Employer of Record in Armenia

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 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.

In Armenia, you must comply with working hour and overtime laws – including daily limits, overtime thresholds, and rest requirements – to stay compliant and build a strong employee experience. In 2026, you should expect continued scrutiny of overtime controls and accurate timekeeping, especially where total hours approach legal caps.

• Standard Working Hours: Full-time employment is 40 hours per week, typically 8 hours per day over 5 days.
• Overtime Thresholds: Total working time, including overtime, should not exceed 12 hours per day and is commonly managed within a 48-hour weekly cap in practice.
• Overtime Pay Rates: Overtime is generally paid at 150% of the employee’s standard hourly rate.
• Daily And Weekly Rest Requirements: Rest between shifts must be at least 11 hours, and weekly rest must be at least 35 consecutive hours.
• Night Work Restrictions: Night work may require enhanced compensation – commonly 130% of the standard hourly rate for night hours.
• Penalties For Non-Compliance: Non-compliance can result in disputes, inspection findings, and back pay liability where overtime and rest are not correctly provided.

Setting up a local legal entity in Armenia can be time-consuming and expensive. It often involves complex paperwork, local representation, banking, registrations, and ongoing tax filings, which isn't cost-effective if you're simply looking to hire a few employees or test the market. An Employer of Record removes these barriers entirely. Instead of spending months establishing a presence, an EOR lets you hire and onboard employees within days while staying fully compliant.

This enables faster market entry and greater agility. Whether you’re launching a pilot program, supporting a regional client, or adding specialized talent, you don't need to commit to long-term infrastructure to explore new business opportunities. The EOR handles local employment logistics while you retain day-to-day oversight of your hires. This model lets you scale up or down based on business needs, giving you more flexibility with less overhead and risk.

Running payroll in Armenia is mostly about correctly handling employee deductions rather than paying large employer-side contributions. Employers act as intermediaries for tax collection and must stay on top of monthly filings to stay compliant. Here’s the gist:

• Employee deductions to withhold: A flat 20% income tax, mandatory pension contributions, and a fixed military stamp duty ranging from AMD 1,500 to 15,000 depending on income.
• Minimal employer contributions: Employers generally don’t pay additional social or health insurance contributions (the employer rate is typically around 0%), but they carry full responsibility for accurate calculations, filings, and recordkeeping.
• Pension rules: For employees born after 1973/74, employers must apply the required pension withholding formula and remit contributions to the State Pension Fund.
• Reporting deadlines: All payroll filings and payments must be submitted to the State Revenue Committee by the 20th of the following month.
• Minimum wage: As of May 1, 2025, the minimum wage is AMD 75,000, with an increase to AMD 85,000 planned for 2026.

Using payroll management software, such as Playroll, can significantly simplify payroll processing by automating tax calculations, compliance tasks, and reporting, helping employers stay organized and avoid costly penalties.

One of the biggest risks in global hiring is payroll mismanagement. In Armenia, even small errors in tax reporting or social contribution payments can trigger audits, fines, or reputational damage. For companies without in-country expertise, the risk isn’t worth taking. An Employer of Record removes this burden by owning the legal responsibility of payroll, executing every step with built-in compliance.

Key Ways an EOR Supports Payroll in Armenia:

• Mitigates Compliance Risk: Oversees all legal obligations for payroll, tax filings, and recordkeeping.
• Local Regulatory Expertise: Interprets and applies Armenia’s latest labor and tax changes in real time.
• Free Processing: Reduces mistakes in wage calculations and reporting through built
• Payroll Record Management: Maintains compliant payroll audit trails and documentation for each employee.

Armenia’s immigration framework distinguishes between entry visas and residence-based work authorization. Most foreign employees will first obtain an appropriate entry visa (such as a visitor or business visa, or visa-free entry for eligible nationalities) and then apply in-country for a temporary residence permit or special residence status, which functions as the main basis for long-term work and stay. In parallel, the employer typically needs to secure a work permit from the Armenian authorities, unless an exemption applies.

Work authorization is regulated primarily by Armenian migration and labor legislation, and practice can evolve as institutions are reformed. Employers should pay close attention to eligibility criteria, document requirements, and renewal timelines, as well as any sector-specific rules. Because procedures and processing times can change, companies are strongly advised to verify current requirements with the Migration and Citizenship Service or a qualified local advisor before sponsoring foreign talent.

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.

Employee benefits in Armenia aim to promote stability, worker protection and long-term wellbeing. Employers must provide essential entitlements such as social security contributions, paid leave, sick leave and maternity protections – all of which support income security and access to key services.

Supplemental benefits allow employers to strengthen their competitiveness in Armenia’s evolving labour market. Popular additions – such as private medical insurance, meal or transport allowances and professional development – significantly improve the employee experience and support retention. Ensuring compliance with labour laws, safety regulations and documentation standards is essential for maintaining efficient payroll operations and reducing legal risk.

• Mandatory benefits provide core protections and income stability for employees
• Supplemental benefits help employers attract and retain skilled talent
• Legal compliance requires following Armenian labour, social security and safety laws
• Regular review helps maintain compliance, manage costs and meet employee needs

In Armenia, benefits play a central role in attracting and retaining top talent. Employees often expect more than just a paycheck – they're looking for stability, healthcare coverage, pension plans, and other perks that show a company is invested in their well-being. If you're not familiar with what’s standard or required, you risk falling short. An Employer of Record helps bridge that gap by administering a locally competitive benefits package that meets both legal requirements and employee expectations.

An EOR doesn't just check boxes, they make sure your employees receive benefits that are timely, properly communicated, and well-managed from the moment they’re onboarded. From managing healthcare contributions to adjusting for regional differences in leave or bonus entitlements, an EOR acts as both a legal and operational partner. The result is a better employee experience, less administrative burden on your internal team, and greater confidence that your offer is aligned with what top candidates in Armenia actually want and need.

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:

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

Notice Period in Armenia

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

1. Probationary employees: Require a 3-day notice.
2. Mutual agreement: Requires a 7-day notice.
3. Changes in employment terms: Require a notice period of 14-60 days, depending on tenure.
4. Staff reduction: Requires a 2-month notice.
5. Employee-initiated termination: Requires a 14-day notice period.
6. Employee-initiated termination due to illness, injury, or disability: Requires a 5 calendar day notice period.
7. Employees on probation must give 3 calendar days 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:

1. Less than 12 months: 10x average daily salary.
2. 1-5 years: 25x average daily salary.
3. 5-10 years: 30x average daily salary.
4. 10-15 years: 35x average daily salary.
5. Over 15 years: 44x average daily salary.