income.

Funded pension is withheld only for employees born on or after 1 January 1974. The military stamp duty and, from January 2026, the mandatory health insurance contribution are withheld from all employees.

Payslips must show gross pay, each withholding and net pay. Payroll records must be kept for five years. There is no statutory 13th month in Armenia.

Armenia applies a single flat rate rather than progressive bands. Reduced rates apply to certain income types and to qualifying certified R&D salaries under the technology incentives running to 2031.

The Labour Code of the Republic of Armenia is the governing statute. Employment must be formalised either by a written individual employment contract or by an individual legal act of hiring.

The standard working week is 40 hours. Overtime is restricted and paid at a premium, and total working time including overtime may not exceed statutory daily and weekly limits.

Annual leave is 20 working days on a five-day week or 24 on a six-day week, rising to 35 and 42 days respectively for work in stressful or high-risk conditions. Leave may generally be taken after six months of continuous service, and the leave year runs from the individual start date rather than the calendar.

A written contract or an individual legal act of hiring is mandatory before work begins. It must record the role, pay, working time and duration.

Probation may be agreed and is commonly up to three months. It must be stated in the contract; it cannot be imposed afterwards.

Fixed-term contracts are permitted where the nature of the work justifies them. Where a fixed term is used for continuing work, the relationship risks being treated as indefinite.

The standard week is 40 hours, normally over five days. Daily working time including overtime is capped by the Labour Code, and overtime requires justification rather than being available at will.

Overtime, night work and work on rest days and public holidays attract premium rates set by the Labour Code.

Employees are entitled to uninterrupted weekly rest and to daily rest between shifts.

Armenia observes 16 public holidays in 2026, among the most in this dataset. They are additional to annual leave. Work on a public holiday attracts premium pay.

Armenia observes 16 paid public holidays in 2026 — among the most in this dataset. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Maternity leave is 140 days for a single uncomplicated birth — 70 before and 70 after — extending for complicated or multiple births. It is paid from the state budget rather than by the employer, consistent with Armenia funding social benefits from general taxation.

Parental leave to care for a child is available until the child reaches three years of age, with job protection.

Sick pay is administered through the state system on presentation of a medical certificate.

Notice depends on the ground for termination and length of service, commonly running from 14 days to two months. Redundancy requires longer notice than most other grounds.

Severance is payable on termination at the employer’s initiative, calculated by reference to average salary and length of service under the Labour Code.

Termination must rest on a ground listed in the Labour Code. Dismissal outside those grounds, or without the required procedure, exposes the employer to reinstatement or compensation through the courts.

Final pay including accrued leave is due on the last day of employment.

Foreign nationals generally require a residence permit carrying work rights. Armenia does not operate a separate work-permit regime in the way many markets do, and the residence permit is the operative document.

Nationals of Eurasian Economic Union member states have simplified access. Processing typically runs four to eight weeks.

Technology employers should check High Technology Park certification, which carries incentives for both the company and qualifying professional hires.

The pension birth-date test is the most commonly missed rule. Only employees born on or after 1 January 1974 contribute to the funded pension. Applying it to everyone over-withholds; omitting it for an eligible employee under-withholds and creates a shortfall recoverable from the employer.

The military stamp duty changed in December 2025. The four-tier structure was replaced by two bands — AMD 1,000 and AMD 15,000. Guides still quoting AMD 1,500 to AMD 15,000 across four tiers are describing the superseded schedule.

Mandatory health insurance began on 1 January 2026 and is a separate obligation. Private medical cover already provided by the employer does not substitute for it.

Note also that late remittance accrues interest at 0.075% a day, and that an employee concluding contracts in Armenia for a foreign entity can create a taxable presence for that entity.

Work backwards from the start date. For a local hire through an EOR, one to two weeks is realistic once the signed contract and tax identification are in hand. For a foreign national requiring a residence permit, add four to eight weeks.

Confirm three things before making an offer: the employee’s date of birth, which determines whether funded pension contributions apply; whether the role qualifies for reduced-rate income tax under the technology incentives; and that the contract or individual legal act of hiring is executed before work begins.

Register with the State Revenue Committee and confirm e-portal filing access before the first payroll runs, since the monthly deadline of the 20th is enforced with daily interest.