Income Tax in Georgia: The 20% Rate, Payroll and Pensions

Income tax rate in Georgia: 20% on salary

Article 81(1) of the Tax Code taxes an individual’s taxable income at 20% unless the Code sets another rate, and salary carries that 20%. Your employer is the tax agent under Article 154: it withholds the 20% from your salary and transfers it to the budget when it pays you.

If an employer fails to withhold, Article 154(2) makes it transfer the tax that was not withheld, plus the penalties on it.

Personal income tax rates on other income

The rates below come from Articles 81, 90, 93, 131 and 132 of the Tax Code, with income from outside Georgia under Article 82(1).

Income	Rate	How it is taxed
Salary from a Georgian employer	20%	Withheld by the employer
Royalties paid to a resident individual not registered for VAT	20%	Withheld at source
Interest paid by a Georgian company or other resident	5%	Withheld at source, final for an individual
Interest from a licensed financial institution, such as a bank deposit	None	Not taxed at source
Business income of an individual entrepreneur with small business status	1%, or 3% from the month gross income passes GEL 500,000 in a calendar year	Monthly return by the 15th
A resident individual’s income from outside Georgia	Exempt	Not taxed

Small business status is open only to individual entrepreneurs (Article 88(1)), and its 1% base leaves out salary (Article 90(3)). An entrepreneur who also has a job pays 20% on the salary and 1% on the business income. A dividend from a Georgian company has 5% withheld at source, and for a resident individual that tax is final under Article 130(1) and (3).

Tax residents and non-residents in Georgia

You are a Georgian tax resident for the full tax year once you pass the 183-day test, meaning 183 days or more in Georgia in any continuous 12-calendar-month period ending in that year (Article 34(2)). Any day spent in Georgia counts as a full day, however short the stay (Article 34(5)).

Residency decides what Georgia taxes. A resident pays 20% on Georgian-source salary, and income that is not from a Georgian source is exempt under Article 82(1). A non-resident without a permanent establishment in Georgia is taxed at source with no deductions under Article 134(1): salary for work in Georgia at 20%, dividends and interest at the same 5% as residents, royalties at 5%, and other Georgian-source payments at 10%.

The annual return is for income that was not taxed at source. Residents with such income, and non-residents without a permanent establishment whose Georgian-source income was not taxed at source, file it before 1 April of the following year under the Georgian text of Article 153(1). For tax year 2024 the Revenue Service gave 31 March 2025 as the last day to file and pay, and its list of filers includes individuals who let property where the rent is not taxed at source.

Pension contributions in Georgia: who pays and who is exempt

The funded pension scheme covers Georgian citizens, and foreign citizens and stateless persons with a permanent residence permit in Georgia (Law on Funded Pensions, Article 1(4)). A foreign employee without a permanent residence permit is outside it. Inside it, joining is mandatory for employees, except those who were already 60 (men) or 55 (women) when the law took effect, and voluntary for the self-employed (Article 3(2) and (3)).

The rates are set by Article 3(6) of the Law on Funded Pensions.

Who pays	Rate
Employee, withheld by the employer	2% of taxable salary
Employer, at its own expense	2% of taxable salary
State	2% on the first GEL 24,000 of annual salary, 1% from GEL 24,000 to GEL 60,000, nothing above
Self-employed member who joins	4% of income

The employee’s 2% is exempt from income tax under Article 82(1)(b3) of the Tax Code, so it comes off before the 20% is charged and a member is paid 78.4% of gross salary. The employer pays both 2% shares no later than the day it submits the income declaration, and a self-employed member pays the 4% on the day they file theirs (Article 3(6)). All contributions are made in lari (Article 3(7)).

Payroll tax for employers in Georgia

Anyone working for you under Georgian or foreign labour law does hired work, and so does a company’s director (Article 12(1)). Each employee goes into the register of hired persons that the Revenue Service keeps (Article 12(3)).

On each payday you withhold the 20% and transfer it to the budget (Article 154(3)). By the 15th of the next month you file the return on salaries paid and tax withheld (Article 153(5)).

If you hand payroll to an accountant, check that the monthly package covers the salary return and the pension contributions. Among the Tbilisi accounting firms compared on what each one covers, PB Services Georgia offers HR and payroll outsourcing alongside its accounting service, which covers tax returns and pension returns, and SGA Accounting runs payroll, including salary calculations and tax withholding.

Late filing and late payment are charged separately. Under the Georgian text of Article 274(1), a return up to 2 months late is fined 5% of the tax due on it, and Article 274(2) raises that to 10% beyond 2 months, with no fine when the tax due is zero (Article 274(3)). Unpaid tax carries interest of 0.05% for each overdue day, counting the payment day (Article 272(4)).

Salaries totalling up to GEL 6,000 a year paid by a small business status holder are not taxed at source if the holder registered as an individual entrepreneur and got the status in the same year, or had gross income of no more than GEL 50,000 the year before (Article 94(4)).