Our guide to Payroll in Armenia
With a rapidly growing tech sector and a competitive, business-friendly environment, Armenia is an emerging hub for innovation and digital talent, offering a strategic base for companies looking to expand and scale operations across the region.
Stay informed with expert guidance on Armenia’s local regulations and ensure your international payroll strategy is optimised for compliance and efficiency.
1. Introduction to Our guide to Payroll in Armenia
2. Setting Up a Business
3. Employment Practices
4. Taxation & Social Security
5. Payroll Operations
6. Hiring & Termination
7. Compensation & Benefits
8. Visas & Work Permits
9. Location-Specific Considerations
1. Introduction to Our guide to Payroll in Armenia
Doing Business in Armenia
Investing in Armenia
- Armenia offers favorable conditions for foreign investors, including liberal banking regulations, equal treatment for foreign and domestic businesses, and free economic zones specializing in technology, pharmaceuticals, logistics, and digital industries.
Business-based residency has been widely used by foreign investors; however, major reforms are planned for August 2026 introducing a digital-first five-year permanent residence card, with fast-track but stricter investor routes.
Basic Facts about Armenia
General Information
Full Name: Yerevan
Population: ~2.8–3 million
Capital: Armenian Dram (AMD)
Major Language(s): Armenian
How to Say
Hello: Բարեւ / Բարև (Barev)
Good Morning: Բարի առավոտ (Bari aravot)
Good Evening: Բարի երեկո (Bari yereko)
Do you speak English? Խոսո՞ւմ եք անգլերեն։ (Khosoom ek angleren?)
Goodbye: Ցտեսություն (Tstesutyun)
Thank you: Շնորհակալություն (Shnorhakalutyun)
See You Later: Կտեսնվենք (Ktesnvenk)
Public Holidays
Key national holidays include:
Jan 1–2: New Year
Jan 6–7: Armenian Christmas
Mar 8: International Women’s Day
Apr 24: Genocide Remembrance Day
May 1: Labor Day
May 28: Republic Day
Jul 5: Constitution Day
Sep 21: Independence Day
Dec 31: New Year’s Eve
2. Setting Up a Business
Registrations and Establishing an Entity
- Company registration is fast and mostly digital, typically completed in 1–3 working days, with 100% foreign ownership permitted and no minimum share capital required for LLCs.
Setting up of a Legal Structure
- Common legal structures include LLC, Joint Stock Company, Branch Office, and Private Entrepreneur (EOR alternative). LLCs are the most popular due to flexibility and suitability for foreign investors.
Banking
- Armenia’s liberal banking framework and equal treatment of foreign and domestic companies provide a supportive environment for opening bank accounts and operating financially.
3. Employment Practices
Working Week
- Standard working hours are 40 hours per week
Employment Law
Holiday Accrual / Calculations
- Governed by the Labour Code; statutory paid leave applies, with public holidays as mandated non-working days.
Maternity/Paternal Leave
- Covered under social insurance funded through general taxation (not employer contributions).
Sickness
- Social insurance benefits (healthcare, sickness) financed by general taxation.
National Service
- Military stamp duty is mandatory for all employees, supporting national defence funds.
Labor Law
- Digital employment contracts mandatory for new hires from Jan 1, 2026, with full digitization of existing contracts by Jan 1, 2027.
- Standard workweek: 40 hours; overtime minimum 150% pay.
4. Taxation & Social Security
Tax & Social Security
Tax Rates (2026)
Personal Income Tax: Flat 20% on employment income.
Corporate Income Tax: 18%.
VAT: 20%.
Dividends: 5%; other income (interest/rent): 10–20%.
Social Security
Armenia’s system is unique with zero employer social contributions; all mandatory contributions are employee‑funded.
Mandatory funded pension:
5% for income ≤ AMD 500,000
10% minus AMD 25,000 for income > AMD 500,000 (capped at AMD 87,500/month)
Military Stamp Duty: Flat AMD 1,000–15,000 depending on salary.
Reporting
Income tax and unified social payments are withheld and filed monthly through the electronic reporting system.
Minimum wage in 2026
The gross minimum monthly wage is AMD 75,000 in 2026.
Government plans indicate an increase to AMD 85,000 by 2026 under long-term policy commitments.
5. Payroll Operations
Payroll
Reports
Employers must monthly report and remit:
- 20% income tax
- 5–10% pension contributions
- Military stamp duty
Payroll cycle is monthly; compliant payslips and electronic submissions are mandatory
6. Hiring & Termination
New Employees
Employment contracts must be digitized and registered with the State Revenue Committee by June 1, 2026.
Leavers
Terminations must follow the Labour Code, with proper documentation and notice. Digitized contracts simplify termination procedures.
7. Compensation & Benefits
Employee Benefits
- Mandatory benefits include paid leave, sick leave coverage via state social system, and maternity protections.
- Supplementary benefits are common but not required (e.g., bonuses, health insurance)
8. Visas & Work Permits
Visas & Work Permits
Major immigration overhaul effective Nov 1, 2026, introducing:
- Dedicated work visa requiring prior approval
- Removal of labor market testing
- Annual quota for foreign workers
- Fully online residence permit system
Work visa allows stays up to 120 days/year, fee AMD 15,000.
Temporary visa exemption (Jan–July 1, 2026) for nationals of 113 countries holding valid residence permits from US/EU/Schengen/GCC etc., allowing stays up to 180 days/year
9. Location-Specific Considerations
Key changes for 2026
In 2026, Key changes include:
- Digital employment contracts mandatory starting Jan 1, 2026; full conversion required by 2027.
- Immigration reforms postponed to Nov 1, 2026 with new work visa, quotas, and digitalized residence system.
Updated social insurance limits and enhanced insurance compensation thresholds from April 2026
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