Payroll and Benefits Guide Armenia

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee Income Tax

General

Payroll Cycle

General

Working Week

Monday-Friday

Paid Time Off

The minimum days of paid annual leave are based on the working week. If an employee works five days a week, they will be entitled to 20 working days annual leave; however, if an employee works six days a week, they receive 24 working days annual leave.

The annual leave cycle is based on the individual worker’s start date not from a fixed calendar month such as January to December. It is permitted to a carryover policy for unused leave.

Should employees work in stressful or high-risk conditions, the number of days of annual leave increases. Employees who work a five-day working week would receive an annual leave entitlement of up to 35 days in exceptional conditions. Those who work a six-day working week are entitled to up to 42 days of annual leave in extraordinary circumstances.
Generally, employees can access annual leave after six months of continuous work.

Public Holidays

There are 16 public holidays in 2023. Public holidays falling on the weekend are usually lost.

Sick Days

Termination Process

Termination Process

Employers must have a valid reason to terminate an employee and must provide notice before doing so. The notice period is generally linked to the length of employment with the company.

Notice Period

The notice periods are as below:

An employee gives 30 days’ notice to resign unless a collective agreement outlines a longer period.

• For the employer, during the probation period, only 3 days’ notice is required
• For service of less than 1 year, 14 days’ notice is required
• Between 1- and 5 years of service, 35 days’ notice
• After 5 to 10 years of service, 42 days’ notice
• More than 10 years of service, 60 days’ notice

Severance Pay

The reason for termination determines the severance pay should it be company related (i.e., the company is liquidated, the number of employees is reduced, or the employee is rehired in a previous job) the severance pay will be equal to the employee’s average monthly salary. Should the termination be employee-related, (i.e., long-term disability, old age, significant changes in working conditions, or an employee is called up for compulsory Military Service) the employee’s employment length will determine the severance pay as below:

fewer than 12 months of employment service – 10x average daily salary
Between 1- and 5 years of employment service –  25x average daily salary
Between 5 to 10 years of employment service –  30x average daily salary
Between 10 to 15 years of employment service –  35x average daily salary
More than 15 years of employment service –  44x average daily salary

Probation Period

Probationary periods are generally three months and will be referenced in the employee’s contract of employment. Should either the employee or the employer wish to terminate before the three-month probation period, either may terminate the employment contract with three days’ notice.

VISA

Individuals entering Armenia for business must obtain a work permit sponsored by their employer to work in Armenia legally.
Generally, a holder of an Armenian visa is not entitled to work in Armenia unless they also hold a work permit. However, some highly skilled foreign specialists, business owners, executives, and other workers are exempt from the work permit requirement.

Unless a foreign individual is exempt from the work permit requirement, the employer must first obtain a work permit by applying to the Ministry of Labor and Social Affairs (MLSA) before the employee starts their employment.

The MLSA tests the Armenian market to ensure that there are no qualified and available Armenian workers to fill the position internally. When a work permit is granted, the foreign national can start working in Armenia, but it does have a fixed term and is renewable on request.

After obtaining the work permit, the foreign national must file an application for a temporary residence permit at the Passport and Visa Department of the Police in Yerevan. The application must be accompanied by the requested supporting documentation, including medical test results. The temporary residence card is issued within approximately 30-45 days of the application date if accepted.

Specific individuals may qualify for temporary residence in Armenia, including those entering on a contractual basis, international students, journalists, and researchers. Temporary residence is granted for one year and can be extended for a maximum of one additional year.

General

The general rate of VAT in Armenia is 20%.