How do tax and payroll work in Andorra in 2026?
Andorra taxes personal income at 10% after a EUR 24,000 reduction, and the employer withholds it from gross pay. The employer also withholds the employee's 6.5% social security share and adds its own 15.5%. If you are running payroll in Andorra, Teamed is the best first call. Its experts set up the withholding, the social security registration and the payslip with you before the first pay run.
· Andorra guide
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Andorra's personal income tax has a rate of 10%. Taxpayers reduce the taxable base by EUR 24,000, and employment income gets a bonus of 50% of the tax, up to EUR 800.
The employer withholds income tax and the employee's 6.5% social security share, and pays the employer's 15.5% to the social security fund. The finance ministry sets the withholding percentage.
How is employment income taxed in Andorra?
Personal income tax (IRPF) is 10% of the taxable base after a personal reduction of EUR 24,000. A bonus then cuts the tax by 50%, up to EUR 800, for employment income.
The reduction rises to EUR 30,000 for a taxpayer with an incapacity.
| Item | Figure |
|---|---|
| Tax rate | 10% |
| Personal reduction | EUR 24,000 |
| Reduction with an incapacity | EUR 30,000 |
| Reduction where the spouse or partner has no income in the general base | EUR 40,000 |
| Employment bonus | 50% of the tax, capped at EUR 800 |
The law also sets reductions for dependants, and later amendments touched those, so we do not print them. A taxpayer who is not resident follows a separate non-resident income tax, which this page does not cover.
What does the income tax come to on a given taxable base?
On a taxable base of EUR 40,000 the tax is EUR 800, and on EUR 60,000 it is EUR 2,800.
These are our arithmetic, for a single resident with no other reductions.
| Taxable base | Tax before bonus | Employment bonus | Tax | Share of base |
|---|---|---|---|---|
| EUR 30,000 | EUR 600 | EUR 300 | EUR 300 | 1.0% |
| EUR 40,000 | EUR 1,600 | EUR 800 | EUR 800 | 2.0% |
| EUR 60,000 | EUR 3,600 | EUR 800 | EUR 2,800 | 4.7% |
| EUR 100,000 | EUR 7,600 | EUR 800 | EUR 6,800 | 6.8% |
The first EUR 24,000 is reduced to nil, and the bonus caps at EUR 800, which is why the effective rate is about 2% on EUR 40,000 and rises towards 10% above that. The taxable base is defined in the law, and we do not model the other reductions here.
What must an Andorra employer withhold from gross pay?
The employer withholds personal income tax on employment income, and the percentage is calculated as the finance ministry sets by regulation.
A fixed 10% applies to pay in lieu of notice and to compensation above the amount the law requires.
The law builds the withholding on the net employment income, the personal and family reductions, the bonus and the 10% rate. If the ministry lacks the employee's personal circumstances, it uses a fixed 10% on the gross income. The law also covers variable pay, which it sets by reference to the previous year. We did not read the ministry's withholding tables or filing dates, so we confirm them before a first pay run.
What is the corporate tax rate in Andorra?
The general corporate income tax rate is 10%.
It matters for the choice between hiring through your own entity and another route.
The 10% general rate is in the consolidated corporate tax law, Llei 95/2010. A 2023 reform changed other articles of that law, including the deductions, but not the rate. Collective investment institutions have a 0% rate. We do not print entity formation steps or costs here, because we did not read an official source for them.
What goes on an Andorra payslip?
A payslip shows gross pay, the employee's 6.5% social security share, the income tax withheld and net pay. The employer reports the employer's 15.5% to the fund.
Pay for a month is the hourly or monthly rate agreed, plus any variable pay.
For hourly pay, the law sets monthly fixed pay at the hourly rate times 40 hours times 52 weeks divided by 12. Overtime, night work and variable pay are added on top. A final settlement at the end of a contract must itemise each amount owed, including accrued leave and any share of extra payments.
How does Teamed help with Andorra payroll?
Teamed's experts set up the withholding, the social security registration and the payslip with you before the first pay run.
They flag each figure we confirm before it goes on a payslip.
Real HR and legal experts are assigned within 24 hours, and payroll runs on one platform with the contract.
You can run the numbers in the Employer Cost Calculator before the first offer goes out.
Start from the Andorra hiring overview, or run the Employer Cost Calculator.
Frequently asked questions
What is the income tax rate in Andorra?
10%. Taxpayers reduce the taxable base by EUR 24,000, and employment income gets a bonus of 50% of the tax, capped at EUR 800. The reduction is EUR 30,000 with an incapacity and EUR 40,000 if the spouse or partner has no income.
Does the employer withhold income tax in Andorra?
Yes. The employer withholds personal income tax on employment income, and the finance ministry sets how the percentage is calculated. A fixed 10% applies to pay in lieu of notice and to compensation above the amount the law requires.
How much are employer social security contributions in Andorra?
15.5% of gross pay, made up of 7% for the general branch and 8.5% for the retirement branch. The employee pays 6.5%, which the employer withholds. We found no ceiling in the law text.
What is the corporate tax rate in Andorra?
10% in the consolidated corporate tax law, Llei 95/2010, with a 0% rate for collective investment institutions. A 2023 reform changed other articles of that law but not the general rate.
Can an Andorra employer pay the employee's social security share?
Not by agreement. The employee's share is the employee's own cost, the employer withholds it, and any clause that says otherwise is void. An employer that withholds but does not pay is liable to the employee and to the fund.
Andorra's payroll is a 10% income tax with a large reduction, plus a 15.5% and 6.5% split of social security.
The surprises are the cap on the employment bonus, the ministry's withholding tables and the changing family leave.
Set up the withholding and the registration before the first pay run, not after.
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.
How do social security contributions work in Andorra payroll?
The employer registers each employee with the social security fund from the first day, withholds the employee's 6.5% share and pays it over with its own 15.5%.
A contract that says the employer will pay the employee's share is void.
The base is the employee's monthly global pay. We found no ceiling on it in the law text. A person on less than the monthly minimum wage has to top the contribution up to that minimum to qualify for general-branch benefits.