Introduction to Payroll in Armenia
If you’re putting together a remote team in Armenia, there are important steps to take to make sure your salary payments are accurate and timely while staying compliant with labor laws.
Skuad can help you with payroll outsourcing in Armenia. We'll cover everything, including salary, benefits, employer and employee contributions, and payroll compliance in Armenia as well.
For payroll solutions, get help from Skuad to stay fully compliant. Skuad’s in-country legal experts keep track of Armenian laws and changes to legislation, and help you pay your employees their benefits due to them by law.
Payroll Process in Armenia
Payroll processing in Armenia consists of three phases: the pre-payroll phase, the payroll calculations phase, and the post-payroll phase.
During the pre-payroll phase, you’ll set up your organization, communicate your policies such as leave policies, communicate salaries and pay frequency to your employees, and get ready to pay their salaries and benefits due to them by law.
Setting up the organization
Your work culture is unique. Let your employees know where you stand on your policies such as vacation time, personal time off, sick leave, and attendance.
Make sure your company is registered in Armenia and you have all the necessary ID numbers for taxes.
Requirements may differ regionally or locally within Armenia. You may have remote workers throughout Armenia and your policies may be different depending on the area.
Employees are entitled by law to some leave in Armenia, including sick leave and maternity leave. Let all your employees know what kind of leave they are entitled to and let them know about your vacation and other leave scheduling policies.
Biometric devices may help record hours worked remotely. Let your employees know about asking a supervisor for time off, filling in time sheets, and how their hours will be tracked for their pay.
All labor laws must be obeyed in both your country as well as Armenia to remain on a good legal footing. Decide which benefits and perks you will offer in addition to any benefits mandated by labor legislation. Payroll solutions in Armenia such as Skuad can ensure you comply with Armenian laws.
Design your salary components to follow your organization’s policies to make sure your employees are paid salary, allowances, and reimbursements. Design flexible benefit plans as well.
The payroll frequency in Armenia is monthly, usually paid on the 15th day of the next month. Decide on which day is payday and make sure everyone in the organization knows the pay date so they can plan accordingly.
Make sure all employee information is correct such as their full names and departments to get ready for payroll.
Payroll Calculation Phase
The payroll calculation phase is the main component of payroll in Armenia. Raw data from the pre-payroll phase is fed into a system to calculate paychecks. The result is the salary paid after deductions, taxes, and withholding.
Paying employee salaries is the main part of the post-payroll phase. If you don’t use software that has a direct deposit option, you’ll send your bank advice to disburse salary payments.
Since payroll is a large expense for your business, you’ll want to make sure all salary payments are recorded as part of maintaining your company’s accounts.
Payroll reporting and compliance
Employer and employee contributions and statutory deductions are withdrawn and sent to government agencies by their due dates. To make sure you comply with laws, get a Skuad demo today.
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Payroll Processing in Armenia
If you’re looking to outsource payroll in Armenia, contact Skuad for our services to make payroll easier for your organization.
Payroll Processing Company in Armenia
Expand and grow your company and let Skuad take care of payroll processing for you. Contact us today to see how you can get started.
Payroll Management in Armenia
Payroll management is maintaining financial records and complying with labor legislation. This means recording net and gross salaries, and generating payslips, and incentives for a specified timeline.
Payroll Compliance in Armenia
Managing payroll means paying employees while complying with labor laws. Taxes, leave, benefits, and other components are mandatory by law. If you partner with a payroll company in Armenia like Skuad, all of the compliance is taken care of by professionals.
Payroll Components in Armenia
The following are the components of payroll specifically for Armenia.
Armenia has a minimum wage of 66,140 Armenian drams (AMD), roughly US $140. The current currency exchange rate as of May 2022 is 1 Armenian dram equals US $0.0023.
The working week in Armenia is generally no more than 40 hours and eight hours per day according to the Republic of Armenia, RA Labor Code. The maximum amount of work that can be done in one day, including overtime, is 12 hours.
Hours worked beyond normal working hours are paid as 150% of the regular salary. For each hour of work done at nighttime, the pay must be 130% of the usual salary.
Employees contribute to a pension fund.
- If the employee earns less than 500,000 AMD in a year, the payment is 4.5%.
- For earners who make more than 500,000 AMD per year, there is a 10% contribution. The total payment does not exceed 27,500 AMD.
Employees who get sick receive employer-paid time off from the second day of sick leave to the sixth day. Social Insurance pays after the sixth day. These benefits are due to the employee up to the 120 sick day or 140 days in a given year.
Armenian employees are entitled to 140 days of maternity leave, half of which is before childbirth and half after childbirth. In cases of complicated childbirth, the leave is extended to 155 days, 85 of which will be after the delivery. Multiple births entitle the employee to 180 days, with 70 taken before childbirth and up to 110 days following delivery.
Fathers can take five days off in the first thirty days following childbirth.
Once an employee has worked six continuous months for an employer, they are entitled to annual leave. The amount of time an employee can take per year is based on how many days per week they work.
- Employees working five days a week are entitled to 20 days of annual leave.
- Employees working six days a week are entitled to 24 days of annual leave.
Working in dangerous or stressful conditions entitles employees to more leave.
- Employees working five days a week in high-risk conditions are entitled to 35 days of annual leave.
- Employees working six days a week in high-risk conditions are entitled to 42 days of annual leave.
There are 16 annual public holidays in Armenia; some are observed for multiple days.
National holidays in Armenia:
- New Year Holiday, January 1 to 4
- Armenian Christmas Holiday, January 6 to 7
- National Army Day
- International Women's Day
- Easter Monday
- Armenian Remembrance Day
- Labor Day
- Victory and Peace Day
- 1st Republic Day
- Constitution Day
- Independence Day
- New Year's Eve
Payroll Taxes in Armenia
Payroll tax in Armenia will be a big part of your payroll costs. The Armenia corporate tax rate is a flat tax rate of 18%.
Employees will pay a flat rate on their income of 21%.
Probation periods are typically three months. If either party wishes to terminate the contract within that time, they can do so with three days’ notice. Employers must have a reason, or cause, for termination and must provide the employee notice.
The notice period required depends on the length of employment with the employer:
- 14 days’ notice: Less than a year of employment.
- 35 days’ notice: One to five years of employment.
- 42 days’ notice: Five to 10 years of employment.
- 60 days’ notice: More than 10 years of employment.
Severance pay is due in some cases. If the employee is terminated for a company reason, if the number of employees is reduced, or if the company is bankrupt, the severance pay is equal to a month’s salary.
If the termination of an employee is employee-related rather than company-related, for instance, old age, disability, or they get drafted into the military, the severance due will be based on their length of employment:
- 10 times daily salary: Less than a year of employment.
- 25 times daily salary: One to five years of employment.
- 30 times daily salary: Five to 10 years of employment.
- 35 times daily salary: 10 to 15 years of employment.
- 44 times daily salary: More than 15 years of employment.
Employers must provide three days of unpaid bereavement leave for an employee’s family member’s funeral.
If an employee gets married, they are entitled to three days of unpaid leave for their wedding.
Using a payroll company in Armenia can help you take care of all components of payroll.
Payroll services in Armenia can be simplified with the correct management system. Contact Skuad and ask for a demo today if you’re ready to:
- Set up your remote team
- Stay compliant with labor laws
- Save time and money
Take care of payroll, taxes, and compliance with Skuad.