Employer of Record in Andorra

Hiring in Andorra for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Andorra in the following three ways:

• Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Andorra.
• Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Andorra’s labor laws and tax regulations.
• Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Businesses can only operate smoothly in Andorra if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Andorra below, to avoid any compliance issues.

Employment Contract Requirements

In Andorra, a contract is necessary to establish a legal employment relationship, and it must be in writing, with no specific requirements regarding its content. However, there are two key technicalities outlined in Andorra's labor law that contracts must follow:

• Be written in the official language of the country (Catalan)
• All pecuniary matters be mentioned in Euros (no foreign currrency)

Onboarding Process

We can help you get a new employee started in Andorra quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Andorra

In Andorra, the standard work schedule consists of 40 hours per week and 8 hours per day, with a mandatory thirty-minute break after every six hours of work.

Overtime in Andorra

In Andorra, employees can work overtime up to 12 hours per week, 48 hours per month, and 426 hours per year under certain conditions. If there's no policy on overtime compensation, each extra hour worked is paid at a rate of at least 125% of the regular salary.

Probation Period in Andorra

In Andorra, the duration of the probationary period varies depending on the position's nature and is determined by what is specified in the employment contract. Typically, probation periods range from three to six months.

Fiscal Year in Andorra

January1 - December 31 is the 12-month accounting period that businesses in Andorra use for financial and tax reporting purposes.

Payroll Cycle in Andorra

The payroll cycle in Andorra is usually monthly, with employees being paid last working day of the month.

Minimum Wage in Andorra

The minimum wage for employees in Andorra is typically 8.60 EUR per hour, amounting to ~1,376.27 EUR per month for a typical 40 hour work week.

Bonus Payments in Andorra

In Andorra, the 13th-month salary provision is optional, and bonuses are typically granted based on performance, solely at the employer's discretion.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 15.5% on top of the employee salary in Andorra.

Employee Payroll Tax Contributions

In Andorra , the typical estimation for employee payroll contributions cost is around 6.5%.

Individual Income Tax Contributions

Andorra operates a 'Pay As You Earn' income tax system. Individual income tax rates range from 0% to 10%, following a progressive scale for calculation.

Pension in Andorra

The retirement branch of Andorra's social security covers the situation of loss of income due to cessation of work or economic activity derived from age and is made up of the retirement pension and temporary and lifetime widowhood pensions.

Mandatory Leave Entitlement in Andorra

The annual leave entitlement in Andorra is 30 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Andorra

Employees are entitled to take off work on 14 public holidays.

Paid Time Off in Andorra

Employees in Andorra are entitled to 30 paid vacation days, adjusted based on their duration of employment before completing a year.

Maternity Leave In Andorra

Andorra's government provides paid maternity leave, covered by social security. Typically, this leave spans 16 weeks, extending to 18 weeks in cases of medical complications or multiple births.

Paternity Leave In Andorra

Fathers in Andorra can take up to 14 days of paid paternity leave within the first six months after the child's birth.

Sick Leave In Andorra

In Andorra, employees are entitled to paid sick leave under the following conditions:

• Employees must provide their employer with the initial medical certificate within 48 hours.
• Sick leave payments are provided by the social security system, CASS, and the amount varies based on the duration of the employee's absence.

Parental Leave In Andorra

Employees in Andorra have the option to take unpaid parental leave, ranging from one to four months initially. Parental leave is subject to the following details:

• This leave can be extended for equal periods, up to a maximum of two years.
• It is provided in the event of severe illness or prolonged hospitalization of a child under 18, requiring the continuous presence of one of their parents.

Termination Process in Andorra

Employee contracts can generally be terminated at will, as long as employees are notified before theyre laid off.

Notice Period in Andorra

In Andorra, the notice period varies based on contract terms, but typically, it's one day for each month of service, with a maximum limit of 90 days.

Severance in Andorra

Employees in Andorra who have worked for at least six months are entitled to severance payments as per their employment contract. Typically, employers compensate them at a rate of one and a half days' salary for each month worked, with a maximum cap of 270 days.