Employer of Record in Andorra: A Complete Guide for 2026

Introduction

Managing employment in Andorra requires careful attention to local compliance from the first day of work. Employment contracts must be written in Catalan, salaries are paid in euros, CASS (Social Security Fund of Andorra) social security contributions must be handled monthly, IRPF withholding must be calculated correctly, and statutory leave and overtime rules must be followed. Setting up a local entity to manage these requirements can delay hiring before the first employee is onboarded.

An employer of record in Andorra helps remove that complexity. The EOR acts as the legal employer and manages employment contracts, payroll, social security contributions, and ongoing compliance, while your company directs the employee’s day-to-day work.

This guide covers how an EOR works in Andorra, what it costs, and what to get right before your first hire.

Andorra at a glance

Population: 83,783 people

Currency: Euro

Capital city: Andorra la Vella

Languages spoken: Catalan, Spanish, French, Portuguese

GDP: $4.04 billion USD

Employment in Andorra

The Andorran labor legislation applies to visiting foreigners and foreigners with active residency. To understand the nuances involved, we must comprehend the essential aspects of the Andorran law. This way, it will be easier to eliminate unnecessary confusion and complications.

Andorra's employment rules sit under Law 31/2018, which requires written contracts in Catalan, monthly CASS contributions, IRPF (Personal Income Tax) withholding, and specific leave and overtime entitlements, and they apply to foreign hires from the moment they start work. Keeping all of that straight is the hard part for a company without a local HR team.

Skuad helps you stay on top of it from a single platform, acting as the legal employer so your team does not have to track every filing deadline or rule change on its own.

Here is what Skuad helps with:

• Acts as the legal employer across 160+ countries, so you can onboard staff without setting up a local entity
• Supports employment contract generation aligned with local labor laws and statutory requirements across supported markets
• Helps administer statutory leave, overtime, and parental entitlements in line with local rules
• Facilitates statutory contribution and tax withholding workflows across supported markets
• Centralizes employee records, contracts, time off, and documents on one dashboard
• Helps keep your team aligned with compliance requirements as local labor rules change

For a foreign employer, that means you can hire in Andorra and keep the ongoing HR and compliance running without building a local team to manage it.

Book a demo to see how Skuad manages Andorra employment compliance end-to-end.

Contractors vs full-time employees

Whether you bring someone on as a contractor or a full-time employee in Andorra, the law requires a written contract in Catalan with pay stated in Euros, and the classification you choose carries real consequences for benefits, social security, and termination notice. Getting that call wrong is where misclassification risk starts.

Skuad supports both hiring models from a single platform:

EOR for full-time employees:

• EOR for full-time employees acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Supports employment contract generation aligned with local labor laws and statutory requirements across supported markets
• Facilitates statutory contribution workflows covering applicable social security and pension obligations
• Supports payroll processing in 70+ currencies with automated tax withholding and statutory deductions
• Helps administer statutory benefits, paid leave, and parental entitlements in line with local requirements
• Assists with termination and offboarding, including notice periods and severance as required locally

Contractor management:

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing
• Helps flag classification risk before it becomes a compliance issue with built-in worker classification checks
• Facilitates payouts across 70+ currencies with no manual reconciliation
• Helps manage contractor records, contracts, and payment history from one dashboard alongside full-time employees

Full-time or contractor, Skuad supports both in Andorra. See pricing

Hiring in Andorra

How to hire employees in Andorra

• Hire through direct employment, recruitment support, or an Employer of Record.
• Direct employment may require a local entity and payroll setup.
• Employers must register employees with CASS for social security contributions.
• Employment contracts should clearly define role, pay, working hours, leave, and termination terms.

What do employers need to manage?

• Follow Andorran labor rules for contracts, payroll, working hours, and statutory leave.
• Manage social security contributions through CASS.
• Maintain accurate employee records and payroll documentation.
• Ensure foreign employees have the right work authorization before employment starts.

How does an EOR support hiring?

• Let companies hire in Andorra without setting up a local entity.
• Manages employment documentation, onboarding, payroll, and statutory contributions.
• Supports benefits administration and compliance workflows.
• Allows your team to manage daily work while the EOR handles local employment administration.

Probation and termination

Probation and termination activities are regulated and defined under Andorra's employment compliance laws.

Probation period

The general probation period in Andorra cannot exceed two months. There are two exceptions tied to pay: if the agreed salary is equal to or greater than three times the minimum wage, probation can run up to three months, and if it is equal to or greater than five times the minimum wage, up to six months.

A collective agreement can set different terms. In all cases, the probation period must be recorded in the contract, and employment contracts must be in writing. These rules apply to employees on any type of employment contract, not to independent contractors.

Termination of service

A non-causal dismissal requires advance notice of 12 days per year worked (roughly one day per month of service), capped at 30 days, plus severance of 25 days' salary per year worked, capped at 365 days.

Objective dismissals follow similar notice rules with reduced severance, while a disciplinary dismissal for serious misconduct requires no notice or severance. A contract ends in the following circumstances:

• Mutual agreement
• Expiry of the term or completion of the work
• The employee reaching retirement age
• Death or total permanent incapacity of the employee
• The employee is being deprived of liberty by a final sentence
• Bankruptcy of the employer
• Force majeure or a legal cause that makes continuing the business impossible
• Elimination of roles for economic, technical, organizational, or production reasons

Employer of Record in Andorra

Hiring employees in Andorra requires employers to manage local employment contracts, payroll, CASS social security registration, statutory benefits, and work authorization requirements for foreign workers. For companies that want to hire in Andorra without setting up a local entity first, an Employer of Record can provide a faster and more practical route to market.

An Employer of Record, or EOR, acts as the legal employer for your Andorra-based employees. The EOR supports employment documentation, onboarding, payroll, statutory contributions, benefits administration, and compliance workflows, while your company continues to manage the employee’s day-to-day work.

Benefits of using an EOR in Andorra

• Compliance Support: An EOR helps companies follow Andorran employment, payroll, social security, and work authorization requirements.
• Time and Cost Savings: Setting up a local entity can take time and add administrative work before hiring begins. An EOR helps reduce that setup burden.
• Faster Hiring: EORs can support employees onboarding, contract generation, payroll setup, and statutory contribution workflows.
• Local Employment Administration: Companies can focus on business operations while the EOR manages local HR, payroll, and compliance processes.

For companies testing the Andorran market or hiring a small team, an EOR can help reduce the operational effort involved in entity setup, local payroll management, employee documentation, taxation, and statutory filings.

Skuad helps remove that dependency. Skuad acts as the legal employer in Andorra, so your company can hire, onboard, and pay employees without setting up a local entity or building in-house payroll infrastructure.

Book a demo to see how Skuad can support your first Andorra hire with onboarding, payroll, and compliance workflows.

Types of visas in Andorra

Work authorization and residency permits are required for foreign nationals who want to work, live, and earn a salary in Andorra. Andorra does not have its own airport and is accessed through Spain or France, so some travelers may also need a multiple-entry Schengen visa depending on their nationality.

The main visa and residency routes include short-stay entry, active residency, passive residency, and seasonal work permits.

The list of common documents for Andorra work authorization or residency may include:

• Valid passport
• Completed application form
• Employment contract or job offer
• Proof of accommodation in Andorra
• Criminal record certificate
• Medical certificate, where required
• Passport-size photographs
• Proof of qualifications or professional experience, if applicable
• Employer documentation supporting the work permit or residency request
• Proof of financial resources for passive residency applicants

The process of applying for work authorization or residency in Andorra usually includes:

• Confirm whether the employee needs a Schengen visa to enter through Spain or France.
• Identify the correct route, such as active residency, passive residency, or seasonal work authorization.
• Prepare the required documents, including employment, identity, medical, and background records.
• Submit the application through the relevant Andorran immigration process.
• Wait for approval before the employee begins work or long-term residence in Andorra.
• Complete local registration and employment formalities after approval.

Andorra’s visa and residency process can involve multiple steps, especially for foreign employees who need both entry clearance through the Schengen Area and local work authorization. Employers also need to account for permit availability, employment documentation, and immigration timelines before confirming a start date.

Skuad’s global immigration support helps with the work permit process on your behalf, including:

• Supporting work permit and residency application coordination for foreign employees
• Helping track required visa, residency, and employment documents
• Supporting documentation collection for employment-based hiring
• Helping teams stay aligned with local immigration and compliance requirements
• Supporting onboarding steps once the employee is authorized to work in Andorra

Work permits

Employers who wish to hire a workforce for their unit in Andorra need to apply for a work permit in Andorra. The requirements for a work permit are:

Payroll and taxes in Andorra

Payroll in Andorra

Andorran payrolls require contracts to be in place. This is done to ensure compliance with the legal necessities and formalities. An important factor for Andorra to be an investment hub is its tax policy. Tax rates are meager, and tax brackets range only from zero to 10%. This further eases the process for payroll establishment. Payrolls can be set up either through a subsidiary in Andorra or a global EOR.

Taxes in Andorra

Andorra is known for its regulations regarding taxes. The tax advantages in Andorra include its corporate tax, low value-added tax, lack of sales tax, and low personal income tax.

Income tax rates for residents

The general personal income tax rate is 10%. This tax is called Impost sobre la renda de les persones físiques (IRPF) in Catalan, and it applies to three bands:

• €0 to €24,000: 0%
• €24,001 to €40,000: 5%
• Over €40,000: 10%

Where one spouse has no income, the €24,000 exempt threshold can be extended up to €40,000 through a reduction to the general base, so single-earner couples pay nothing up to that higher figure.

This applies to salaries and pension income, which sit in the general base. Savings and investment income (interest, dividends, and capital gains) are taxed separately: the first €3,000 is exempt, and the rest is taxed at a flat 10%. Reductions are available for dependents and for the primary residence, among others.

Value added tax(VAT)

VAT is at its lowest in this European country. The VAT rate is called “impost general indirecte.” The general VAT applied in Andorra is 4.5%. However, there are several exceptions to it as listed below.

IGI is imposed at different rates for the following:

• Banking and financial services: 9.5%
• Books, magazines, and newspapers: 1%
• Basic food and drink: 1%
• Culture and art: 2.5%
• Tourism and transport: 2.5%

Tax returns

IRPF returns must be filed by individuals who meet the residency and income criteria. The filing period is between April 1 and September 30 of the following year.

Financial year end date

The tax year ends on December 31.

Employer social security and statutory contributions

The total CASS contribution for an employee is 22% of gross salary. This is split between the employer and employee as follows:

• Employer contribution: 15.5%
• Employee contribution: 6.5%

Incorporation: How to set up a subsidiary in Andorra

When you think of expanding your business to Andorra, you must consider two factors: the city/region of the business and the type of entity. It is advisable for companies working in the long term to set up their subsidiary as a limited liability company. The process involves the following steps.

• Registering the company’s name
• Authorizing incorporation
• Holding a business bank account
• Depositing minimum share capital
• Petitioning the deed of incorporation
• Registering at the Trade Register of Andorra
• Requesting a Tax Identification Number for the company

An excellent grasp of Andorran subsidiary and municipal laws is mandatory to help the subsidiary run effectively. Skuad’s role is to operate as a platform to supervise, manage, and simplify this process.

See how Skuad helps you hire in Andorra without an entity

Professional Employer Organization (PEO)

According to the definition provided by the National Association of Professional Employer Organizations (NAPEO), Professional Employer Organizations (PEOs) allow their clients to outsource the handling of HR, employee-related benefits, taxation, probation, hiring, and payroll. PEOs furnish a pathway for HR-centered decision-making processes. However, an EOR company furnishes a flexible path for outsourcing HR teams.

The biggest advantage of an EOR organization is that it provides for a diversified workforce from countries all around the globe without the hassle of registration complexities according to local laws. Besides, an EOR service dispenses general liability, workers’ compensation, and insurance coverage. These are factors not dealt with by PEOs. Skuad’s self-serve, unified, and automated global HR platform makes the EOR process effortless.

Hire in Andorra without setting up an entity

Skuad supports the operational complexity of hiring in Andorra, including employment contracts, CASS social security contributions, payroll in 70+ currencies, statutory benefits, work authorization support, and compliance workflows, so your team can focus on the work instead of local employment administration.

Companies across SaaS, IT services, finance, tourism, and technology can use Skuad to support their entry into Andorra, stay aligned with local employment requirements, and scale their team without building HR infrastructure from scratch.

Book a demo to see how Skuad hires, pays, and onboards your Andorra team without a local entity.

FAQs

1. What is an employer of record in Andorra?

An employer of record in Andorra legally employs your staff while you manage their work. It registers with CASS, runs payroll, withholds IRPF tax, and issues Catalan contracts under Law 31/2018, so you hire without an Andorran entity.

2. How much does an employer of record in Andorra cost?

EOR pricing in Andorra typically runs $300 to $700 per employee monthly; Skuad starts at $199. On top of that, budget for employer CASS contributions of 15.5% of gross salary, a statutory cost rather than a provider fee.

3. What are the main compliance risks when hiring in Andorra?

The main risks are contracts and classification. Andorra requires written contracts in Catalan with pay in euros, and misclassifying an employee as a contractor can trigger back CASS contributions and penalties. Employers must also register with CASS and withhold IRPF.

4. Is an employer of record better than setting up a company in Andorra?

It depends on scale and speed. Incorporating in Andorra means the trade register, share capital, a deed of incorporation, and a tax ID, taking weeks plus upkeep. An EOR lets you hire in days, usually better for a few hires.

5. How long does it take to hire someone in Andorra through an EOR?

Usually a few days to a couple of weeks once the candidate's documents are ready. For foreign nationals, the work permit adds time: an active residency permit and CASS registration take about two weeks, so non-resident hires move slightly slower.

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