A salary offer should tell both sides the same story. Agree the gross amount, calculate the employee’s net pay and budget the full employer cost before the first payday.
Start with gross pay, net pay and employer cost
The ordinary Georgian income-tax rate on salary is 20%. For employees participating in the funded pension scheme, the standard contributions include 2% from the employee and 2% from the employer. The employer’s contribution sits on top of the gross salary.
Check pension participation for each employee using the applicable personal status and scheme rules. Record whether the employment offer is gross or net, how bonuses are calculated and which benefits the employer provides. A clear offer avoids a surprise when the first payslip arrives.
| Illustration: ordinary 2,000 GEL gross salary, pension participant | GEL |
|---|---|
| Gross salary | 2,000.00 |
| Income tax at 20% | 400.00 |
| Employee pension contribution at 2% | 40.00 |
| Net salary paid to the employee | 1,560.00 |
| Employer pension contribution at 2% | 40.00 |
| Total employer salary cost | 2,040.00 |
The example uses the ordinary salary rate and a participating employee. Approved special regimes, including International Company status, have their own employment-income treatment.
Give payroll a reliable monthly routine
The payroll file should include new starters, agreed salaries, hours or attendance where relevant, bonuses, leave, benefits and departures. Reconcile the payroll register with the actual bank payments and the amounts declared to the Revenue Service.
Set a date for managers to approve changes before payday. This gives the accounting team time to resolve missing information and issue consistent calculations. Keep the employment agreement, amendments, payslips and payment evidence together.
Connect payroll with the 2026 foreign-worker rules
For a foreign hire, establish the employee’s immigration and work position alongside the employment contract. The labour migration framework effective from 1 March 2026 introduced a right-to-work process for covered foreign workers and self-employed foreigners.
Keep identity, residence and work-permission records current and record where the work is performed. We coordinate the Georgian payroll questions with the employment registration work, so the salary file and the legal file agree.
Pay people according to the relationship they have
An employee, an independent contractor and a shareholder receive money for different reasons. Review the actual duties, supervision, hours and commercial arrangements when deciding how to document the payment. Consistent contracts and payroll records give the business a much clearer position.
Agree a net offer with a full employer-cost calculation
If a participating employee is promised a net salary, reverse the calculation before making the offer. Under the ordinary 20% income-tax and 2% employee-pension example, net pay is 78% of gross pay. The employer’s own 2% pension contribution is added to the gross amount.
| Salary term | Gross pay | Income tax | Employee pension | Net pay | Employer cost |
|---|---|---|---|---|---|
| 2,000 GEL gross | 2,000.00 | 400.00 | 40.00 | 1,560.00 | 2,040.00 |
| 2,000 GEL net | 2,564.10 | 512.82 | 51.28 | 2,000.00 | 2,615.38 |
All amounts are GEL, rounded to two decimal places. These examples assume ordinary salary taxation and pension participation. Confirm each employee’s scheme position and any approved special tax treatment before using the calculation.
Keep changes in one approved monthly register
Record each starter, leaver, salary change, bonus, leave item and taxable benefit before the payroll cut-off. Identify the effective date and approval. Send the final register to the accountant once, then record any later correction explicitly so two versions cannot be mistaken for the approved payroll.
Reconcile the calculated net pay with bank payments and the tax and pension amounts with their reporting records. If a payment is made outside the usual salary run, identify what it relates to and include it in the review for the appropriate period.
Review contractor and shareholder payments before adding them
A contractor invoice should reflect a genuine independent-service relationship. A shareholder transfer may be a dividend, loan movement or reimbursement. Review the actual agreement and conduct rather than placing every payment to an individual into the same category. Clear classification helps the company keep payroll, supplier and owner balances accurate.
Build a payroll budget for your team
Tell Kristine the number of employees, proposed salaries, citizenship and residence details, and the intended start date. We can prepare the payroll calculation and the monthly reporting arrangements.
Request a consultationFrequently asked questions
What is the difference between gross salary and employer cost?
Gross salary is the employee’s amount before deductions. Employer cost also includes the employer’s own contributions, such as the standard 2% pension contribution for a participating employee.
What information should reach the accountant before payday?
Provide approved starters and departures, salary changes, bonuses, benefits, leave and the relevant employee records before the payroll calculation is finalised.
Legal basis: Tax Code of Georgia salary provisions; Law of Georgia on Funded Pensions; Law on Labour Migration for covered foreign workers.