Payroll Taxes in Georgia: The Employer's 2026 Guide

You registered a company and made your first hire. Now you are on the hook for payroll every month, and getting it wrong means penalties and interest. The rules behind payroll taxes in Georgia are simple - one income tax, one pension scheme, one deadline - but the deadline is unforgiving and small errors compound. This guide walks the full employer workflow and shows the exact gross-to-net math.

Quick Summary:

• Employers withhold a flat 20% personal income tax from salaries and pay it to the Revenue Service.

• Mandatory funded pension: 2% employee + 2% employer + up to 2% state for enrolled workers.

• The state adds 2% on annual salary under 24,000 GEL, 1% from 24,000 to 60,000 GEL, and nothing above 60,000 GEL.

• File the monthly declaration and pay by the 15th of the following month on rs.ge.

• Pension enrollment is mandatory for citizens and permanent residents; foreign staff without a Georgian permanent residence permit are outside it.

• Non-resident foreign employees pay 20% on Georgian-source salary only.

• This is Georgia in the South Caucasus, not the US state - none of these numbers relate to US payroll.

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Payroll taxes in Georgia at a glance

Georgia runs one of the simpler payroll systems you will find anywhere. As an employer you deal with a single counterparty - the Revenue Service, through its online portal at rs.ge - and you owe two things each month: income tax withheld from your staff, and pension contributions.

The income tax is a flat 20% on salaries, withheld at source. There is no progressive bracket, no separate employer social tax, and no payroll levy on top beyond the pension. The pension scheme adds 2% from the employee, a 2% match from you, and up to 2% from the state. Both run on a monthly cadence with a single filing deadline: the 15th of the following month.

That is the whole shape of it. One flat tax, one pension scheme, one filing. The flat 20% rate on personal income is set in the Georgian Tax Code and administered by the Revenue Service, and the pension contributions are governed by their own statute (more on that below).

One quick disambiguation, because search engines blur the two: this is the country of Georgia in the South Caucasus, not the US state. The numbers below have nothing to do with US state payroll. For the bigger picture beyond payroll, see our overview of the tax system in Georgia.

The 20% personal income tax (withheld at source)

Salaries in Georgia are taxed at a flat 20%. The rate does not change with income level - the same 20% applies whether you pay someone 1,000 GEL or 10,000 GEL a month.

The key mechanic for you as an employer: you are the tax agent. That means you withhold the 20% from each employee's gross salary and remit it to the Revenue Service yourself. The employee never touches that money; it comes out before they are paid, and the figure on their contract as "gross" is what the tax is calculated from.

There is no separate employer-side social security contribution in Georgia. Beyond the pension match covered below, there is nothing else stacked on top of salaries - no unemployment tax, no health levy, no payroll surtax.

One point that trips up new founders: this 20% is for employment income specifically. Do not confuse it with the 1% small business tax, which is a turnover tax for Individual Entrepreneurs, or with the rules that apply to dividends. Those are separate regimes with separate rates. If you are paying a salary to an employee, it is 20%, full stop. For how this interacts with people working remotely, see our notes on remote worker tax rules.

Funded pension contributions: 2% + 2% + up to 2%

Since 1 January 2019, Georgia has run a mandatory funded pension scheme on top of income tax. For every enrolled employee, money flows into a personal pension account from three directions.

• Employee: 2% of gross salary, withheld by you alongside the income tax.

• Employer: 2% of the same gross salary, paid by you on top of the salary - this is a real additional cost to the company, not a deduction from the employee.

• State: up to 2%, contributed directly by the government and tiered by salary (see below).

So an enrolled employee always has at least 4% of their salary (2% + 2%) going into their pension, plus whatever the state adds. The employer 2% is the line founders most often forget when budgeting, because it is the only one that is neither withheld from the employee nor paid by the state - it comes straight out of the company.

How the state's contribution is tiered

The state does not always add a flat 2%. Its contribution steps down as salary rises:

• 2% if the employee's gross annual salary is below 24,000 GEL.

• 1% if the annual salary is between 24,000 and 60,000 GEL.

• 0% above 60,000 GEL - high earners get no state top-up.

The employee 2% and employer 2% are each calculated on gross salary and do not change with these tiers; only the state's share moves. These rates and thresholds are set out in the Law of Georgia on Funded Pension.

Who must be enrolled (and who's exempt)

Enrollment is mandatory for Georgian citizens, foreign citizens who hold a Georgian permanent residence permit, and stateless persons with permanent residence in Georgia. If a worker falls into one of those groups, you must run the pension lines for them.

There is one age-based opt-out. People who were already 60 or older (men) or 55 or older (women) when the scheme launched in 2019 were allowed to decline enrollment.

The part that matters most for international teams: foreign employees without a Georgian permanent residence permit are outside mandatory enrollment. For them, there is no employee or employer pension line at all - you only withhold the 20% income tax. We cover the full mechanics in the foreign-employees section below. Our guide to Georgian tax residency explains how residency status is determined.

Worked example: gross to net for one employee

Rates in isolation are easy. Watching them run through a real salary is where it clicks. Here is a single employee on 3,000 GEL per month gross - that is 36,000 GEL a year, which lands in the middle state tier, so the state adds 1%.

Read it from the employee's side first: of their 3,000 GEL gross, 600 goes to income tax and 60 to their pension, leaving 2,340 GEL in their account. From your side as the company, the salary actually costs 3,060 GEL - the gross plus your 2% pension match. The income tax is computed on the full gross; the employee's 2% pension does not shrink the taxable base.

The pension account itself receives 150 GEL that month from all three sources combined. Of that, 30 GEL is the state's free top-up - retirement savings that lands in the account without costing either you or the employee a cent. Budget every hire at gross plus 2%, and the math never surprises you.

How to run payroll in Georgia, step by step

Here is the actual monthly workflow, start to finish, assuming you are doing this for the first time.

Register your company and employees with the Revenue Service

Your company needs to be registered and hold a tax identification number before you can run any payroll. If you have not set the entity up yet, our register an LLC service covers it, and our guide to business structures helps you pick the right form.

Employees themselves are reported through the monthly declaration on rs.ge - that filing is where each staff member and their pay are recorded. You operate all of this from your company's rs.ge account, so make sure you have login access set up before your first payday.

Calculate withholding and the pension each month

For each employee, apply the 20% income tax and the 2% employee pension to their gross salary, and track your own 2% employer match separately. Keep a running figure for the total you owe the budget versus the total going into pension accounts. The worked table above is your template - run every salary through the same lines and the monthly totals fall out cleanly.

File the monthly declaration on rs.ge

Submit the monthly withholding declaration electronically through rs.ge for the prior month's salaries. This is the return that reports what you paid your staff and what you withheld. The declaration is due by the 15th of the month following the salary payment, and it is filed entirely online through the Revenue Service portal - there is no paper option.

Pay the tax and pension by the 15th

Remit the withheld income tax and the pension contributions by the 15th of the following month. Filing the declaration and paying the money are two separate actions - do not assume submitting the return moves the funds.

Miss the 15th and penalties plus interest start accruing immediately, so treat it as a hard deadline. You can pay through the treasury system; our guide to paying taxes via the treasury walks through the mechanics.

Hiring foreign employees: how payroll differs

Foreign staff are where most payroll mistakes happen, so here is the precise treatment.

On income tax, a non-resident employee is taxed at the same flat 20%, but only on Georgian-source employment income - salary earned for work tied to Georgia. You still act as tax agent: you withhold the 20% and remit it exactly as you would for a local hire. The withholding itself does not change based on residency.

On pension, the rule is clean: foreign citizens without a Georgian permanent residence permit are outside mandatory enrollment. For those employees you run no pension lines at all - no employee 2%, no employer 2%. The pension contributions only appear if the foreign hire actually holds permanent residence in Georgia.

It is worth knowing that spending 183 days in Georgia within any rolling 12-month period makes someone a Georgian tax resident. That status matters for their overall tax position - especially worldwide income questions - but it does not change how you withhold on their Georgian salary. Work authorization runs alongside all of this; if your hire needs a residence permit, that is a separate process from tax. For Americans on your team, our guide to moving to Georgia from the USA covers the cross-border angles.

Founders, directors, and the 1% regime

Most of our readers are not big companies - they are solo founders and small teams - so two questions come up constantly.

First, directors. If you are a company director and you pay yourself a salary, you are an employee for payroll purposes. The same 20% income tax and the same pension rules apply to your own salary as to anyone else's. Putting yourself on payroll means running yourself through the exact workflow above.

Second, the 1% regime. Plenty of readers run an Individual Entrepreneur on the 1% turnover tax, and they conflate it with payroll. They are completely separate. The 1% is a tax on your business turnover, not on salaries; if your IE has no employees, there is simply no salary withholding to run. Our guide on how to get the 1% tax explains that regime, and our register an IE service sets it up.

One more distinction: dividends you take as an owner are taxed separately from salary. Do not count the same money twice by treating a dividend as if it ran through payroll.

Common payroll mistakes (and how to avoid them)

The errors below are the ones that actually cost our clients money or trigger Revenue Service attention. Each has a simple fix.

• Missing the 15th. Penalties and interest start the moment you are late. Fix: set a hard recurring monthly reminder a few days before the deadline.

• Forgetting the employer 2% pension match. Founders budget the gross and get blindsided by the match. Fix: price every hire at gross salary plus 2%.

• Not enrolling an eligible employee. Skipping pension for a citizen or permanent resident is non-compliant. Fix: check each person's status before their first payroll.

• Getting a foreign hire's pension wrong. Adding pension for someone without permanent residence, or omitting it for someone who has it. Fix: confirm permanent residence status first.

• Mixing up the 1% IE regime with employee payroll. They are different taxes with different mechanics. Fix: keep turnover tax and salary withholding mentally separate.

If running this every month is not how you want to spend the 15th, we handle monthly payroll and filings for foreign-owned companies through our accounting service - we file the declaration on time so you never have to watch the deadline.

Key Takeaways

• Budget every hire at gross salary plus the 2% employer pension match, so headcount costs never surprise you.

• Put a hard recurring reminder on the 15th for both filing and payment - they are separate actions.

• Confirm each employee's residency and citizenship status before their first payroll to get pension enrollment right.

• For foreign hires, check whether they hold a Georgian permanent residence permit before adding any pension line.

• Keep your rs.ge access and company tax ID ready before payday, not on the day itself.

• If payroll is not your job, hand the monthly declaration to an accountant and take the deadline risk off your plate.

FAQ

What payroll taxes do employers pay in Georgia?

Employers withhold a flat 20% personal income tax from each salary and remit it to the Revenue Service. On top of that, for enrolled employees you pay a 2% employer pension match and withhold a 2% employee pension contribution. The state adds up to a further 2% directly. There is no separate employer social security beyond the pension.

What is the income tax rate on salaries in Georgia?

Salaries are taxed at a flat 20%, withheld at source by the employer. The rate is the same regardless of income level - there are no progressive brackets. As the employer, you are the tax agent responsible for withholding it from gross pay and remitting it.

How much is the pension contribution in Georgia?

The mandatory funded pension is 2% from the employee plus 2% from the employer, both calculated on gross salary. The state adds up to 2% more, depending on the employee's annual salary. That means at least 4% of an enrolled employee's salary goes into their pension account every month.

When are payroll taxes due in Georgia?

The monthly declaration must be filed and the tax paid by the 15th of the month following the salary payment. Both the income tax withholding and the pension contributions are due on this date. Filing happens electronically through the rs.ge portal. Missing the deadline triggers penalties and interest.

Do foreign employees pay payroll tax in Georgia?

Yes. A foreign employee pays the flat 20% income tax on Georgian-source salary, and the employer withholds and remits it as usual. Pension contributions only apply if the foreign employee holds a Georgian permanent residence permit. Without permanent residence, there are no pension lines - just the 20% income tax.

Are foreigners required to join the Georgian pension scheme?

Only foreign citizens who hold a Georgian permanent residence permit are required to join the mandatory funded pension scheme. Foreign citizens without permanent residence are excluded from mandatory enrollment. Stateless persons with permanent residence in Georgia are also required to participate.

How do I calculate net salary in Georgia?

Take the gross salary, subtract the 20% income tax, then subtract the 2% employee pension contribution - what remains is the net take-home. For a 3,000 GEL gross salary, that is 3,000 minus 600 (tax) minus 60 (pension) = 2,340 GEL net. The employer's 2% match is an additional company cost on top, not a deduction from the employee.

Where do employers file payroll in Georgia?

Employers file through the Revenue Service electronic portal at rs.ge. The monthly withholding declaration is submitted online there, and the tax and pension are paid by the 15th of the following month. There is no paper filing - everything runs through your company's rs.ge account.

Does the 1% small business tax replace payroll tax?

No. The 1% small business tax is a turnover tax for Individual Entrepreneurs, charged on business revenue rather than salaries. Payroll taxes apply separately, whenever you pay a salary to an employee. If your IE has no employees, there is no payroll to run, but the two regimes never substitute for each other.

What happens if I file or pay payroll late in Georgia?

Penalties and interest begin accruing as soon as you miss the 15th deadline. The fix is to file the declaration and pay immediately to stop further interest, and to contact the Revenue Service if you need to resolve a larger shortfall. A recurring monthly reminder is the simplest way to avoid it entirely.

Is there employer social security in Georgia beyond the pension?

No. Beyond the 2% funded-pension match, there is no separate employer social security, unemployment tax, or payroll levy in Georgia. The employer's total obligations are the withheld 20% income tax, the withheld 2% employee pension, and the 2% employer pension match for enrolled staff.