Professional Payroll Services in Georgia

Monthly Payroll Processing, Employment Contracts, Leave Management & RS.ge Tax Compliance

Managing payroll in Georgia requires precision, compliance expertise, and an understanding of constantly evolving tax regulations. From calculating correct income tax withholdings to managing pension contributions and filing monthly declarations with the Revenue Service, payroll administration can be time-consuming and complex for business owners.

Our comprehensive payroll services in Georgia handle every aspect of employee compensation and compliance, ensuring your team is paid accurately and on time while you remain fully compliant with Georgian labor and tax law.

 

Why Professional Payroll Services Matter

Payroll isn't just about paying employees—it's about legal compliance, accurate tax calculations, proper documentation, and maintaining good relationships with both your team and the Revenue Service.

Compliance Protection: Georgian tax law imposes significant penalties for late or incorrect payroll tax filings. Professional payroll management protects you from costly mistakes and ensures all RS.ge declarations are submitted correctly and on time.

Time Savings: Processing payroll manually takes hours each month. Between calculating withholdings, preparing payslips, filing declarations, and managing leave balances, payroll can consume valuable time better spent growing your business.

Accuracy Guarantee: Payroll errors create problems with employees and tax authorities. Professional services eliminate calculation mistakes and ensure everyone receives the correct net salary.

Employee Confidence: When employees receive accurate, timely payments with clear payslips showing all deductions, it builds trust and demonstrates your company's professionalism.

Regulatory Updates: Georgian employment and tax regulations change periodically. Professional payroll services stay current with all updates, ensuring your business remains compliant without you needing to monitor legislative changes constantly.

Our Comprehensive Payroll Services

We provide end-to-end payroll management for businesses operating in Georgia, from startups with a handful of employees to established companies with dozens of staff members.

Monthly Payroll Processing

Our monthly payroll service handles everything from gross salary calculations to net pay distribution, ensuring accuracy and timeliness every pay period.

What We Do Each Month:

Gross Salary Calculation: We calculate each employee's gross salary based on their employment contract, accounting for regular salary, overtime hours, bonuses, commissions, and any other compensation components.

Income Tax Withholding (20%): Georgian law requires employers to withhold 20% income tax from all employee salaries. We calculate this withholding accurately for each employee, considering their gross compensation.

Pension Contribution Calculation: For Georgian citizens and permanent residents, employers must handle pension contributions totaling 4% of gross salary—2% withheld from the employee's salary and an additional 2% paid by the employer. We calculate both portions correctly and ensure proper allocation.

Net Salary Determination: After deducting 20% income tax and the employee's 2% pension contribution, we calculate the exact net salary each employee receives.

Payslip Generation: We create detailed, professional payslips for each employee showing gross salary, all deductions (income tax, pension contribution), employer contributions, and final net pay. Payslips are provided in both Georgian and English when needed.

Payment Processing Support: We provide detailed payment instructions showing exactly how much to transfer to each employee and how much to remit to the Revenue Service for taxes and pension contributions.

Employment Contracts & Documentation

Proper employment documentation is essential for legal compliance and protecting both employers and employees. We assist with all employment contract requirements.

Employment Contract Preparation: We draft comprehensive employment contracts in Georgian (and English translation if needed) that comply with Georgian labor law, including:

• Position title and job description
• Salary and compensation structure
• Working hours and schedule
• Probation period (if applicable)
• Leave entitlements
• Notice periods for termination
• Other terms specific to your business needs

Contract Registration: Georgian law requires certain employment contracts to be registered. We handle this process and ensure compliance with notification requirements.

Contract Amendments: When salaries change, positions are modified, or working conditions evolve, we prepare proper contract amendments and ensure they're documented correctly.

Termination Documentation: When employment relationships end, proper documentation is crucial. We prepare termination letters, final settlement calculations, and ensure all legal requirements are met.

Foreign Employee Documentation: For non-resident employees, we assist with understanding withholding tax obligations and double taxation treaty implications.

Leave Management & Tracking

Georgian labor law provides specific leave entitlements that must be tracked and managed properly.

Annual Leave Management: After 11 months of service, employees are entitled to 24 days of paid annual leave. We track accrual, usage, and remaining balances for each employee, ensuring accurate calculations.

Sick Leave Tracking: We maintain records of sick leave taken by employees, distinguishing between paid and unpaid sick days according to Georgian law.

Maternity/Paternity Leave: Female employees are entitled to pregnancy leave with specific benefits. We calculate maternity benefits correctly and track leave periods.

Unpaid Leave Administration: Employees are entitled to 15 unpaid days annually. We track usage and calculate salary impacts when unpaid leave is taken.

Leave Balance Reporting: Employees and management receive regular updates on leave balances, ensuring transparency and proper planning.

Leave Payment Calculations: When employees take annual leave or receive vacation pay, we calculate the correct compensation amounts based on Georgian labor law requirements.

RS.ge Tax Filings & Compliance

The Revenue Service of Georgia (RS.ge) requires monthly declarations for employee income tax and pension contributions. We handle all filing requirements, ensuring perfect compliance.

Monthly Income Tax Declarations: By the 15th of each month, we file declarations reporting all employee salaries paid in the previous month, including the 20% income tax withheld.

Pension Contribution Reporting: We report both employee (2%) and employer (2%) pension contributions for all eligible employees through the RS.ge portal.

Annual Reconciliation: At year-end, we prepare annual employment income reports reconciling all monthly filings and employee compensation.

Tax Payment Coordination: We calculate exact amounts due to the Revenue Service for income tax withholding and pension contributions, providing payment instructions with precise amounts and payment codes.

Deadline Management: We never miss filing deadlines. Our system tracks all upcoming obligations and ensures submissions happen on time, every time.

Audit Support: If the Revenue Service requests documentation or conducts a payroll audit, we provide all necessary records and support throughout the process.

Understanding Georgian Payroll Taxes

Georgia's payroll tax system is straightforward compared to many countries, but accuracy is essential.

Income Tax (20% Flat Rate)

All employment income in Georgia is subject to a flat 20% income tax rate, regardless of salary amount. This applies to:

• Regular monthly salary
• Bonuses and commissions
• Overtime pay
• Benefits-in-kind (company cars, housing, etc.)
• Any other compensation received through employment

Employer Responsibility: Employers act as tax agents, withholding the 20% before paying employees and remitting it to the Revenue Service.

Example Calculation:

Employee Gross Salary: 3,000 GEL
Income Tax (20%): 600 GEL
Employee Pension (2%): 60 GEL
Net Salary Paid: 2,340 GEL

Pension Contributions (4% Total)

Georgia's pension system requires contributions from both employees and employers:

Employee Contribution: 2% of gross salary, withheld by the employer
Employer Contribution: Additional 2% of gross salary, paid by the employer
Government Contribution: The state adds additional amounts based on salary levels

Who Must Participate:

• Georgian citizens employed in Georgia
• Permanent residents of Georgia
• Both employee and employer contributions are mandatory

Who Is Exempt:

• Non-resident foreign employees (no pension contributions required)
• Employees who were already aged 60 (men) or 55 (women) before August 2018

Example Calculation:

Employee Gross Salary: 3,000 GEL
Employee Pension (2%): 60 GEL (withheld from salary)
Employer Pension (2%): 60 GEL (additional employer cost)
Total Pension Contribution: 120 GEL

Total Employment Cost

When budgeting for employees, remember that the total cost includes both salary and employer pension contributions:

Example Total Cost:

Gross Salary: 3,000 GEL
Employer Pension (2%): 60 GEL
Total Monthly Cost: 3,060 GEL

Employee Receives (Net): 2,340 GEL
Government Receives (Tax): 600 GEL
Pension System Receives: 120 GEL (60 employee + 60 employer)

Special Considerations for Different Employee Types

Georgian Residents vs. Non-Residents

Georgian Tax Residents (183+ days in Georgia):

• 20% income tax on Georgian-source income
• 4% total pension contributions (2% employee + 2% employer)
• Full participation in social benefits

Non-Residents:

• 20% income tax withheld (unless double taxation treaty reduces this to 0%)
• NO pension contributions required
• Different annual reporting requirements

Foreign Employees & Double Taxation Treaties

Georgia has double taxation avoidance treaties with over 55 countries. If your employee is a tax resident of a treaty country, withholding tax may be reduced to 0% rather than 20%.

Common DTA Countries: EU nations, UK, USA, China, UAE, and many others.

Documentation Required: Foreign employees claiming DTA benefits must provide:

• Tax residency certificate from their home country
• Completed forms as required by Georgian Revenue Service
• Annual renewal of documentation

We help navigate DTA requirements and ensure proper documentation for reduced withholding rates.

Individual Entrepreneurs as Service Providers

Sometimes businesses engage individual entrepreneurs (IEs) instead of hiring employees. The tax treatment differs significantly:

Employee Relationship:

• 20% income tax withheld by employer
• 4% pension contributions
• Full labor law protections
• Monthly tax declarations by employer

Individual Entrepreneur (Service Provider):

• IE declares and pays own taxes (1% Small Business or 20% standard IE rate)
• No pension contributions
• No labor law protections
• Service agreement, not employment contract

Important: The Revenue Service may reclassify IE relationships as employment if they resemble employment (single client, fixed hours, subordination, etc.), resulting in back taxes and penalties. We can advise on proper structuring.

Payroll Compliance Calendar

Staying compliant means meeting all deadlines consistently. Here's what we manage each month:

By 15th of Each Month:

• File monthly income tax declaration for previous month's salaries
• File pension contribution reports
• Remit tax payments to Revenue Service
• Transfer pension contributions

Throughout the Month:

• Process monthly payroll
• Generate and distribute payslips
• Update leave balances
• Maintain employee records

Annually:

• File annual employment income reconciliation
• Prepare employee tax certificates
• Update employment contracts as needed
• Review and adjust payroll processes for any regulatory changes

Our Payroll Service Process

We've developed a streamlined process that ensures accuracy and efficiency every month.

Step 1: Initial Setup

Employee Data Collection: We gather all employee information including personal details, bank accounts, contract terms, salary amounts, and start dates.

RS.ge Registration Verification: We confirm your business is properly registered as an employer with the Revenue Service and has the necessary accounts for tax withholding and pension contributions.

Contract Review: We review existing employment contracts to ensure compliance and recommend any necessary updates.

Leave Balance Setup: We establish current leave balances for all employees based on their tenure and usage history.

Payroll Schedule Agreement: We confirm your pay frequency (monthly is standard in Georgia), pay dates, and payslip delivery preferences.

Step 2: Monthly Payroll Cycle

Data Collection (5th-10th of month): We collect information on hours worked, bonuses, leave taken, new hires, terminations, or salary changes.

Payroll Calculation (10th-12th): Our team processes all calculations including gross pay, tax withholdings, pension contributions, and net salaries.

Review & Approval (12th-14th): You review payroll summary and approve final amounts before processing.

Payslip Delivery (14th-15th): Employees receive detailed payslips electronically or in print.

Payment Processing (15th): Employees are paid on your designated payday.

Tax Filing & Payment (by 15th of next month): We file all required RS.ge declarations and provide exact payment amounts for tax remittance.

Step 3: Ongoing Support

Employee Inquiries: We answer employee questions about payslips, deductions, leave balances, and tax documentation.

Contract Management: We handle contract amendments, renewals, and terminations as your team evolves.

Compliance Monitoring: We track regulatory changes and update processes to maintain compliance.

Reporting: You receive monthly payroll summaries showing total costs, tax obligations, and employee expenses.

Additional Services We Provide

Payroll Tax Optimization

While Georgian payroll taxes are straightforward, we can advise on legal structuring to optimize your employment costs:

• Proper classification of employees vs. contractors
• Use of equity compensation and benefits
• International company status benefits (5% payroll tax for qualifying businesses)
• Structuring for employees with multiple income sources

Year-End Processes

Tax Certificates: We prepare employment income certificates for employees who need them for personal tax filings or other purposes.

Annual Reconciliation: Complete reconciliation of all payroll activity, tax payments, and employee compensation for the year.

Audit Preparation: If selected for audit, we compile all required documentation and support your business through the process.

New Hire & Termination Services

Onboarding: Complete new hire processing including contract preparation, RS.ge registration, payroll setup, and first payslip generation.

Offboarding: Final settlement calculations, termination documentation, tax certificate preparation, and final RS.ge reporting.

Common Payroll Questions

How quickly can you start managing our payroll?

For most businesses, we can take over payroll management within 2-3 weeks. This includes reviewing existing documentation, setting up systems, and verifying all employee data before the first payroll run.

What do you need from us each month?

Just a simple report of any changes: hours worked (if hourly employees), bonuses to pay, leave taken, new hires, or terminations. We handle everything else.

Can you manage payroll for businesses with foreign employees?

Yes. We regularly handle payroll for companies employing both Georgian and foreign nationals, managing the different tax treatment and documentation requirements for each.

What if we have employees working remotely from outside Georgia?

Remote work creates complex tax questions. We can advise on whether these employees create Georgian tax obligations and help structure arrangements properly.

Do you handle payroll for individual entrepreneurs?

Individual entrepreneurs manage their own taxes, not payroll. However, if they have employees, we can manage payroll for those employees.

What happens if we miss a payroll deadline?

We never miss deadlines. Our systems include multiple checks and early processing to ensure timely filing. If hypothetically a deadline were missed, penalties would apply, which is why our reliability matters.

Can employees access their payslips online?

Yes. We can provide secure online access where employees view and download their payslips, tax documentation, and leave balances anytime.

Why Choose Our Payroll Services?

Georgian Expertise: Our team specializes in Georgian payroll law, tax regulations, and RS.ge compliance requirements. We stay current with all regulatory changes.

Accuracy Guarantee: We maintain 100% accuracy in our payroll calculations and filings. If we make an error, we correct it immediately at no cost to you.

Timely Service: Payslips are delivered on schedule, tax filings happen before deadlines, and employees are always paid on time.

Transparent Pricing: Clear, predictable monthly fees based on employee count. No hidden charges or surprise fees.

Dedicated Support: You have a dedicated payroll specialist who knows your business and is available to answer questions promptly.

Technology-Enabled: We use modern payroll software that provides efficiency, security, and easy access to payroll information.

Scalable Solution: Whether you have 2 employees or 200, our services scale with your business growth without disruption.

Common Payroll Mistakes We Help You Avoid

Incorrect Pension Contribution Calculations: Many businesses miscalculate the 4% total pension (confusing employee and employer portions) or apply it to non-resident employees who are exempt.

Missing Filing Deadlines: Late RS.ge declarations trigger automatic penalties. We ensure every filing happens on time.

Improper Contract Documentation: Missing or incomplete employment contracts create legal risks. We ensure proper documentation for all employees.

Incorrect DTA Application: Businesses sometimes fail to properly apply double taxation treaty benefits for foreign employees, resulting in overpayment of taxes.

Leave Balance Errors: Incorrect tracking of annual leave leads to disputes with employees and potential labor law violations.

Misclassification of Workers: Treating employees as independent contractors (or vice versa) creates significant tax and legal problems.

Incomplete Payslip Information: Payslips must show all required information. Incomplete documentation causes employee confusion and compliance issues.

Integration with Your Business

Our payroll services integrate seamlessly with your other business operations:

Accounting Integration: Payroll data flows directly into your bookkeeping, ensuring accurate expense recording and financial reporting.

Bank Coordination: We provide exact payment amounts and instructions for salary transfers and tax payments.

HR Systems: If you use HR software, we can integrate payroll data to maintain unified employee records.

Time Tracking: We can work with your time tracking systems to ensure accurate payment for hourly employees.

Getting Started

Upgrading to professional payroll services is straightforward and can usually happen within your next payroll cycle.

Step 1: Free Consultation: Contact us to discuss your payroll needs, employee count, and any special requirements.

Step 2: Custom Proposal: We provide a detailed proposal outlining services, timeline, and transparent pricing.

Step 3: Setup Process: Once engaged, we collect employee information, review documentation, and set up systems.

Step 4: First Payroll Run: We process your first payroll with extra review to ensure everything is perfect.

Step 5: Ongoing Management: After successful first payroll, we continue managing everything month after month.

Pricing

Our payroll services are priced based on the number of employees and complexity of your needs:

Standard Payroll Package: Includes monthly payroll processing, payslip generation, RS.ge tax filings, pension reporting, and basic leave tracking. Pricing starts at competitive rates per employee per month.

Comprehensive Payroll Package: Includes everything in Standard plus employment contract preparation, contract amendments, advanced leave management, foreign employee tax optimization, and priority support.

Add-On Services: Contract drafting, termination processing, audit support, and tax optimization consulting available as needed.

Contact us for a customized quote based on your specific situation.

Transform Your Payroll Management Today

Stop struggling with complex payroll calculations, tax withholdings, and RS.ge filings. Let our experienced team handle everything while you focus on growing your business.

Our professional payroll services ensure your employees are paid accurately and on time, your tax obligations are met perfectly, and you maintain full compliance with Georgian employment and tax law—all for a predictable monthly fee that's far less than the time and stress of managing payroll yourself.

 

Ready to simplify your payroll management? Contact us today for a free consultation. We'll review your current payroll situation, answer all your questions, and show you exactly how our services can save you time, reduce risk, and give you peace of mind that your payroll is handled expertly every month.

Professional payroll services in Tbilisi and throughout Georgia. Monthly payroll processing, employment contracts, leave management, and RS.ge tax compliance from experienced accountants who understand Georgian employment law.