Employer of Record (EOR) in Armenia

An EOR in Armenia allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment from payroll processing to compliant administration.

Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in Armenia.

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Quick Overview of EOR in Armenia

Expanding into Armenia doesn't have to mean drowning in paperwork or hefty setup costs. With an Employer of Record (EOR), you can bypass the complexities of local regulations and quickly hire employees, all while maintaining compliance with Armenia's labor laws. From payroll processing and tax compliance to benefits management, an EOR takes care of the legal nitty-gritty like mandatory written contracts and social security contributions, so you can focus on growing your business without the need to set up a costly local entity.

The EOR model offers a low-risk, cost-effective alternative to setting up a subsidiary. Establishing a local entity in Armenia can cost anywhere from USD 2,000 to USD 5,000 plus the cost of maintaining human resources (HR), legal assistance, accountants and more. It can also become highly administrative. By partnering with an EOR, you can avoid these setup costs and enter the market faster, avoiding the overhead of a physical office. This is especially beneficial for startups, SMEs, and businesses testing new markets, who need to act quickly and comply with complex local regulations.

Disclaimer: The contents of this article is not legal advice and should be used for reference only. If in doubt, please seek independent legal advice from a lawyer in the relevant jurisdiction.

What You'll Learn

  • Looking to hire in Armenia without the hassle and administrative burden of setting up a local entity? An EOR helps you onboard employees while maintaining compliance with payroll and local labor laws.

  • With a Direct EOR, you gain control, faster onboarding, and stronger compliance. It is ideal for businesses aiming to scale quickly.

  • On the other hand, an Indirect EOR may be more cost-effective but comes with slower processes and added complexity.

  • EOR service fees typically range from USD 300 to USD 800 per employee per month.

  • Atlas HXM offers a robust Direct EOR solution, providing smooth market entry, compliance, and seamless employee management: all in one platform.

How an EOR Works

At Atlas HXM, we provide EOR services that ensure your business remains compliant with Armenia's labor laws while you focus on growing your operations, free from administrative and legal burdens.

Candidate Selection

Atlas HXM does not recruit candidates, but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against Armenian rules, and configuring payroll and statutory obligations correctly.

Employment Contracts

Atlas HXM drafts and administers employment contracts in compliance with the Armenian Labor Code. All contracts must be written and include mandatory elements such as:

  • Job title and responsibilities

  • Salary, benefits, and working hours (maximum 40 hours per week)

  • Leave entitlements and notice periods

  • Probationary period terms (maximum 3 months)

Payroll & Benefits Management

Payroll is processed in Armenian Drams (AMD), including:

  • Accurate tax withholdings at 20% personal income tax rate

  • Social security contributions and mandatory benefits

  • Minimum wage compliance (AMD 75,000 per month)

The EOR also helps maintain compliance with mandatory benefits, so employees are protected under Armenia's laws.

Work Permit Compliance

Atlas HXM assists with work permit applications for foreign nationals, coordinating with Armenian authorities to ensure proper temporary residence permits and work authorization are obtained through the employer.

Ongoing HR Support

Provides HR support, including: Leave management (minimum 20-24 working days annually) and performance tracking, employee relations, and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.

Costs & Pricing

EOR services in Armenia are typically billed as a platform/service fee in the range of USD 300–800 per employee per month. This fee covers administration such as compliant contracts, payroll processing, statutory filings, and HR administration. This service fee is separate from the employee's salary, benefits, taxes, and permit-related costs, which vary by role and jurisdiction. By using an EOR, companies avoid the cost and overhead of setting up an Armenian entity, which can require USD 2,000–5,000 upfront before any operational spend, plus ongoing compliance costs of USD 1,000–3,000 monthly.

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What to Choose: EOR vs PEO

EOR

Employer of Record

An EOR becomes the legal employer for your talent in a country where you do not have an entity. The EOR carries employer liability and handles compliant contracts, payroll, statutory benefits, tax filings, and labour-law adherence. You still direct the employee's work. This model suits companies expanding into Armenia without wanting to form a local entity or take on compliance risk.

PEO

Professional Employer Organization

A PEO provides outsourced HR services like payroll, benefits, HR admin, but only when you already have a local entity. You remain the legal employer, and the PEO shares administrative tasks without taking on employer liability. Suitable when you are already established in the country and are only looking to offload HR administration.

What’s Best for You?

  • Choose an EOR when you want to hire in Armenia without setting up an entity and want a partner who absorbs employer risk.

  • Choose a PEO when you already operate locally and just want HR support.

Work Life in Armenia

Armenia's employment framework is designed to balance operational needs with employee protections. Here's what you need to know:

Employment Types:

  • Permanent: Ongoing employment with full statutory benefits.

  • Fixed-Term: Hired for a specific project or defined duration, with clear contract expiry dates.

  • Temporary: Short-term assignments up to 2 months; entitled to statutory benefits like leave and overtime.

Probation Periods: Maximum 3 months (6 months in special circumstances) and must be outlined in the employment contract. These periods allow employers to assess employee suitability before offering permanent employment. Either party can terminate with 3 days' written notice during probation, and the EOR ensures that all terms comply with the Armenian Labor Code.

Working Hours & Overtime: In Armenia, the standard workweek is 40 hours, with a maximum of 8 hours per day. Employees must receive a break of 30 minutes to 2 hours after working 4 hours. Overtime is paid at 1.5x the basic hourly rate (50% premium), limited to 4 hours in 2 consecutive days and 180 hours per year, and the EOR ensures that all overtime is calculated correctly and that employee work hours comply with local regulations.

Leave Entitlements

Leave Type

Eligibility / Duration

Payment / Notes

Annual Leave

20 days (5-day week) or 24 days (6-day week) after 6 months

Paid by employer; enhanced leave for hazardous roles

Maternity Leave

140 days (70 before, 70 after delivery)

100% of daily average wage paid by employer

Paternity Leave

5 days within 30 days of childbirth

Paid at average daily salary

Sick Leave

Up to 120 successive days or 140 total days per year

80% pay for first 5 days (employer), then social insurance

Public Holidays

All statutory holidays

Paid; double rate if required to work

Vacation Leave

As per statutory minimum

Paid; unused leave paid out upon termination

Payroll & Benefits: Wages must meet minimum wage requirements (AMD 75,000 monthly), with Atlas HXM managing payroll in AMD, social security contributions, statutory benefits, bonuses, and any supplemental insurance. Additional benefits can include private health insurance, transportation allowances, and professional development options.

Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with Armenia's labor laws while businesses can focus on operations without administrative burdens.

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What to Choose: Indirect vs Direct EOR

Direct EOR

The EOR owns the legal entities in the target country, coordinating all employment-related tasks directly. It offers faster onboarding, better compliance, and more control.

Best for: Businesses looking to scale quickly, expand long-term, or enter Armenia with compliance.

Indirect EOR

The EOR provider acts as an intermediary between the business and a third-party local entity. While it can be cheaper, it may result in delays and compliance complexity.

Best for: Small teams or short-term hires with less urgent compliance needs.

What’s Best for You?

  • For Small Teams or Contractors: Indirect EOR could work, especially for temporary hires or testing a market.

  • For Scaling and Compliance: Direct EOR is the best choice. With Atlas HXM, you'll have control, faster entry, and streamlined compliance.

Taxes & Compliance

Armenia operates on a calendar-year tax system, running from January 1 to December 31. Employers must remit personal income tax withheld from employee salaries by the 20th of the following month, submit social security contributions by the same deadline, and file annual tax returns by March 31st. Monthly reports detailing amounts withheld and paid for each employee are also required.

Category

Details

Employer Payroll Tax

Social security contributions: 15%–20% of gross salary; Occupational injury insurance: rates vary by industry; Additional mandatory contributions as required by law

Employee Payroll Tax

Residents: flat 20% personal income tax on gross income; Non-residents: 20% on Armenian-source income; Employee social security contributions: percentage of gross salary

Pension System

Mixed system: basic pension (state-funded) + work pension (service-based); Retirement age: 63 with 10+ years experience (62 with 35+ years); Early retirement at 55 for hazardous occupations (15+ years); Minimum pension: AMD 36,000

VAT & EOR Costs: Armenia applies a 20% Value Added Tax on most services. EOR services may be subject to VAT depending on the service structure and provider's tax status. Businesses should clarify VAT treatment when engaging EOR services to ensure proper budgeting and compliance.

Atlas HXM handles tax compliance, including flat 20% income tax calculations, social security contributions, annual filings, and any complex tax situations, ensuring businesses remain compliant with local laws while minimizing administrative burden.

Termination

Employees must give written notice for termination, with statutory notice periods varying by tenure and termination reason. For organizational changes (liquidation, restructuring), all employees receive 2 months' notice. For individual terminations, notice ranges from 14 days (under 1 year service) to 60 days (15+ years service). Probationary employees require only 3 days' notice. Severance pay varies from 10 days to 44 days of average salary based on tenure, with one month's salary for organizational terminations. The EOR helps ensure proper handling of terminations, including notice periods, final wages, and required documentation.

Visas & Work Permits

In Armenia, foreign nationals must hold valid work authorization through a temporary residence permit and work permit obtained through their employer. Entry visas can be single or multiple entry with varying durations (21-120 days stay).

Atlas HXM assists with Work Permit applications, coordinating with Armenian authorities to secure temporary residence permits and work permits. The process involves the employer submitting applications to obtain temporary residence permits, after which employees can apply for work permits with the Ministry of Labor and Social Affairs.

5 Things to Look for in an EOR Provider in Armenia

  1. Local expertise and knowledge of Armenian Labor Code, social security contributions, and Ministry of Labor requirements.

  2. Advanced technology for payroll, reporting, and HR system integration with Armenian language support.

  3. Experience in your industry and handling work permit management for foreign nationals.

  4. Strong compliance track record and relationships with Armenian government agencies and legal advisors.

  5. Global presence to support multi-country expansion, with verified security and compliance standards (ISO 27001/27017/27018, GDPR).

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Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Our unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2025, Atlas HXM combines compliance, technology, and global expertise.

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FAQs

What is the minimum wage in Armenia?

The current minimum wage is AMD 75,000 per month, or AMD 450 per hour for a 40-hour work week, effective from January 1, 2023.

Are employment contracts required to be in writing?

Yes, Armenian Labor Code requires all employment contracts to be made in writing. Oral or implied contracts are not legally recognized.

What is the typical probation period?

Maximum 3 months (6 months in special circumstances) and must be in the employment contract.

How much notice is required for termination?

Notice depends on tenure and reason: 14 days (under 1 year) to 60 days (15+ years), or 2 months for organizational changes.

What are the annual leave entitlements?

Minimum 20 working days (5-day week) or 24 working days (6-day week) after 6 months of service.

Can employees work overtime without limits in Armenia?

Overtime is regulated with 50% premium pay, limited to 4 hours in 2 consecutive days and 180 hours per year.

         

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