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UPDATED JUL 22, 2026💡 Everything you need to know to hire and manage employees in Armenia through Toku. Toku handles payroll processing, tax withholding, and statutory compliance. This guide covers what you need to plan costs and manage your team.
At a Glance
| Item | Detail |
|---|---|
| Currency | Armenian Dram (AMD) |
| Payroll cycle | Monthly. Toku runs one payroll per month in Armenia. |
| Estimated employer costs on top of salary | None. Armenia has no statutory employer social security or payroll tax contribution - you pay the agreed gross salary. |
| Onboarding lead time | 3-5 business days |
| Standard working week | 40 hours (8 hours per day) |
| Probation period | Up to 3 months |
| Annual leave | 20 working days (5-day work week); 24 working days (6-day work week) |
| Minimum notice on termination | 3 days (probation) up to 2 months (redundancy), depending on grounds and tenure; 30 calendar days for employee resignation |
Onboarding a New Hire
Plan for 3-5 business days between submitting a new hire and their start date. Toku must register the employee with Armenia's tax authority at least 1 business day before their start date — Armenia does not require separate registrations for social security, insurance, or pension; a single tax authority registration covers everything. Your new hire needs to provide a passport or national ID, date of birth, and bank details, and sign the local labor agreement through Toku's electronic system before day one.
Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registration, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.
Employer Costs
Armenia is unusual among the countries Toku runs payroll in: there is no statutory employer social security or payroll tax contribution. You pay the agreed gross salary - full stop. Toku's local payroll provider withholds the following from the employee's pay and remits it to the State Revenue Committee; none of it adds to your cost as the employer:
| Employee deduction | Rate | Notes |
|---|---|---|
| Income tax | 20% flat | On gross salary. No brackets or thresholds. |
| Funded pension (social payment) | 5% of gross up to AMD 500,000/month; above that, 10% of gross minus AMD 25,000 | Mandatory for employees born on or after 1 January 1974. Capped at AMD 87,500/month (salary above AMD 1,125,000 isn't included in the calculation). |
| Stamp duty (Servicemen's Insurance Fund fee) | AMD 1,000/month (salary up to AMD 1,000,000); AMD 15,000/month (salary above AMD 1,000,000) | Flat amount, not a percentage. Effective December 2025. |
| Mandatory health insurance | AMD 10,800/month base premium; effectively AMD 300-3,300/month for most employees under a temporary 2026 state subsidy | Applies once monthly gross salary reaches AMD 200,001 in any month from November 2025 onward. Employees below that threshold join the system 1 January 2027. |
All four are employee-side withholdings that Toku calculates and remits on your behalf, acting as tax agent - they don't add to what you pay as the employer.
Compensation & Payroll
Toku runs one payroll per month in Armenia, and employees receive a payslip each cycle through the Toku platform. Salaries are paid in AMD.
Armenia's minimum wage is AMD 75,000 per month (AMD 500/hour), in force since a January 2023 legislative change and unchanged through 2026. It applies uniformly - there's no reduced rate for age, industry, or probationary employees. Flag for your planning: the Armenian government has announced a further increase to AMD 85,000/month; as of mid-2026 it hadn't yet taken effect, so confirm the current rate with your Toku account manager before finalizing an offer near the floor.
If an employee takes annual leave, their leave pay must reach them at least 3 working days before the leave starts - this sometimes requires an off-cycle payment outside the normal monthly cycle.
Employment Contracts & Probation
- Toku issues a compliant local employment agreement for every hire through WorkCo Armenia.
- Probation may run up to 3 months. Full payroll, tax, and registration obligations apply from day one - there's no reduced compliance burden during the trial period.
- Either party may end the employment during probation; the employer must give 3 days' written notice.
- If the employee continues working after probation ends, employment continues automatically under the original agreement.
Working Hours
The standard working week is 40 hours (8 hours per day). Overtime is paid at 150% of the regular wage. Hard limits apply: no more than 12 hours per day or 48 hours per week including overtime, and overtime itself is capped at 4 hours over two consecutive days and 120 hours per calendar year. Employers must keep accurate records of actual hours worked, including overtime, even though timesheets aren't submitted to the state.
Leave Entitlements
| Leave | Entitlement | Who pays |
|---|---|---|
| Annual leave | 20 working days per year (5-day work week); 24 working days (6-day work week) | Employer |
| Sick leave | Incapacity benefit at 80% of salary; employee must register as incapacitated at a local polyclinic | Employer (first 5 days), state social insurance thereafter |
| Maternity leave | 140 days standard (70 before birth + 70 after); 155 days for complicated childbirth; 180 days for multiple births | State social insurance, at 100% of average earnings |
Unused annual leave may not be replaced with monetary compensation while the employee is still working - it must be taken.
Public Holidays (2026)
Armenia has 12 non-working public holidays in 2026, including the 3-day New Year holiday spanning December 31 - January 2.
| Date | Holiday |
|---|---|
| January 1 | New Year's Day |
| January 2 | New Year Holiday |
| January 6 | Christmas and Epiphany |
| January 27 | Day of Remembrance of the Dead (Homeland Defenders) |
| January 28 | Army Day |
| April 24 | Genocide Remembrance Day |
| May 1 | Labour Day |
| May 9 | Victory and Peace Day |
| May 28 | Republic Day |
| July 5 | Constitution Day |
| September 21 | Independence Day |
| December 31 | New Year Holiday (start of next year's 3-day New Year holiday) |
Benefits: Required vs. Common Extras
Statutory (included in the employee withholdings above - not an employer cost): the mandatory funded pension for employees born on or after 1 January 1974, and mandatory universal health insurance for employees earning above AMD 200,000/month. Armenia doesn't require employers to provide private health coverage or additional insurance.
Toku offers fully sponsored international health coverage through Remote Health, underwritten by SafetyWing. See 🌍 Global Coverage: Remote Health by SafetyWing and Remote Health, Your Global Insurance Plan for coverage details and enrollment - this is the standard supplemental benefit Toku provides in countries without a dedicated local plan, including Armenia.
Talk to your Toku account manager about the cost impact of any additional extras you'd like to offer.
Ending Employment
Termination in Armenia depends heavily on the grounds for termination and requires strict documentation. Involve Toku early so we can manage the process compliantly through WorkCo Armenia. For the process, see How to Terminate an Employee or Contractor.
| Scenario | Notice |
|---|---|
| During probation | 3 days (employer) |
| Employee resignation | 30 calendar days |
| Termination by mutual agreement | 7 days |
| Termination due to change in essential employment terms | 14-60 days, depending on tenure |
| Redundancy / staff reduction | Up to 2 months |
Severance is generally owed only for redundancy or staff-reduction terminations, calculated on average monthly salary and length of service. It's not owed for resignations, fixed-term contract expiry, or terminations for the employee's fault. Tax deregistration must be completed within 3 working days of the termination date; Toku handles this on your behalf. Final settlement must include any unpaid salary for a partial month worked, unused annual leave payout, and severance where applicable.
Hiring Someone from Overseas?
Foreign nationals need both a work permit and a temporary residence permit to work in Armenia; it's the employer's obligation to apply for and obtain these on the employee's behalf. Citizens of Eurasian Economic Union (EAEU) member states, along with a few other categories (highly qualified specialists, founders/directors of foreign-invested companies), are exempt from the work permit requirement. Work permit processing typically takes around 13 business days, though the residence permit adds to the overall timeline. Permits are issued for one year and are renewable annually. Talk to Toku before extending an offer to a candidate who needs sponsorship.
Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.