Armenia is fast becoming a destination of interest for international employers seeking cost-effective, skilled talent in a rapidly developing tech and creative services market. With strong educational institutions, a growing startup ecosystem, and digital infrastructure centered in Yerevan and other urban hubs, Armenia offers a workforce well-versed in IT, engineering, design, and customer support. Its geographic location allows convenient collaboration with both European and Middle Eastern time zones, while favorable business reforms and low operating costs continue to attract foreign investment.

Despite its growing appeal, Armenia’s labor landscape includes regulatory complexities that global employers must understand before hiring. From contract requirements and payroll compliance to social contributions, work permits, and termination protocols, it is essential to navigate the local system carefully. 

This guide will walk you through your hiring options in Armenia, outline what an Employer of Record (EOR) can handle, explain payroll and tax rules, and help you stay compliant with Armenian labor laws. By the end, you will have a clear idea of whether working with an EOR is the right solution for building your team in Armenia.

How to Hire Employees in Armenia

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Setting up a Legal Entity

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Working with an Employer of Record (EOR)

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Learn more about Employer of Record services

Hiring Independent Contractors

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Learn about hiring contractors in Armenia

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A fast-growing IT hub with mandatory social contributions, a new pension pillar system, and Armenian Labor Code requirements.

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Using an Employer of Record in Armenia

An Employer of Record in Armenia acts as the local legal employer of your workforce while you direct their daily responsibilities. This helps you operate compliantly and efficiently, particularly if you are hiring for the first time in the country.

EORs in Armenia handle the following core functions:

  • Drafting employment contracts in Armenian (with English translations where needed) that meet the standards of Armenia’s Labor Code.
  • Registering employees with the State Revenue Committee and the State Social Insurance Fund.
  • Processing payroll and payslips, including gross-to-net salary calculations.
  • Withholding and remitting employee income taxes and social security contributions.
  • Managing onboarding, leave administration, benefits delivery, and terminations.
  • Ensuring proper recordkeeping, filings, and compliance with inspections.
  • Supporting visa sponsorship, renewals, and work permit administration for foreign hires.
  • Offering employee support services for HR questions, tax forms, or legal concerns.

The EOR essentially becomes your partner in compliance and administration, reducing the burden on your internal teams and lowering the risks associated with unfamiliar legal systems.

How Much Does Employer of Record Cost in Armenia?

The cost of using an Employer of Record (EOR) in Armenia depends on a variety of factors, including the size of your team, the complexity of services you require, and the provider’s pricing model.

Armenia EOR costs typically range from $82 to $500 per employee per month. Remote People offers Armenia EOR services starting at $199/month per employee with no hidden fees. Some providers offer flat-rate pricing, while others charge a percentage of each employee’s gross salary, typically ranging from 8% to 15%.

What’s included in the fee often varies by provider, but typically covers:

  • Drafting compliant employment contracts in accordance with Armenian labor law
  • Monthly payroll processing and salary disbursement
  • Income tax withholding and social security contributions
  • Benefits administration (e.g., paid leave, optional health insurance)
  • Ongoing legal and HR compliance support
  • Employee onboarding and offboarding

While EOR fees represent an added cost compared to direct hiring, they often offer significant savings in time, legal setup costs, and compliance risk mitigation, especially for companies without a local legal entity.

If you’re unsure which pricing structure suits your business, Remote People can help you compare trusted Armenia EOR providers and find the best match for your hiring goals and budget.

Employment and Labor Laws in Armenia

Employment Contracts

In Armenia, employment is highly regulated by the Labor Code. Employment contracts must be in written form. The contract must be written in Armenian (the version in the other language can be attached for better understanding). In case of dispute, the Armenian version is valid. The contract is made in two copies, one for the employee and one for the employer.

A written contract must be signed by both the employer and the employee. It must include the employer’s name, employee’s name, starting date, title, description of position, place of work, term (fixed or indefinite), working hours, and salary (the amount in AMD and frequency of payments).

The employment contract in Armenia may be of several types; however, if the type of contract is not specifically mentioned in the contract, the labor law assumes an indefinite-term contract.

The types of employment contracts are:

  • Indefinite-term (open-ended contract): The default and most common type of contract;
  • Fixed-term contracts: Allowed only in cases provided by law (specific jobs or on a temporary basis)
  • Seasonal or temporary contracts: These contracts are used for work to be done only during a certain season or for a specific, limited time

Employment contracts must also provide the terms of granting leaves, rest time and termination of the agreement. A contract that does not meet these requirements may be declared invalid.

Working Hours and Overtime

In Armenia, working hours are regulated under the Labor Code, which states that a normal workweek is 40 hours. The workweek is usually five days, with eight hours each working day. The law also provides that working time, including overtime, cannot exceed 48 hours a week or 12 hours a day.

Overtime is regulated and limited to 120 hours a year. Employers must keep records of all extra hours worked by their employees.

Workers in certain fields, such as those who work in harmful or dangerous conditions, are entitled to reduced hours (a maximum of 36 hours per week). Night work (10 PM – 6 AM) must be compensated at a higher rate — typically at least 130% of the standard wage. Night shifts are limited to 7 hours. Workers in hazardous conditions are limited to 36 hours/week.

Social Security

Social security contributions in Armenia are primarily associated with the state pension system.

Contribution TypeRate / AmountNotes
Employee Pension Contribution5% / 10% (with cap)Mandatory for those born after Jan 1974
Employer ContributionNoneEmployers act as withholding agents only
Military Stamp DutyAMD 1,000 or AMD 15,000Amount depends on salary level

Employers do not make separate pension contributions, but are withholding agents of the employee’s share, submitting it to the authorities each month. The payments go to finance state pension benefits. Healthcare is generally funded via separate public health programs.

Probation Periods

The probationary period in Armenia is regulated by the Labor Code. Its duration is determined at no more than three months, while in cases provided for by the law, such as highly specialized jobs, it can be up to six months.

During the probationary period, the employer and the employee are fully subject to the rights and obligations established by the law, including those that provide for guarantees to workers on issues such as working hours, pay, and working conditions. 

At any time during the probationary period, either the employee or the employer may unilaterally terminate the employment contract by giving at least three days’ written notice. The Armenian legislation does not allow a probationary period for employees under the age of 18.

Payroll and Employment Taxes in Armenia

Payroll Processing and Payslips

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Minimum Wage

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Employer Tax Contributions

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Income Tax

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Bonus Payments

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Filing and Reporting

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Visas and Work Permits in Armenia

Foreign citizens in Armenia are required to have a work permit to be employed by an Armenian company unless exempted by law. The issued work permit is typically tied to a temporary residence card, which is valid for up to one year and can be renewed. The company is required to file the work permit application on behalf of the foreign employee, provide evidence of the need for a foreign employee, submit an employment contract, list the qualifications required for work, and pay the state duty.

A temporary residence card (valid for 1 year) costs AMD 105,000. Permanent residence cards (valid for 5 years) cost AMD 140,000. Special residence cards (valid for 10 years) cost AMD 150,000. The procedure takes up to 30 days, and up to 60 days for complex cases.

If you plan to hire foreign nationals in Armenia, you will need to sponsor their work permits and visas. The process includes:

  • Applying to the Ministry of Labor or relevant agencies for a work permit
  • Providing an employment contract, proof of business activity, and justification for hiring a foreigner
  • Assisting the employee with obtaining a work visa or residence permit
  • Renewing work permits and tracking expiration dates

Work permits typically take four to eight weeks to process. Foreign employees may not begin work until a valid permit is issued. An EOR can manage this entire process, reducing delays and ensuring legal compliance.

Remote People can assist companies with the preparation of documents, compliance with Armenian labor law, filing of applications and residence permit renewals or sponsorship where necessary.

Hiring Contractors in Armenia

A contractor relationship is covered by civil laws, not labor laws. Contractors work on service agreements, which usually include the work to be done, the results and timeline for the work, and the payment amount and schedule. 

The contractor is liable for their own tax and social security payments. The contractor relationship must be clearly differentiated from employee relationships to avoid false designation; otherwise, the employer can face legal issues. Contractors usually provide services at their own fees, which are subject to 20% Value Added Tax (VAT) on most goods and services.

Workers' Compensation in Armenia

Workers’ compensation in Armenia is provided through the social security system. It covers work-related injury, illness, and occupational disease. Employers are responsible for maintaining safe workplaces and preventing accidents. Workers cannot sue their employer, but may be compensated for medical expenses, rehabilitation, lost wages, and disability. Benefits are typically paid within one year of the accident.

In order to receive benefits, the employee should provide medical documentation and notify the employer about the injury or disease. Labor law also prohibits the termination of employment during the period of approved sick leave. Employers and employees make contributions to the social insurance fund, which finances the benefits. The system is designed to maintain the safety and welfare of the workers.

Time Off and Leave in Armenia

Mandatory Leave Entitlements

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Public Holidays

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Sick Leave

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Parental Leave

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Maternity Leave

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Other Leave

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Terminations and Severance in Armenia

Grounds for Termination

Employment contracts in Armenia may be terminated under several conditions, but each must comply with the procedures outlined in the Labor Code. Common grounds for lawful termination include:

  • Mutual agreement between employer and employee, documented in writing and specifying the terms of separation.
  • Voluntary resignation, where the employee gives advance written notice, typically at least 14 calendar days.
  • Expiry of fixed-term contracts, which automatically terminate unless renewed or converted into indefinite contracts.
  • Termination for cause, such as misconduct, repeated poor performance, breach of contract, or violations of internal policies. In these cases, employers must have written warnings or documented infractions to justify dismissal.
  • Economic grounds, including redundancy due to restructuring, reduced workload, or business closure. This requires the employer to demonstrate a legitimate operational reason for ending the role.

In all cases, employers must provide written notice of termination, clearly stating the reason, the effective date, and any entitlements. Failure to follow this process may result in legal challenges or penalties.

Notice Periods

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Severance Pay

Severance is mandatory when termination occurs for reasons not related to the employee’s conduct, such as redundancy, role elimination, or the expiration of a fixed-term contract without renewal.

Continuous Length of ServiceSeverance Pay
Less than 1 year10× average daily salary
1–5 years25× average daily salary
5–10 years30× average daily salary
10–15 years35× average daily salary
15+ years44× average daily salary

For company-related terminations (liquidation, redundancy), severance equals one month’s average salary. Collective/individual contracts may provide for higher amounts.

In addition to severance, employers must also compensate the employee for any unused paid leave, outstanding bonuses, or other employee benefits accrued during employment. Severance is not typically required in cases of resignation or termination for cause, unless otherwise agreed.

Severance amounts must be calculated based on the employee’s most recent average monthly earnings, including any variable pay components that were regularly received, such as bonuses or overtime.

Final Settlement and Deregistration

Armenia’s labor code includes mandatory social contributions and strict employment contract requirements. An Armenian EOR handles payroll and compliance. No local entity needed.

Expand into Armenia Easily with Remote People’s Employer of Record (EOR) Solution

Ready to hire in Armenia without entity setup? Remote People is a trusted Employer of Record provider serving 150+ countries. Our Armenia EOR service starts at $199/month per employee — with zero employer social contributions and a flat 20% income tax, Armenia is one of the most cost-effective hiring destinations in the region. We handle payroll, Labor Code compliance, and work permit sponsorship. Get a free quote today.

Frequently Asked Questions

An Employer of Record (EOR) is a service provider that acts as the legal employer of your team in Armenia. The EOR handles all employment duties including payroll, taxes, benefits, compliance with Armenian Labor Code, and mandatory reporting. You retain full operational control over your employees' work.

Remote People's Armenia EOR service starts at $199/month per employee with no hidden fees. Pricing may vary based on service level and headcount.

No. Armenia has zero mandatory employer social contributions — one of its key advantages. Employees pay 5-10% of their salary for pension contributions (capped at AMD 87,500/month). Employers only withhold and remit employee contributions to the State Revenue Committee.

Armenia has a flat 20% personal income tax on all employment income — one of the simplest and most transparent tax systems in the region.

The minimum wage is AMD 75,000/month (approximately $185 USD) as of 2025. The government plans to increase it to AMD 85,000/month (~$210 USD) in 2026.


No. An EOR service like Remote People acts as the legal employer, eliminating the need to set up a local company. You can hire and manage employees in Armenia within days without entity formation costs.

Notice periods depend on length of service and reason for termination, ranging from 14-60 days. For cause termination, notice can be immediate.

Maternity leave is 140 days (70 before birth, 70 after). It is extendable in cases of complications. Paternity leave is 5 working days within 30 days of birth.