Andorra: A Guideline to Payroll and Employer of Record

Run your business seamlessly with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Andorra.

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Despite being small, Andorra has one of the highest average life expectancies globally. Ranking among the top nations for longevity, this can largely be attributed to a high quality of life, comprehensive healthcare, and an overall healthy lifestyle. In addition, Andorrans fosters a positive and productive work culture, embodying traits of an ideal workforce. The country’s high life expectancy likely stems from wealth, wellness, and workplace satisfaction.

Do your organization's expansion plans require hiring employees in Andorra? Do you lack a physical entity in the country – a key requisite to hire local talent? Neeyamo – one of the top Global payroll providers, assists organizations worldwide with onboarding and managing employees in Andorra - processing payroll, managing local compliance requirements, benefits, and more.

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Facts And Stats


Andorra la Vella



Official Language


Fiscal Year

01 January - 31 December

Date Format


Country Calling Code


Other Languages

Spanish, Portuguese, and French

Time Zone

UTC +1

Global Payroll


Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse and drastically affect the time and efforts that can be used in other equally important aspects of an organization's development. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. 

Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll. Cloud-based payroll service providers, like Neeyamo, assess payroll industry trends and offer a consolidated solution in its Global Payroll Technology Stack, making outsourcing payroll costs per employee easier.

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Neeyamo aids you in completing all your payroll and tax accounting needs.

Employee Taxes

Employee Contribution:

  • General Branch (Old Age, Disability, Survivors, Sickness, Maternity, Medical): 3.5% of gross earnings
  • Retirement Branch: 3% of gross earnings

Employee Income Tax

  • 0 EUR – 24,000 EUR - 0%
  • 24,001 EUR – 40,000 EUR - 5%
  • Over 40,000 EUR - 10%

Employer Taxes

Employer Contribution:

  • General Branch: 7% of gross earnings
  • Retirement Branch: 8.5% of gross earnings

Payroll Cycle


Undoubtedly, payroll is a critical aspect of any organization. The Pay cycle is a notable feature that provides a sense of accountability for an employee to be paid consistently for their work.


The frequency cycle is Monthly.

13th Month Cycle

There is no statutory requirement to pay the 13th or 14th month salary.

Global Work


An Employer of Record services (EOR) provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account prior to making a job offer to an international hire. 

 An Employer of Record services provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.  

This allows organizations to focus on collaborating with the employee in Fiji for operational tasks, with the knowledge that they have a cost-effective solution to support their global HR and payroll requirements as they continue their global expansion.

HR Mandates and Practices

Minimum Wage

The minimum wage in Andorra is €1,286.13 per month or €7.42 per hour.


In Andorra, the overtime law stipulates the following limits and payment rates: Overtime is limited to two hours per day, 15 hours per week, 50 hours per month, and a maximum of 426 hours per year.

The payment of overtime wages is subject to the following rates: 25% extra for the first four hours, 50% for the following four hours, and 75% beyond the ninth hour of overtime.

For general overtime, if there is no company agreement or collective bargaining agreement, there is a minimum 40% surcharge of the fixed salary for each hour.

Employees may agree to overtime up to a maximum of 12 hours per week, 48 hours per month, and 426 hours per year. 


Data Retention Policy

In Andorra, the data protection law does not explicitly specify the retention period for employment data. However, companies are required to maintain a detailed internal register of all personal data processing actions (RAT).

Hiring and Onboarding Requirements


The Law 35/2008, of 18 December, of the Code of Labour Relations, prohibits (Article 4) any discrimination based on sexual orientation and considers the discriminatory clauses to be void for this reason.

Articles 97 and 98 recognize the worker who suffers discrimination for his/her sexual orientation the right to choose for the compensation of unfair dismissal or for the reincorporation to the company, with compensation of the prejudices that s/he has suffered.

Article 159 establishes as a very serious infraction the managerial decision that implies discrimination for sexual orientation. Discrimination based on gender identity is included in the provision on sexual discrimination and is not treated separately, as is the case with discrimination based on sexual orientation discrimination.


Required documents:

  • Employment Contract
  • National Identity Document (DNI) or Andorran Residency Card
  • Bank Account Details 
  • Academic Credentials
  • Proof of Address
  • Health Insurance Information
  • Payroll Form
  • Social Security Registration
  • Tax Declaration Form
  • Work Permit Application (if applicable)



The probation period for employees is typically up to three months, although it can vary based on the type of role and the agreed remuneration. For managerial positions where the agreed remuneration exceeds three times the minimum salary, the probation period may also be up to three months.


Public Holidays

  • 1 January: New Year's Day        
  • 6 January: Epiphany        
  • 12 February: Carnival        
  • 14 March: Constitution Day        
  • 28 March: Bank holiday
  • 29 March: Good Friday
  • 1 April: Easter Monday         
  • 1 May: May Day         
  • 20 May: Whit Monday         
  • 15 August: Assumption of Mary        
  • 8 September: National Day        
  • 1 November: All Saints' Day        
  • 8 December: Feast of the Immaculate Conception        
  • 25 December: Christmas Day        
  • 26 December: Boxing Day

Annual Leave

In Andorra, employees are entitled to a minimum of 30 calendar days of paid annual leave after completing one year of employment with a company. Employees who have not worked for one year are entitled to leave calculated on a pro-rata basis at two and a half days for each month worked.

Sick Leave

Employees in Andorra are entitled to 12 months of sick leave, which may be extended in six-month increments for up to three years. Sick leave is covered at 53% of normal pay for the first 30 days of absence, then 66% for days 31 to 540, then 60% 

The sick leave entitlement is calculated based on the length of service, with employees entitled to three days of sick leave in the first year of employment, six days for the second year, and nine days for the third year and beyond.

Maternity Leave

Female employees in Andorra are entitled to 16 weeks of maternity leave at full pay. The entitlement increases to 18 weeks if there are medical complications or multiple births. Benefits are paid at 100% of the female employee’s average daily earnings, based on the last 12 months worked of the 24 months prior to leave.

Paternity Leave

Fathers are entitled to 14 days of paternity leave at full pay. The mother can choose to transfer some of her leave entitlement after she has used six weeks



The contract is terminated in the following cases:

  • By the expiration of the term or completion of the work for which has been agreed If, after the deadline has expired or the work is finished, services continue, the contract is understood to be extended for an indefinite period unless otherwise established in writing.
  • By the parties mutual consent. The contract's expiration must be made necessary in response by agreement of the parties.
  • For death or permanent total disability of the person: In the event that an employment connection is terminated owing to the death of a salaried employee, the employment receipt shall be given to whoever has custody of young children, without regard to the right of testamentary or legal heirs to exercise the proceedings.
  • When the employee reaches the age that allows him to receive the retirement pension, unless this pension does not reach the current economic threshold of social cohesion.

Dismissal without cause

Contracts for an indefinite period can be dismissed by the company to the salaried person through a communicated notice with a notice of twelve days per year worked, or the part thereof proportional corresponding to the shortest time worked, with a maximum of thirty days, and the payment of compensation economic equivalent to the salary of 25 days per year worked or the proportional part corresponding to the shorter time worked, with a maximum of 365 days.

  1. Except in the cases excluded by this Law, in contracts for a specific duration, or for specific work or specific service, the termination of the contract by the company before the fixed term carries the company's obligation to satisfy compensation economic equivalent to the salary of 25 days per year worked, or the proportional part corresponding to the shorter time worked, plus another two days for each remaining month until the initially planned date of completion of contract or specific work or specific service. 
  2. If a pregnant employee is informed of her dismissal without cause, they must notify the company within the maximum period of ten working days, on average, of any reliable conduct and attach a medical certificate attesting to it. Once the aforementioned notification is made, the dismissal by the employee is considered null and void. 

a) The supervening ineptitude of the salaried person once the trial period has ended, for having occurred a disability or a lack of professional faculties of this person to carry out the tasks essentials of their work. 

b) The lack of adaptation of the salaried person to the technical modifications that have occurred in their functions when these changes are reasonable and at least three months have passed since they left, as long as the company has given the training necessary so that the employee can adapt to the new functions. 

Notice Period

One day of notice for every month worked for the employer, up to a maximum of 90 days. These notice periods do not apply for workers in a probation period, which ranges from one month to three months, depending on the seniority.

Severance Pay

  1. For open-ended contracts: If you get fired for no reason, the company pays you extra money (notice + compensation). This extra money is 25% more than the regular amount. You get this extra money for a maximum of 24 months.
  2. For fixed-term contracts or specific projects: If you get fired for no reason, the company pays you compensation.This compensation is the same amount you would get if you were fired from an open-ended contract.
  3. If a pregnant employee is fired unfairly, in a bad way, or by taking advantage of her situation, the company has to pay her a significant amount of money, at least three months' salary, for every year she worked at the company.
  4. If a salaried employee with company-provided housing gets fired unfairly or for valid reasons, and the company doesn't want to keep paying for their housing, they need to give the employee extra money to help them find new housing. This means the extra money should be enough to cover the cost of finding and moving into new housing, and it should be calculated based on the number of days the employee would have been allowed to stay in the company housing if they hadn't been fired.



Foreign nationals who plan to work in Andorra will need to obtain an active residency permit. This permit allows foreign nationals to live and work in Andorra and is available to self-employed foreigners as well as those who have contracts to work for local companies.

The process of obtaining an active residency permit involves presenting a variety of documents in support of the application, including registering with the social security system in Andorra.

Andorra also offers seasonal work permits for foreigners who plan to work in the country for a limited period.

It is important to note that Andorra has a set quota of permits for foreigners applying to reside in the country through active residency. 

Employee Background Checks


In Andorra, pre-employment background screening checks for employees are generally permissible. Employers are allowed to conduct background checks that involve checking an individual's education, identity, criminal records, address, and references.

However, they should follow local laws and regulations regarding data privacy and protection and obtain necessary consent before conducting any background checks.

Some key points to consider when conducting background checks in Andorra include:

  • Compliance with local laws and regulations: Employers should be aware of and adhere to the local laws and regulations regarding data privacy and protection
  • Obtaining consent: Employers should obtain the necessary consent from the employee before conducting any background checks.
  • Past employment verification: Past employment verification is recommended for all employees in Andorra

Last updated on December 15, 2023. 

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