Hiring Employees in Georgia - Entrepreneur's Guide

As your Georgian business grows, hiring employees becomes essential for scaling operations. Georgia's straightforward labor regulations, reasonable employment costs, and growing talent pool make it practical for entrepreneurs to build teams. Understanding employment procedures, costs, and compliance requirements enables effective workforce planning and management.

Employment Costs and Budget Planning

Salary expectations in Georgia remain affordable compared to Western markets while offering good living standards for local employees. Entry-level office positions typically start around GEL 1,000-1,500 monthly (approximately $370-550 USD), mid-level professionals earn GEL 2,000-4,000 ($740-1,480), and senior specialists or managers command GEL 4,000-8,000+ ($1,480-2,960+). These figures represent gross salaries before tax deductions, though Georgian tax rates keep net take-home amounts quite close to gross figures.

Employer social contributions add approximately 2% on top of gross salary, representing Georgia's remarkably low employer burden compared to most countries where social taxes range from 20-40%. This 2% pension contribution is employer's only mandatory contribution beyond the salary itself. Income tax is withheld from employee salaries at 20% flat rate but this employee's responsibility not employer cost. The low employer contribution makes Georgian employment costs highly predictable and manageable.

Total employment costs for entrepreneurs therefore consist primarily of agreed salary plus 2% pension contribution. A GEL 2,000 monthly gross salary costs employer GEL 2,040 total including pension contribution. This transparent cost structure contrasts sharply with countries where mandatory insurance, unemployment contributions, and other levies substantially inflate costs beyond stated salaries. Georgian entrepreneurs can confidently budget knowing employment costs closely match agreed compensation.

Employment Contract Requirements

Written employment contracts are mandatory under Georgian labor law, protecting both employer and employee through clearly defined terms. Contracts must specify employee's position and duties, salary amount and payment schedule, working hours and schedule, workplace location, contract start date, and contract duration if fixed-term. Both parties sign the contract and the employer registers it with the Labor Inspection Service through their online system within one month of employment commencement.

Contract types include indefinite-term contracts for permanent positions and fixed-term contracts limited to specific periods or projects. Fixed-term contracts require legitimate reasons such as temporary business needs, seasonal work, or project-based arrangements. Most standard employment uses indefinite-term contracts providing ongoing employment relationship until either party terminates with proper notice. The contract type selection should reflect actual business needs as fixed-term contracts cannot simply circumvent indefinite employment obligations.

Probationary periods up to six months allow employers to evaluate new employees before confirming permanent employment. During probation either party can terminate with shorter notice periods or sometimes without notice depending on contract terms. After successful probation completion the employee continues under normal indefinite contract terms. Probation provides valuable risk mitigation for entrepreneurs hiring employees whose capabilities or cultural fit remain uncertain until proven through actual work performance.

Working Hours and Schedules

Standard working hours in Georgia equal 40 hours weekly, typically structured as eight hours daily across five working days. Employment contracts specify exact schedules including start and end times, break periods, and weekly days off. Entrepreneurs have flexibility structuring schedules to match business needs while respecting legal maximums. Alternative schedules like four 10-hour days or flexible start times are permissible if documented in employment contracts.

Overtime work requires employee consent and compensation at 1.25 times normal hourly rate for work beyond 40 weekly hours. Annual overtime cannot exceed 100 hours per employee unless both parties agree to increase this limit. Entrepreneurs should structure workloads reasonably to minimize overtime reliance, as regular overtime indicates understaffing. Occasional overtime handles temporary workload spikes but systematic overtime suggests need for additional hiring.

Rest periods and breaks ensure employee wellbeing while maintaining productivity. Employees working more than five hours daily receive minimum 30-minute break, typically for lunch though timing remains flexible. Weekly rest includes consecutive 48-hour period, usually Saturday-Sunday though alternative weekly patterns are permissible if specified in contracts. These requirements ensure reasonable work-life balance benefiting both employee satisfaction and sustained business performance.

Leave Entitlements and Management

Annual paid leave provides 24 working days minimum per year for employees completing one year service. Entrepreneurs must grant this leave within the calendar year or carry forward unused days to the following year if mutually agreed. Leave scheduling balances employee preferences with business operational needs. Written leave requests help maintain documentation while flexibility around leave timing builds goodwill supporting employee retention and satisfaction.

Sick leave entitlement depends on contract terms and company policy rather than statutory requirements. Many employers provide some paid sick days as employee benefit though no legal minimum exists. Unpaid sick leave is generally permissible for reasonable illness durations with medical documentation. Entrepreneurs starting businesses often begin with minimal sick leave policies then enhance benefits as business grows and seeks to attract better talent through improved conditions.

Maternity leave provides 730 calendar days for childbirth and childcare, with government social benefits covering part of this period. Fathers receive paid leave for two weeks around birth. Adoptive parents receive similar entitlements. These generous provisions support working families though employers should plan for temporary workforce gaps. Hiring temporary replacements or redistributing responsibilities helps maintain operations during extended parental leaves.

Payroll Administration and Compliance

Monthly payroll processing involves calculating gross salary, deducting 20% income tax and 2% employee pension contribution, adding 2% employer pension contribution, and transferring net salary to employee. Income tax and pension contributions must be paid to Revenue Service by the 15th of following month. The relatively simple calculation makes payroll manageable for small businesses, though many entrepreneurs use accountants or payroll services ensuring accuracy and compliance.

Payslips documenting salary calculations and deductions should be provided monthly to employees. While not strictly legally required, payslips demonstrate transparency and professionalism while preventing misunderstandings about compensation. Digital payslips through email or accounting software satisfy this requirement efficiently. Maintaining organized payroll records protects entrepreneurs during any tax audits or labor disputes by proving proper compensation and tax compliance.

Annual employer declarations summarize all payments to employees and tax contributions throughout the year. These declarations submit to Revenue Service typically by April of following year, reconciling all payroll activity. Using accounting software or professional accountants ensures these annual reports complete accurately and submit timely, avoiding penalties while maintaining good standing with tax authorities.

Termination Procedures and Notice Periods

Employment termination requires proper notice periods respecting both employee rights and business operational needs. For indefinite-term contracts, employers must provide 30 days written notice or pay 30 days salary in lieu of notice. Employees typically provide 30 days notice when resigning though some contracts specify shorter periods. Notice periods allow time for knowledge transfer, hiring replacements, and orderly transition minimizing business disruption.

Termination grounds vary between voluntary resignation, mutual agreement, and employer-initiated dismissal. Voluntary resignations simply require employee written notice. Mutual agreements allowing immediate separation with negotiated terms offer flexibility for both parties. Employer dismissals without employee fault require proper notice and severance equal to one month salary for each year worked, creating meaningful obligations encouraging retention where feasible.

Dismissal for cause, meaning employee serious misconduct or contract violations, allows termination without notice or severance but requires proper documentation of misconduct. Entrepreneurs should document performance issues, policy violations, or other problems through written warnings before dismissal for cause. Proper documentation protects against potential labor disputes while encouraging performance improvement before resorting to termination.

Finding and Attracting Talent

Job boards and recruitment platforms serve as primary hiring channels in Georgia. Local sites like jobs.ge and hr.ge attract Georgian talent, while LinkedIn increasingly dominates professional recruitment particularly for international companies and higher-level positions. University career centers provide access to recent graduates for entry-level roles. Recruitment agencies handle specialized hiring though fees typically equal one month salary making this option worthwhile mainly for difficult-to-fill positions.

Competitive compensation packages require understanding market rates for specific roles and experience levels. Salary surveys from recruitment agencies provide market data, while networking with other entrepreneurs reveals prevailing compensation ranges. Beyond salary, benefits like remote work flexibility, professional development opportunities, modern equipment, and positive work culture increasingly influence candidate decisions. Entrepreneurs competing with larger companies emphasize flexibility, direct impact, and growth opportunities.

English language capability varies significantly among Georgian workforce. Younger professionals, IT specialists, and university graduates typically speak good English while older workers or those in traditional industries may have limited English skills. Entrepreneurs should assess language requirements honestly per role, offering higher compensation for English-proficient candidates when truly necessary but avoiding unnecessarily restricting talent pool when Georgian language suffices for position duties.

Workplace Culture and Management

Georgian workplace culture traditionally emphasizes hierarchical relationships and formal professional interactions, though younger generation and technology companies increasingly adopt more casual Western business cultures. Entrepreneurs should consider whether formal or informal culture better suits their business model and target employees. Being explicit about company culture during hiring ensures cultural alignment reducing future friction around expectations and working style.

Performance management through regular feedback, clear goal setting, and documented evaluations improves employee productivity while providing legal protection if termination becomes necessary. Annual or semi-annual performance reviews create structured moments for discussing achievements, areas for improvement, and career development. Written performance documentation demonstrates fair treatment and proper management should employment relationships deteriorate requiring termination.

Employee retention becomes increasingly important as businesses mature and training investments accumulate. Beyond competitive compensation, retention factors include career advancement opportunities, skill development through training or challenging work, positive team dynamics and management relationships, and work-life balance through reasonable hours and flexibility. High turnover costs businesses through recruitment expenses, training investments, lost productivity, and knowledge loss, making retention efforts worthwhile investments.

Practical Considerations for Entrepreneurs

Starting with contractors or freelancers before hiring employees allows testing business viability and workflow needs before committing to employment obligations. Contractor relationships provide flexibility for early-stage businesses with uncertain revenue or workload. Once business stabilizes and workload justifies full-time dedication, converting successful contractors to employees creates continuity while formalizing relationships under proper legal framework.

Hiring remote employees expands talent access beyond Tbilisi or other major cities into regions with lower living costs potentially accepting lower salaries. Remote work arrangements require clear communication protocols, project management systems, and periodic in-person meetings maintaining team cohesion. Digital tools enable effective remote management though entrepreneurs should ensure remote arrangements suit both business model and specific roles before committing.

Professional employer organizations and HR consulting services support entrepreneurs without internal HR expertise. These services handle payroll processing, compliance monitoring, contract drafting, and HR administration for reasonable fees. Entrepreneurs focused on core business activities rather than administrative functions benefit from outsourcing HR operations, ensuring compliance and professionalism while freeing time for revenue-generating activities and business development.