Hire employees in Armenia
What a foreign company needs to know before employing people in Armenia: whether you need a local entity, why an employee costs exactly their gross salary with no employer contributions, what is withheld from pay, how notice and severance work, and what the permit quota system in force since 1 November 2026 means for foreign hires. Written for CHROs, CFOs, General Counsel and founders.
Employer of record in Armenia: quick answers
The questions leadership teams ask first.
Do I need a local entity in Armenia to hire?
No. There are three routes:
- Employer of Record. Dryft Global employs the person in Armenia through a compliant local employer, issues the written contract, runs monthly payroll and withholds income tax, the pension, stamp duty and health insurance. You direct the work.
- Direct local entity. You register a limited liability company online, free and with no minimum capital, then set up tax registration and payroll.
- Independent contractor. Lawful only for genuinely independent services. Where the person works like an employee, the arrangement carries reclassification risk.
When should I use an EOR instead of registering locally?
Use an EOR for your first hires in Armenia, and especially where a foreign national needs a permit under the quota system in force since 1 November 2026. Your own entity earns its keep for a sustained team, Armenian customers, or a technology business that will join the High-Tech Registry and claim its income tax refunds.
What does an employee actually cost beyond salary?
Nothing by statute. Armenia has no employer social contributions, so the employer cost equals gross salary. The employee pays 20% income tax, a funded pension contribution, stamp duty and a health insurance premium, all withheld by the employer. On AMD 1,500,000 a month the employee nets about AMD 1,086,700, or 72% of gross.
How difficult is termination in Armenia?
Dismissal needs a ground listed in the Labour Code, such as staff reduction, unsuitability or listed breaches. For liquidation or staff reduction the employer gives 2 months' notice and pays 1 month's average salary. For unsuitability, notice runs from 14 to 60 days by length of service. Unfair dismissal can lead to reinstatement or 1 to 12 months' average salary.
Can Dryft Global legally employ my team in Armenia?
Yes. Dryft Global employs your team through a compliant local employer. We issue written contracts, withhold and pay income tax, pension, stamp duty and health insurance by the 20th, apply for permits for foreign hires, and manage leave and termination.
Hiring routes compared
Speed, set-up burden and liability differ by route.
| Factor | Direct local entity | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Time to first payroll | Days to 2 weeks | Days to 2 weeks | Days |
| Local entity required | Yes, LLC | No | No |
| Withholding | Your registrations | Handled by Dryft Global | Withheld by the paying company |
| Foreign hire permit | You apply as employer | Dryft applies as employer | Still needed for non-EAEU nationals |
| Statutory liability | Direct corporate exposure | Assumed by Dryft Global | High if the work looks like employment |
| Best fit | Sustained team, high-tech registry | First hires, engineering teams | Short independent projects |
What an employee costs in Armenia
Armenia has no employer social contributions: every statutory charge is withheld from the employee. The model below is a Yerevan software engineer on AMD 1,500,000 gross a month in 2026, born after 1974, on the standard regime.
| Component | Employer share | Notes |
|---|---|---|
| Social contributions | None | No employer pension, health or unemployment charges |
| Funded pension | 0% | Withheld from the employee: AMD 87,500 at this salary; the state adds AMD 25,000 |
| Stamp duty and health insurance | 0% | Withheld from the employee: AMD 15,000 and AMD 10,800 at this salary |
| Total employer on-cost | 0% | Employer cost equals gross salary |
For an employee on AMD 1,500,000 a month, budget AMD 18,000,000 (about USD 49,950) a year before the EOR fee and any optional benefits. The employee's net pay is AMD 1,086,700 a month after 20% income tax, the pension, stamp duty and health insurance. Private health insurance and bonuses are extra. Ask us for a cost model with current rates applied.
Payroll and tax
Salary is paid in dram at least monthly, by the 15th of the following month. The employer withholds income tax, the funded pension, stamp duty and the health insurance premium, reports them in the monthly payroll calculation and pays by the 20th of the following month. A calculation sheet showing the amounts paid and withheld is provided on request.
Income tax and withholdings
Employment income is taxed at a flat 20% on gross salary with no personal allowance. The funded pension, for employees born on or after 1 January 1974, is 5% up to AMD 500,000 and 10% minus AMD 25,000 above, capped at AMD 87,500 a month. Stamp duty is AMD 1,000 up to AMD 1,000,000 and AMD 15,000 above. Health insurance is AMD 4,800 a month for salaries of AMD 200,001 to 500,000 and AMD 10,800 above; lower earners join from 2027.
Minimum wage 2026
The national minimum wage is AMD 75,000 a month, unchanged since 1 January 2023.
Leave and mandatory benefits
- Annual leave. At least 20 working days on a 5-day week, paid at average wage.
- Public holidays. Including New Year, Christmas, Army Day, Independence Day and, from 2026, a new day of remembrance on 27 January.
- Sick leave. The employer pays the first days, then the state at 80% of average wage; confirm the current split.
- Maternity. 140 days (more for complicated or multiple births), funded by the state.
- Paternity. 5 working days paid at average daily wage, within 30 days of the birth.
- Working time. 40 hours a week; overtime needs written consent and is paid at least 50% extra.
- Common extras. Private health insurance, bonuses, flexible hours and remote work.
Termination and notice periods
Probation can last up to 3 months, and either party may end the contract during probation on 3 days' notice. After that, the rules are as follows.
| Item | Rule |
|---|---|
| Liquidation or staff reduction | 2 months' notice and 1 month's average salary |
| Unsuitability or incapacity | 14 to 60 days' notice by service; severance of 10 to 44 days' average pay |
| Serious misconduct or resignation | No severance |
| Collective redundancy | 2 months' notice to the state employment body and representatives |
| Unfair dismissal | Reinstatement, or 1 to 12 months' average salary |
- Listed grounds. Dismissal must rest on a ground in the Labour Code.
- Representatives. Dismissing an elected representative needs the representative body's prior consent.
- Final settlement. Outstanding pay and unused leave are settled on termination.
Can I use independent contractors?
Only for genuinely independent work. Civil-law service contracts are common, and the paying company withholds 20% income tax on service fees, but Armenia has no codified reclassification test, so the substance of the relationship decides. Set hours, your managers, your tools and a fixed monthly fee all point to employment. Armenia has no specific regime for temporary agency work or staff leasing, so the employing structure for client-directed roles should be confirmed with counsel for each hire. For anyone who works like an employee, an EOR set up through a compliant local employer is the safe route.
The legal framework in brief
Armenia is a civil law system where the Labour Code sets minimum terms. The instruments you will hear most:
- Labour Code. Written contracts, probation, working time, leave, notice, severance and collective redundancy, with contracts moving onto a central digital system by July 2027.
- Law on Funded Pensions. The employee contribution and the state co-financing.
- Law on Universal Health Insurance. The premium withheld from salaries since 25 December 2025.
- Law on Foreigners. Since 1 November 2026, annual quotas replace the labour market test, and exemptions have been narrowed; EAEU citizens remain exempt.
- Data protection. Law HO-49-N of 2015, supervised by the Personal Data Protection Agency.
- Corporate tax. 18%, a turnover tax regime with 1% for high-tech, and no treaty of Armenia's own with the United States, where the old US to USSR treaty still applies.
Where the talent is
Armenia has a population of 3.097 million, with unemployment of 13.0% in the second quarter of 2026 and an average wage of AMD 308,927 a month in September 2026. The technology sector had more than 12,000 IT companies and about 41,400 IT employees in 2025. Armenian is the official language, Russian is widely spoken and English is common in IT. Armenia is on UTC+4 and is a member of the Eurasian Economic Union.
| Region | Talent and industry concentration |
|---|---|
| Yerevan | Capital, over one third of the population, technology, finance and services |
| Gyumri | Second city, growing technology and education centre |
| Vanadzor | Northern regional centre, education and services |
Armenia Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step checklist, from route selection to first payroll
- Written contract and probation set-up
- Gross to net with pension, stamp duty and health insurance
- Monthly withholding calendar
- Permit steps for foreign hires under the 2026 quota system
- Contractor and high-tech registry checklist
- Every official Armenian authority with direct links
Hiring in nearby markets
Employer of record and hiring guides for other countries in Europe: Austria · Belgium · Bulgaria · Croatia · Cyprus · Czechia · Denmark · Estonia. See all global hiring guides or compare routes in EOR vs PEO vs entity.
This guide is general information, not legal, tax or immigration advice. Armenia's health insurance and permit quota rules are new and still being implemented. Confirm current figures and the employment structure with a qualified adviser or with Dryft. Last reviewed November 2026.
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