Hiring in Georgia: A Comprehensive Guide for US-Based Companies

Georgia is rapidly emerging as a strategic destination for international hiring. With its strong focus on STEM education, robust IT infrastructure, and government-backed incentives for tech and remote work, Georgia offers a compelling environment for foreign companies seeking skilled talent. 

The country’s workforce is highly educated, multilingual, and known for its adaptability and strong work ethic. For US-based businesses, hiring in Georgia means access to a cost-effective talent pool, a favorable business climate, and a gateway to Eastern Europe and Central Asia.

Georgia’s labor laws are designed to protect both employers and employees, offering flexibility in contract types and working arrangements. The country’s emphasis on digitalization and openness to remote work further enhances its appeal for companies looking to build distributed teams or expand globally.

How to Hire Employees in Georgia

Assess Your Hiring Needs

Before hiring in Georgia, clarify your workforce requirements:

• Full-time vs. Project-Based Support: Decide if you need full-time employees for ongoing roles or contractors for short-term projects. Georgia’s labor laws accommodate both, but each comes with different compliance obligations.

• Local Compliance Requirements: Ensure you understand Georgian labor codes, including contract formats, statutory benefits, and payroll contributions.

• Onboarding Speed vs. Long-Term Control: Consider whether rapid onboarding (using an EOR) or direct employment (via a legal entity) better suits your growth plans. EORs offer speed and simplicity, while entities provide more control.

Hiring Options in Georgia

You have two main pathways:

• Set Up a Legal Entity: Establishing your own company in Georgia allows for direct hiring, but involves significant setup time, ongoing compliance, and administrative costs. This route is best for companies planning a long-term presence.

• Partner with an Employer of Record (EOR): An EOR acts as the legal employer, handling payroll, compliance, and HR administration. This enables you to hire quickly and compliantly without forming a local entity.

EOR vs. Legal Entity: Side-by-Side Comparison

Feature	Employer of Record (EOR)	Legal Entity Setup
Setup Time	Rapid (days to weeks)	Lengthy (months)
Compliance Management	Handled by EOR	Your responsibility
Payroll & Tax Filing	Managed by EOR	Must be set up and managed locally
Onboarding Speed	Fast	Slower
Cost	Pay per employee/month	High upfront and ongoing costs
Long-Term Control	Limited	Full control
Suitable For	Quick market entry, pilot teams	Large teams, long-term operations

For a deeper dive into EOR solutions, check out Employer of Record: Complete Guide for Global Employers and Top 20 Countries Where You Definitely Need an EOR Service.

Understanding Worker Classification

Employees vs. Contractors in Georgia

Correctly classifying your workforce is critical. Here’s how employees and contractors differ:

Aspect	Employee	Contractor
Legal Relationship	Bound by employment contract, subject to labor code	Engaged via service contract, not covered by labor code
Tax Withholding	Employer withholds and remits taxes	Contractor manages own taxes
Benefits	Entitled to statutory benefits (leave, severance, etc.)	No statutory benefits
Work Direction	Employer sets hours, duties, and supervision	Contractor controls own work
Termination	Protected by notice and severance rules	Subject to contract terms

Legal Implications and Risks of Misclassification

Misclassifying an employee as a contractor can lead to significant legal and financial penalties in Georgia. The labor code provides strong protections for employees, including notice periods, severance, and statutory benefits. 

If authorities determine a contractor is actually functioning as an employee, your company may be liable for back taxes, social security contributions, and fines. Always review contract terms and actual working arrangements to ensure compliance.

For more on global classification, read Freelancers, Independent Contractors, and Consultants: Exploring Opportunities and Challenges.

Hiring Costs and Payroll

Hiring Costs Overview

Hiring in Georgia is cost-effective compared to Western Europe or North America. Key cost components include:

• Gross Salary: Determined by market rates and role seniority.
• Employer Social Contributions: Employers must contribute to the social security fund.
• Severance and Benefits: Required by law in cases of termination or as part of statutory benefits.
• EOR or Payroll Provider Fees: If using an EOR, expect a monthly fee per employee.

Payroll Setup Steps

To run payroll in Georgia, you’ll need to:

• Register as an employer (if setting up a legal entity).
• Collect employee tax identification and banking details.
• Calculate gross-to-net pay, including deductions for taxes and social security.
• Remit payroll taxes and contributions to Georgian authorities.
• Provide payslips and ensure timely salary payments (monthly is standard).

Income Tax Rates

Georgia has a flat personal income tax rate of 20% for employees. Employers are also responsible for remitting social security contributions. Be sure to check for any updates or sector-specific requirements.

Payment Methods

Common ways to pay employees and contractors in Georgia include:

• Direct Deposit: Most salaries are paid via bank transfer.
• Wire Transfers: Used for international or contractor payments.
• EOR Payroll: EORs handle all payments, ensuring compliance and timely remittance.

Using Global Payroll Services

Global payroll providers and EORs simplify compliance by:

• Managing local tax calculations and filings.
• Ensuring on-time salary and benefit payments.
• Providing consolidated reporting and support for multi-country teams.

Learn more on How to Pay International Employees and Reducing Payroll Costs in Global Operations.

How to Properly Hire and Pay Contractors

When engaging contractors in Georgia:

• Use a clear service contract outlining scope, deliverables, and payment terms.
• Do not control their work hours or methods—this distinguishes them from employees.
• Pay via wire transfer or other agreed methods.
• Ensure contractors manage their own taxes and social contributions.

Here are the Things to Know Before Paying International Contractors.

Compliance Risks

Incorrect Payroll Contributions

Failure to remit correct payroll taxes and social security contributions can result in fines and legal action. Always ensure payroll is processed accurately and on time.

Permanent Establishment Risk

Hiring employees directly (without an EOR) may create a permanent establishment (PE) in Georgia, triggering corporate tax obligations. Using an EOR can help mitigate this risk for companies testing the market or hiring a small team.

Learn more about compliance challenges in Compliance Challenges When Establishing an Entity Overseas.

Statutory Benefits

Employers must provide:

• Paid annual leave (minimum 24 days)
• Sick leave (terms set by contract)
• Parental leave (including maternity and parental leave)
• Severance pay (in case of certain terminations)

Misclassification Risks

Incorrectly classifying workers exposes your business to:

• Back payment of taxes and benefits
• Penalties for non-compliance
• Legal disputes and reputational harm

Provincial/Regional Law Variances

Georgia’s labor laws are national, with minimal regional variation. However, always verify if local ordinances apply to your sector or business location.

Overview of Main Types of Intellectual Property Rights

Intellectual property (IP) created by employees in the course of their work generally belongs to the employer, unless otherwise agreed. It’s crucial to:

• Define IP ownership in employment contracts
• Address “work made for hire” and post-employment restrictions
• Compensate employees for non-compete and IP clauses if required

Here’s what you need to know about Managing Intellectual Property (IP) Through EOR: Key Considerations for Businesses.

Onboarding Process

Before Their First Day

• Prepare a written employment contract (required for contracts over one month).
• Collect personal and banking details.
• Set up payroll registration and compliance checks.
• Provide onboarding materials and equipment as needed.

On Day 1

• Review and sign the employment contract.
• Introduce company policies, code of conduct, and remote work guidelines.
• Ensure access to necessary systems and equipment.

During Their First 90 Days

• Monitor performance and provide feedback.
• Complete any required training or certifications.
• Conduct regular check-ins, especially if the employee is on probation (up to six months allowed).

Offer Letter Essentials

A Georgian offer letter should include:

• Job title and description
• Compensation and benefits
• Working hours and location
• Start date and probation period (if any)
• Termination and notice terms

Find the templates here: Employment Contracts in Georgia.

NDAs and Confidentiality

Include non-disclosure agreements (NDAs) and confidentiality clauses in employment contracts to protect sensitive business information. Non-compete clauses may be included for up to six months post-employment, with compensation.

Running Background Checks

Background checks are allowed with employee consent and must comply with Georgia’s Personal Data Protection Law. Only collect data relevant to the role and ensure secure handling of personal information.

Remote Employee Management

Managing remote employees in Georgia requires clear processes and robust digital infrastructure:

• Computer and App Access: Provide secure laptops, VPNs, and access to necessary software. Ensure compliance with data security standards.
• IP Protection: Clearly define IP ownership in contracts and use secure collaboration tools.
• Types of IP Rights: Address copyright, patents, and trade secrets in employment agreements.
• Best Practices: Schedule regular video check-ins, set clear performance metrics, and foster team culture through virtual engagement.

Learn more:  How to Manage Employees Remotely and Globally and Building Organizational Culture in Remote Teams.

Labor Law Compliance

Key Working Condition Requirements

• Working Hours: Standard is 40 hours per week. Some sectors may require up to 48 hours.
• Rest Periods: At least 12 hours between shifts; one 24-hour rest period per week.
• Annual Leave: Minimum 24 paid days per year.
• Sick Leave: Terms set by contract, typically unpaid unless otherwise agreed.
• Parental Leave: 126 days paid maternity leave; additional unpaid parental leave available.

Working Conditions by Employment Type

• Full-Time: Entitled to all statutory benefits and protections.
• Part-Time: Pro-rated benefits; protected by labor code.
• Contractors: Not covered by statutory benefits; governed by service contract.

No At-Will Employment

Georgia does not recognize at-will employment. Termination must follow legal grounds and notice requirements.

Trade Unions and Collective Bargaining

Employees have the right to join trade unions and engage in collective bargaining. While unionization rates are low in many sectors, employers must respect these rights.

Check out Employment Compliance and Its Importance.

Termination Guidelines

Acceptable Termination Reasons

Employers may terminate employment in Georgia for:

• Mutual agreement
• Contract expiration or task completion
• Employee resignation
• Disciplinary reasons (serious misconduct)
• Economic downturns, reorganization, or technological changes
• Incompatibility with job requirements
• Prolonged incapacity (over 40 consecutive days or 60 days in six months)

All terminations must be documented and justified per the labor code.

Notice Periods and Legal Protections

• Notice Period: Standard is 30 calendar days. Shorter notice requires additional severance.
• Severance Pay: One month’s salary if 30 days’ notice is given; two months’ salary for shorter notice.
• Written Justification: Employers must provide written reasons for dismissal within 7 days if requested.
• Right to Challenge: Employees may challenge dismissals in court if procedures are not followed.

For severance regulations, read Severance Regulations Across Countries.

Benefits of Hiring in Georgia

• Skilled Talent Pool: Highly educated workforce, especially in IT, engineering, and finance.
• Cost Efficiency: Lower salary and operational costs than Western Europe or the US.
• Time Zone Benefits: Overlaps with both European and Asian markets, ideal for global operations.
• Business-Friendly Environment: Streamlined labor laws, digital contract options, and government incentives.
• Multilingual Workforce: English, Russian, and other languages widely spoken.
• Strong Work Ethic: Employees are known for reliability and adaptability.
• Modern Infrastructure: High-speed internet and growing tech ecosystem.

Georgia as a Hub for Talent and Innovation

Hiring in Georgia offers US-based companies a strategic combination of skilled talent, cost efficiency, and operational flexibility. With a modern legal framework, digital-friendly processes, and a workforce eager to participate in global teams, Georgia stands out as a top destination for international expansion. By understanding local compliance, leveraging EOR solutions, and following best practices for onboarding and management, you can build a high-performing team in Georgia with confidence.

Ready to hire in Georgia? Discover how Tarmack can simplify your global hiring, payroll, and compliance. Book a demo today.

For further reading on international hiring, check out:

• How to Hire International Employees
• The Need for EOR, PEO, and AOR for Global Expansion
• Going Global: Choosing a Global EOR Partner