Employer of Record in Armenia

Businesses can only operate smoothly in Armenia 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 Armenia below, to avoid any compliance issues.

Employment Contract Requirements

Armenia has comprehensive labour laws that typically favour employees. A written employment contract in the local language is a legal requirement. A customary document should include:

• Identification of both parties
• Commencement date
• Job responsibilities and duties
• Employee's compensation and other benefits

Onboarding Process

We can help you get a new employee started in Armenia 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 Armenia

As per the Republic of Armenia's labor code, employees are typically permitted to work 8 hours a day for 5 days, constituting a total of 40 hours per week as regular working hours.

Overtime in Armenia

In Armenia, overtime is paid at 150% of the standard hourly rate, while night work is compensated at 130%. The maximum daily working time, including overtime, is 12 hours (48 hours per week), with breaks included. Overtime pay cannot be included in the regular salary, and managers are exempt from overtime restrictions without extra pay.

Probation Period in Armenia

In Armenia, the probation period is typically optional and should not surpass three months if outlined in the contract, unless specified otherwise by labor laws, which may allow for probation periods of up to six months in certain cases.

Fiscal Year in Armenia

January 1st - December 31st is the 12-month accounting period that businesses in Armenia use for financial and tax reporting purposes.

Payroll Cycle in Armenia

The payroll cycle in Armenia is usually monthly, with employees being paid 15th day of the following month.

Minimum Wage in Armenia

The minimum wage for employees in Armenia is typically 500 AMD per hour, amounting to ~75,000 AMD per month for a typical 40 hour work week.

Bonus Payments in Armenia

There is no mandatory requirement for employers to provide a 13th-month salary.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 0% on top of the employee salary in Armenia.

Employee Payroll Tax Contributions

In Armenia , the typical estimation for employee payroll contributions cost is around 5% -10%%.

Individual Income Tax Contributions

Armenia applies a flat tax rate of 20% for personal income tax.

Pension in Armenia

Armenia's pension system, managed by the State Social Security Service, provides retirement benefits based on contributions. Retirement age is 63 for men and 60 for women, with various pension types available. Reforms aim to ensure system sustainability and efficacy.

Mandatory Leave Entitlement in Armenia

The annual leave entitlement in Armenia is 20 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 Armenia

Armenia observes 12 national holidays in a year.

Paid Time Off in Armenia

In Armenia, the minimum paid annual leave days depend on the working week and are granted after 6 months of service:

• For a five-day workweek, employees receive 20 days, up to 35 days for high-risk conditions
• For a six-day workweek, employees receive 24 days, up to 42 days for high-risk conditions

Maternity Leave In Armenia

In Armenia, an employee is entitled to paid maternity leave according to the following:

• Normal pregnancy: 140 days (70 days pregnancy leave, 70 days maternity leave)
• Complicated delivery: 155 days (70 days pregnancy leave, 85 days maternity leave)
• Multiple births: 180 days (70 days pregnancy leave, 110 days maternity leave)

Paternity Leave In Armenia

Fathers have the options of unpaid leave for 2 months, during the pre- or post-natal period, or 5 days of paid leave, within a month of the birth.

Sick Leave In Armenia

The following details are relevant to sick leave in Armenia:

• Employees receive 80% of their average salary as paid sick leave from day one to day five, covered by the employer.
• From day six, sick pay is covered by social insurance.
• If absence lasts fewer than 120 consecutive days or 140 days within a year, full benefits are retained.
• Social Insurance handles sick leave for work-related injuries or illnesses, and employees return when fit for work.

Parental Leave In Armenia

Employees are entitled to unpaid leave of up to 3 years to care for their child, following the birth.

Bereavement Leave

Employers must grant employees three days of unpaid leave in the case of the death of a close family member

Marriage Leave

Employers are required to offer employees three days of unpaid leave in the case of their own marriage.

Termination Process in Armenia

In Armenia, termination of employees must adhere to specific reasons outlined in labor laws, requiring written justification from the employer. Acceptable reasons may include:

• Loss of confidence in the employee's performance.
• Unexcused absence from work.
• Failure to cooperate with a required medical exam.

Notice Period in Armenia

In Armenia, notice periods vary based on employee tenure and circumstances:

• Probationary employees: Require a 3-day notice.
• Mutual agreement: Requires a 7-day notice.
• Changes in employment terms: Require a notice period of 14-60 days, depending on tenure.
• Staff reduction: Requires a 2-month notice.

Severance in Armenia

In Armenia, severance pay varies depending on the reason for termination. For company-related terminations such as liquidation or reduced workforce, employees receive severance equal to the average monthly salary.Employee-related terminations for reasons such as disability or old age follow a scale based on length of service:

• Less than 12 months: 10x average daily salary.
• 1-5 years: 25x average daily salary.
• 5-10 years: 30x average daily salary.
• 10-15 years: 35x average daily salary.
• Over 15 years: 44x average daily salary.