Employer of Record in Andorra

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

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.

Employment laws in Andorra can be intricate, and even unintentional mistakes in contracts, benefits, or termination processes can carry legal and reputational consequences. With an Employer of Record, you gain a local partner that ensures every hire is compliant. The EOR takes care of drafting compliant contracts, processing accurate payroll, managing contributions to statutory benefits, and handling lawful terminations if needed, all according to local employment standards.

This level of protection is especially valuable when expanding into new or unfamiliar regions. Instead of using time and resources to build in-house legal knowledge, you gain immediate access to local expertise. The EOR keeps you ahead of regulatory updates and shields your company from potential compliance gaps, so you can confidently hire and manage employees while minimizing risk. For hiring managers and founders, it's the difference between hiring with uncertainty and building your team on a legally sound foundation.

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 on the last working day of the month.

Minimum Wage in Andorra

As of January 1, 2025, Andorra has a statutory minimum wage of €1447.33 per month, which represents a 5.2% increase compared to the previous year. This is equivalent to approximately €8.35 per hour.

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.

When you’re scaling quickly, setting up local payroll systems in each new country slows you down. In Andorra, the administrative load can include government registration, benefits management, and accurate, on-time payment delivery. An EOR gives you a plug-and-play solution that handles all of this while your internal team stays focused on growth, not red tape.

Key Ways an EOR Supports Payroll in Andorra:

• Rapid Payroll Setup: Onboards employees quickly with ready-to-go infrastructure.
• End Administration: Handles salary, tax, and benefits with no extra internal resources.
• Vendor Simplicity: Consolidates payroll across countries for centralized oversight.
• No Entity Required: Operates legally, saving your business the time and resources needed for local incorporation.

In Andorra, work permits and visas are essential for employers hiring foreign workers. The process involves securing a work permit, which authorizes employment, and a corresponding visa for legal entry and residency. Employers must meet strict requirements, including proving the need to hire foreign talent, advertising the position in the local market first, and adhering to local labor laws. The government sets annual immigration quotas, with 100 permits for work authorization without residence and 50 for self-employed individuals in 2025. Key visa types include the Seasonal Work Permit, designed for temporary and seasonal employment, the Passive Residency Permit for non-working individuals residing in Andorra, and the Active Residency Permit for foreign nationals engaged in employment or self-employment within the country.

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.

For startups and small teams, managing global employee benefits isn’t just complex, it’s a full-time job. In Andorra, understanding what benefits are required, how to deliver them, and how to stay compliant can be overwhelming, especially without local HR expertise. An Employer of Record removes that pressure by taking complete ownership of benefits administration, so you don't have to become an expert in local employment law.

Whether it’s healthcare contributions, pension enrollment, or statutory leave, the EOR ensures everything is delivered accurately and on time. They navigate any country-specific nuances, keep up with legal changes, and ensure each benefit is properly tracked and documented. For founders, that means fewer distractions and more time to focus on growth. Your employees get the security and support they expect from a local employer, and you get to scale your team in Andorra without building complex infrastructure or worrying about compliance missteps.

Termination Process in Andorra

Employee contracts can generally be terminated at will, as long as employees are notified before they're 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

1. 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 15 days' salary for each year worked, with higher rates possible for longer-serving employees. The calculation uses the average salary from the last 12 months, and maximum severance is often capped at 12 years of service.