Understanding Georgia's Employer Tax Obligations

Since January 1, 2008, Georgia's Tax Code amendments eliminated the mandatory 20% social tax previously paid by employers. This means companies operating in Georgia are no longer required to pay compulsory social insurance taxes for their employees. The current mandatory social insurance system consists solely of the Funded Pension Scheme (FPS), which operates as a tripartite contribution system involving employees, employers, and the state.

Employer Contribution Breakdown

Employer Tax: 2%

Funded Pension Scheme (FPS): 2%
Voluntary Private Pension (VRP): Varies by specific plan

Georgia's Social Security Framework for Employers

The 2019 Law on Funded Pensions established Georgia's current mandatory social insurance system, applicable to Georgian citizens, foreign citizens with permanent residency, and stateless persons engaged in employment or self-employment activities. All employees are automatically enrolled in the new pension system effective January 1, 2019, except males over 60, females over 55, and self-employed individuals at that time.

Taxable Income (GEL)	Employee Rate	Self-Employed Rate	Employer Rate	State Rate
0 - 24,000	2%	4% (voluntary)	2%	2%
24,001 - 60,000				1%
Over 60,000				0%

The Georgian Pension Agency and Revenue Service oversee social security compliance. Beyond mandatory FPS contributions, many employers provide additional benefits such as disability insurance, accident coverage, and health insurance, though these typically constitute taxable benefits for employees.

Voluntary Private Pension (VRP) Options

Georgia's Voluntary Private Pension system serves as a supplementary retirement savings vehicle, typically employee-driven with optional employer matching contributions. Both individual and collective pension plans are available, with employers or employer unions establishing collective arrangements. Contribution terms must be clearly defined in private pension agreements between employers and employees.

Employee Tax Responsibilities in Georgia

Georgia residents and tax residents must pay income tax on their worldwide earnings, while non-residents are only taxed on Georgian-source income. Employees contribute to national programs primarily through employer-withheld payments deducted directly from salaries.

Employee Tax Breakdown

Employee Tax: 22%

Funded Pension Scheme (FPS): 2%
Voluntary Private Pension (VRP): Case-dependent
Personal Income Tax (PIT): 20%

Employee Social Security Benefits

The Social Service Agency manages Georgia's social security system, which includes employer-mandated contributions plus state pensions, employment subsidies, and social assistance programs.

State Pension Eligibility and Rates

Georgia's standard retirement age is 65 for men and 60 for women. As of 2024, state pensions amount to 315 GEL monthly for beneficiaries under 70, and 415 GEL for those 70 and above. Eligibility extends to Georgian citizens, stateless persons with Georgian identification, and foreign citizens who have maintained permanent residency for at least 10 years.

National Employment Support Programs

Georgia's Employment Promotion Law provides targeted assistance to vulnerable groups through wage subsidies and internship scholarships.

Wage Subsidy Program

Eligible employees registered in Georgia's Labor Market Management Information System can access wage subsidies covering 50% of standard wages (up to 560 GEL monthly) for three months. Qualified candidates include refugees aged 16-29, individuals from low-income families, persons with disabilities, and other designated vulnerable groups.

Internship Scholarship Program

Unemployed individuals participating in state internship programs may receive government scholarships of 200 GEL monthly for up to three months.

Social Assistance Benefits

Georgia provides five primary social assistance benefits:

Maternity allowance: 1,000-2,000 GEL
Child allowance: 100-200 GEL
Low-income family support: 30-200 GEL
Disability allowance: 155-734 GEL
Martyr family support: 100 GEL

Personal Income Tax Structure

Georgia's Tax Code establishes progressive income tax rates ranging from 5% to 20%, with specific provisions for gambling income effective December 2024.

Income Source	Description	Tax Rate
General Income	Standard taxable income for individuals	20%
Residential Rental	Income from residential property leasing	5%
Asset Rental	Income from vehicle or property rentals	5%
Gambling Operations	Income from organizing gambling activities	15%

Taxable Income Categories

Georgia's Income Tax Law defines taxable compensation broadly, including:

Employment Income: All remuneration from current, past, or future employment relationships.

Employer Benefits: The market value of non-cash benefits minus any employee contributions.

Company Vehicle Usage: Personal use of employer-provided vehicles triggers taxable income based on engine capacity.

Engine Capacity	Taxable Amount (GEL)
Over 3,500 cc	300
2,500-3,500 cc	200
Under 2,500 cc	100
Hybrid Vehicles	60

Tax Exemptions and Incentives

Georgia offers various tax exemptions for specific income types, including pension contributions, business expense reimbursements, and certain investment income. The double taxation agreement between Georgia and China provides additional bilateral tax benefits for international businesses.

Georgia Employer Tax Guide 2024: Social Security & Pension Requirements