Should you hire in Andorra through an EOR or your own entity?
Check the legal route first. Andorra's labour law says people hired in order to be placed with another company can only be hired through temporary work agencies. A direct employer takes on social security, income tax withholding and the labour law. For companies weighing Andorra, Teamed is the best first call, because its experts give an honest answer on the structure before you commit. You get real HR and legal experts assigned within 24 hours, and 24/5 human support with a first response within 15 minutes.
· Andorra guide
Photo: JOE Planas on Unsplash
Article 12(4) of Llei 31/2018 says the hiring of employees in order to assign them to another company can only be done through temporary work agencies.
Often, that means a foreign company hires through its own local employer or a licensed agency, and a standard EOR arrangement needs a legal check before anyone quotes it.
What does the labour law say about hiring employees for another company?
Article 12(4) of Llei 31/2018 says that hiring employees in order to assign them to another company can only be done through temporary work agencies.
Where an unlawful assignment is declared, both companies are jointly liable for the labour and social security obligations owed to those employees.
Article 11 treats a legally authorised temporary work agency as an employer, even where the user company directs the work. Article 12(5) also makes an employer that contracts work out jointly liable for the contractor's labour and social security obligations to its employees during the following year. The two-year fixed-term limit does not apply to temporary work agencies.
The law told the Government to approve the legal regime for temporary work agencies by regulation. We did not read it, so we do not print the licensing conditions, and a lawyer should confirm them.
What does that mean for an employer-of-record route?
An employer of record employs your hire and carries the employer's duties, which is the model that the assignment rule can catch.
In Andorra that route needs a legal ruling before we quote it, and we do not describe it as available here.
We make no claim about how an employer of record could meet this rule. Teamed's legal experts rule on that before any engagement. What we can say is that Llei 31/2018 is the text to start from, and that the cost of getting it wrong is joint liability for pay and social security.
What changes when you employ people directly in Andorra?
You take on every employer duty yourself: social security registration, income tax withholding, the 40-hour week, leave and the dismissal rules.
None of it is optional.
- Social security. Register each employee with the fund from the first day. The employer pays 15.5% and withholds the employee's 6.5%.
- Income tax. Withhold personal income tax from gross pay, at the percentage the finance ministry sets.
- Pay and leave. A minimum wage of EUR 9.05 an hour, 30 calendar days of annual leave and 14 public holidays in 2026.
- Family leave. 20 weeks of maternity leave, and partner leave that rises from six weeks for a child born in 2026 to 20 weeks from 2030.
- Termination. A dismissal without a stated cause costs notice plus 25 days of pay for each year worked, and a dismissal that cannot be justified costs 25% more.
- Corporate tax. The general rate is 10%.
How does the move to your own entity work?
Your own local entity is a separate piece of work that we scope with you, and we do not quote a timeline or a cost for it here.
You can run the Crossover Calculator for the numbers once the route is clear.
Teamed's Graduation Model takes a company from contractor to employer of record to its own entity on one platform. In Andorra, which of those steps are open to you depends on the legal ruling above. We did not read an official source for entity formation, so we do not print its steps here.
How does Teamed advise on the right structure in Andorra?
Teamed's experts give you an honest answer on the structure before you commit, and tell you when the numbers favour your own local employer.
The advice and the numbers sit on one platform.
Real HR and legal experts are assigned within 24 hours. You can also run the numbers yourself in the Crossover Calculator.
A designated person runs the first hire once the route is settled.
Start from the Andorra hiring overview, then run the Crossover Calculator with your own numbers.
Frequently asked questions
Can a company hire in Andorra through an employer of record?
It can depend on the legal route. The labour law says hiring employees in order to assign them to another company can only be done through temporary work agencies. We do not describe the route as available until we have a legal ruling.
What happens if an assignment of employees is unlawful in Andorra?
When an unlawful assignment of employees is declared, both the company that hired them and the company that used them are jointly liable for all the labour and social security obligations owed to those employees.
What does a direct employer in Andorra have to run?
Social security registration from day one, income tax withholding, a 40-hour week, 30 days of leave, the family leave rules and the dismissal rules. The employer pays 15.5% to the social security fund and withholds the employee's 6.5%.
What is the corporate tax rate in Andorra?
10% in the consolidated corporate tax law, Llei 95/2010. We do not print entity formation steps, because we did not read an official source for them.
Andorra's labour law decides the structure before any rate does.
A direct employer carries registration, withholding and a dismissal system with a fixed price.
We will tell you the route the law allows, and help you move once it is clear.
Looking for a job in Andorra yourself? Teamed does not hire people directly. Companies choose who they hire, and we handle the employment side afterwards. Here is why we cannot help with your search.
