---
title: "Georgia EOR vs Entity 2026 | Crossover + When to Switch"
description: "Georgia EOR vs own entity. Employer charge is just 2% funded pension. Flat 20% income tax. Crossover is a moving planning point, not a fixed headcount. Full guide."
canonical: https://www.teamed.global/country-hiring-guides/georgia/eor-vs-entity
---

Georgia · EOR vs entity child

Served by Teamed vetted partner-entity network in Georgia

# When do you graduate from an *EOR to your own Georgia entity*?

Georgia loads almost nothing onto the employer. The only mandatory employer charge is a 2% funded pension contribution, on top of a flat 20% income tax and a minimum wage frozen at GEL 20/month since 1999. So the entity decision here is not about statutory cost. It is about the fixed overhead of running a Tbilisi company, and that pushes the crossover later than most countries.

Last reviewed 13 June 2026 · Georgia guide

![Tbilisi old town rooftops with the Narikala fortress on the hillside above the Mtkvari river at golden hour.](/images/country-guides/georgia-eor-vs-entity.webp)

Illustration · Tbilisi, Georgia

Answer.cite this

EOR wins at low headcount in Georgia. The statutory employer load is tiny. Your only mandatory employer charge is a 2% funded pension contribution.

Income tax is a flat 20%. The minimum wage sits at GEL 20/month, untouched since 1999. None of this changes whether you use EOR or your own entity. So the entity decision turns on fixed overhead, not payroll tax.

Forming a Georgian LLC is fast and cheap. Running one is the real cost. A small Tbilisi company typically costs GEL 4,000 to 8,000 per month to operate. That fixed line crosses the EOR line later than usual, but there is no fixed headcount where it happens: it moves with the flat $599 per-employee EOR fee, your entity quote, and how fast you are growing. These are typical market ranges, not law figures.

## The crossover maths

EOR cost scales per head. Entity cost is mostly a fixed monthly overhead. Where the two lines cross is a planning point, not a fixed headcount: it moves with the flat $599 per-employee EOR fee, your entity quote, and how fast you are growing. Run your own numbers in the Crossover Calculator.

Teamed charges from $599 per employee per month. A small Georgian LLC typically runs GEL 4,000 to 8,000 per month for accounting, payroll, and statutory filings. That fixed line needs more heads to amortise here, because Georgia adds almost no statutory employer cost on top.

The table below uses GEL 1,600 as an illustrative GEL equivalent of the Teamed fee. This is illustrative. The actual GEL amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.

Every entity cost figure in this table is a typical range, not a law figure. They cover outsourced accounting, payroll, and statutory filings for a small Georgian LLC. Actual costs vary with your provider and how much you run in house.

The statutory side barely moves the line. The employer funded pension contribution is 2% of gross salary, and the employee pays a matching 2%. Income is taxed at a flat 20%, withheld at source. These rates apply whether you use EOR or your own entity. Unlike most countries, Georgia carries no broad employer social insurance charge on top, so the crossover is driven almost entirely by your fixed overhead.

[Run the Crossover Calculator with your own headcount and salary band.](/tools/crossover-calculator/georgia)

1. Calculate the EOR cost Multiply the Teamed fee (from $599 USD) by your planned Georgia headcount. This is the fixed variable cost. It grows in a straight line as you hire.
2. Estimate the entity fixed overhead Typically GEL 4,000 to 8,000 per month for a small Georgian LLC. This covers accounting, payroll, statutory filings, and first-point HR. It does not grow much until headcount climbs past the low teens.
3. Find your crossover point The crossover is where EOR monthly cost equals the entity monthly overhead. There is no fixed headcount where this happens: it moves with the flat $599 per-employee EOR fee, your entity quote, and how fast you are growing. Use the Crossover Calculator for your own numbers.
4. Factor in non-financial triggers The maths gives you a planning point, not a fixed line. Tax-regime access, local presence requirements, and market-validation reversibility are separate questions that may override the cost crossover in either direction.
5. Plan the graduation date Allow two to four weeks for entity formation before the first payroll on your own entity. The bank account is the common bottleneck. Start the GEMO process while EOR keeps running.

## Georgia entity setup: what it actually costs

Forming a Georgian LLC is one of the cheapest and fastest in the region. The state registration fee is modest. All in, formation typically costs GEL 2,000 to 6,000 once you add a local address, accounting setup, and contract templates.

Allow roughly 2 to 4 weeks from the decision to your first payroll run. Registration at the National Agency of Public Registry can complete in one day. The bank account is usually the gating step.

These are typical ranges, not law figures. No law sets what a Georgian LLC costs to form. The range reflects real professional services rates in Tbilisi. It varies with how much you outsource and whether your directors are resident.

| Cost item | Typical range | One-off or recurring |
| --- | --- | --- |
| National Agency of Public Registry filing (standard) | GEL 100 to 200 | One-off |
| Expedited same-day registration | GEL 200 to 400 | One-off |
| Charter and incorporation documents | GEL 500 to 1,500 | One-off |
| Revenue Service and pension scheme registration | GEL 0 direct (admin time) | One-off |
| Legal address / registered office | GEL 600 to 2,400 per year | Recurring |
| Business bank account | GEL 0 to 300 (setup varies) | One-off plus monthly fees |
| Employment contract templates | GEL 800 to 2,500 | One-off |
| HR policies and internal regulations | GEL 600 to 2,000 | One-off |
| **Realistic total setup cost** | **GEL 2,000 to 6,000** | **Mostly one-off** |

### Why the bank account matters for payroll

Georgian banks run their own compliance checks before opening a business account, and they scrutinise foreign-owned companies closely. Registration at the Public Registry is fast, often same day. The bank account is what sets your real timeline. Expect 1 to 3 weeks for a resident-director company, and longer if directors sit abroad and need remote verification. That can turn a one-day incorporation into a 3 to 5 week wait before your first compliant payroll run.

## Georgia entity ongoing cost: typically GEL 4,000 to 8,000 per month

Running a small Georgian LLC typically costs GEL 4,000 to 8,000 per month. That covers outsourced accounting, payroll, statutory filings, and first-point HR.

While your team is small, this fixed overhead dominates the per-head cost. As headcount grows, the overhead amortises and the entity starts to look cheaper. There is no fixed number where that flips; it moves with the $599 per-employee EOR fee, your entity quote, and your growth rate.

These figures are typical market ranges for a small Georgian company with 1 to 13 employees. They are illustrative, not law figures. Actual costs depend on whether you outsource or hire in house, and on the complexity of your payroll and benefits.

| Monthly cost item | Typical range (GEL) | What it covers |
| --- | --- | --- |
| Outsourced bookkeeping and monthly accounts | 1,200 to 2,500 | Reconciliation, accruals, monthly management accounts |
| Payroll service (1 to 13 employees) | 600 to 1,500 | Income tax withholding, pension filings, payslips |
| Annual financial statements (amortised) | 400 to 900 | Annual cost divided across 12 months |
| Corporate and tax compliance filings | 300 to 700 | Revenue Service returns and registry updates |
| HR and employment law advisory | 500 to 1,200 | Contract reviews, disciplinary support, policy updates |
| Georgia People Ops and first-point HR | 800 to 1,800 | Onboarding, leave admin, employee queries |
| Software subscriptions (HRIS, payroll, accounting) | 200 to 600 | Per-user software tools |
| **Total ongoing monthly** | **4,000 to 8,000** | **1 to 13 employee company** |

Above 13 employees, dedicated in-house HR and finance capacity usually becomes necessary and the band widens. Private health cover, which is common in competitive Tbilisi tech hiring, can add GEL 80 to 250 per employee per month and is not included in the overhead estimates above.

## The cost nobody quotes: director liability

A Georgian LLC director carries personal duties under the Law on Entrepreneurs. These cannot be handed to an accountant. Late or wrong filings attract penalties that land on the company and its director.

EOR clients carry none of this. Teamed holds it as the legal employer.

Most cost comparisons skip the director-liability dimension because it is hard to put a number on. It is worth naming before you decide.

### Personal director duties under Georgian law

A director of a Georgian LLC must act in good faith and in the interests of the company, exercise due care, and avoid conflicts of interest. Breach of these duties can bring personal civil liability. These are personal duties. They cannot be outsourced to an accountant or a service provider.

### The compliance treadmill

- **Monthly payroll filings**: income tax at 20% is withheld and remitted to the Revenue Service each month, alongside the 2% pension contribution.
- **Pay cycle and late-payment penalty**: wages must be paid at least monthly. Late payment carries a 0.07% per day penalty on the delayed amount ([Labour Code, art. 41](https://matsne.gov.ge/en/document/view/1155567)).
- **Pension scheme remittance**: the mandatory funded pension contributions are filed and paid each month with no margin for error.
- **Annual financial statements**: filed under Georgia's accounting and reporting rules, with thresholds by company size.
- **[Corporate income tax](/country-hiring-guides/georgia/tax-and-payroll)**: Georgia taxes distributed profit, so the filing rhythm follows your distributions.

Each filing is individually manageable. Stacked across a year, they consume real management attention and carry personal director risk on every missed deadline. An EOR carries all of these on its own entity.

## When you should stay on EOR

While your team is small, during market validation, or on project-based hires, EOR is the right answer. The crossover is a maths threshold, not a strategic verdict.

Reversibility matters. Ending an EOR relationship is straightforward. Closing a Georgian LLC means deregistration with the Revenue Service and the Public Registry, plus settling employee terminal pay. It is not instant.

- **While your Georgia team is small, at typical Tbilisi salaries**: EOR is cheaper every month. The entity overhead has little to amortise against at low headcount, and Georgia adds almost no statutory cost to tip the balance.
- **Market validation phase**: you are hiring 1 or 2 people to test commercial fit. Entity setup commits management attention before you know whether Georgia will deliver.
- **Project-based hires**: 6 to 12 month engagements where the formation and run cost will not amortise before the project ends.
- **Uncertain headcount trajectory**: Georgia is a priority market but you have not committed to long-term growth. EOR preserves optionality.
- **Lean back office**: you have no local finance or HR capacity and do not want to build it yet. EOR keeps the compliance rhythm off your team.

## When you should switch to your own entity

Past your crossover point, with a multi-year Georgia plan, or where local presence matters to customers or regulators, your own entity starts winning on cost. It also unlocks things EOR cannot provide.

Georgia actively courts foreign business with low tax and special regimes. Some of those, such as Virtual Zone or International Company status, require your own registered Georgian entity, not EOR employment.

- **Sustained headcount past your crossover point in Georgia** at typical salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
- **Tax-regime access**: Virtual Zone Person status for IT companies and International Company status for qualifying sectors both require a registered Georgian entity. EOR employment does not grant access to these regimes.
- **Local substance and presence**: enterprise customers, banks, or government contracts that want a registered Georgian counterparty need a real entity, not an EOR arrangement.
- **Equity for senior hires**: founding-level local hires expecting equity in a Georgian-registered company need a local entity to structure those arrangements.
- **Multi-year growth plan**: you have line of sight to 15 or more Georgia employees over 24 months. Starting formation early means your entity is ready before the crossover, not after it.

## How Teamed's Graduation Model handles the transition

Teamed graduates customers from EOR to their own entity on the same platform. Same Georgia specialist. Same employment contracts, novated to the new entity. No break in employee tenure or benefits.

Most providers treat graduation as a re-onboarding event. Employees re-sign, sometimes lose continuous service, and lose accrued leave. Teamed treats it as a stage of the employment lifecycle.

The technical mechanic is **contract novation**: the employment contract transfers from Teamed's partner entity to your new Georgian company on a specified date. All terms carry across. Salary, the funded pension contributions, annual leave entitlement, and continuous service date all remain unchanged. The employee sees a different employer name on their payslip. Nothing else changes.

What we do operationally:

- Stand up your Georgia entity through [GEMO](/entity-management), typically around 2 to 4 weeks, while EOR keeps running in parallel.
- Register the new entity with the Revenue Service and the mandatory funded pension scheme.
- Open the entity bank account and payroll mandate.
- Novate every active employment contract on a single effective date.
- Migrate ongoing benefits, including any private health cover, without a lapse.
- File final EOR-period payroll returns and open new filings on the entity from the novation date.
- Provide the same People Ops specialist as the post-graduation primary contact.

The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us.

## How does Teamed handle Georgia employment for you?

Teamed becomes your legal [employer of record](/employer-of-record) in Georgia for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency.

Payroll, benefits, and the full Georgia employment law stack run on **one platform**.

**Real HR and legal experts** handle your Georgia hires from the first offer letter through every monthly payroll filing. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**. Every employer cost **passes through at cost, itemised** on every invoice. You see the employer funded pension line at 2%, income tax withheld at the flat 20%, and the annual leave accrual for 24 days. Nothing is hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. Run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to see the month the model flips. Start from [the Georgia hiring overview](/country-hiring-guides/georgia). Key sources: [Labour Code of Georgia](https://matsne.gov.ge/en/document/view/1155567) and the [Law on Funded Pensions](https://matsne.gov.ge/en/document/view/4280127).

## Frequently asked questions

At what headcount does an EOR stop being cheaper than a Georgia entity?

There is no fixed crossover headcount; it is a planning point, not a cut-off. It moves with the flat EOR fee (from $599 per employee per month), the typical entity overhead of GEL 4,000 to 8,000 per month, and how fast you are growing. While your team is small, the EOR fee is cheaper than that overhead. As headcount grows, the entity overhead amortises and per-employee cost falls below the EOR fee. The crossover lands later than in most countries because Georgia adds almost no statutory employer cost. Use the Crossover Calculator to run your own salary band.

How much does it cost to set up a Georgian LLC?

Typically GEL 2,000 to 6,000 all in. The National Agency of Public Registry filing fee is modest, with an expedited same-day option. The rest is professional fees: charter documents, a legal address, employment contracts, and HR policies. The range varies with how much you outsource to a local corporate services firm.

How long does it take to set up a Georgia entity and run the first payroll?

Registration at the Public Registry can complete in one day. The bank account is the gating step, usually one to three weeks for a resident-director company and longer if directors are abroad. Allow two to four weeks overall from the decision to first payroll if you use a local corporate services firm or Teamed GEMO.

What are the statutory employer costs on both sides of the comparison?

The only mandatory employer charge is the funded pension contribution at 2% of gross salary, matched by 2% from the employee. Income is taxed at a flat 20%, withheld at source. The minimum wage is GEL 20/month, frozen since 1999 and well below market pay. These apply whether you employ via EOR or your own entity. Georgia carries no broad employer social insurance charge on top, which is why the crossover is driven by overhead rather than payroll tax.

Is there a statutory 13th-month salary or bonus in Georgia?

No. The Labour Code of Georgia sets no mandatory 13th- or 14th-month salary. The form and amount of remuneration are set by the employment agreement. Any annual bonus is contractual, not a legal requirement, and it costs the same whether you run EOR or your own entity.

What is Teamed's Graduation Model for Georgia?

Teamed graduates customers from EOR to their own Georgia entity on the same platform. Employment contracts are novated to the new entity on a single date. Salary, funded pension contributions, annual leave entitlement, and continuous service date all carry over unchanged. Teamed handles entity formation through GEMO, registers the new entity with the Revenue Service and the funded pension scheme, and migrates benefits without a lapse.

Teamed Legal Operations

Georgia is unusual. The statutory employer load is almost nothing, just a two percent funded pension contribution and a flat income tax withheld at source. That means the entity decision is not about payroll cost at all. It is about who carries the monthly filing rhythm and the director risk that comes with running a Georgian company. The EOR absorbs both on day one. Your own entity does not start that clock until your registration is complete and your payroll is live.

A note from Tom Price-Daniel

Georgia barely taxes the employer. The only mandatory charge is a two percent funded pension, so the entity call is about overhead, not payroll tax.  
EOR is the right answer up to your crossover point, which moves with the flat $599 per-employee EOR fee, your entity quote, and how fast you are growing.  
When the maths flips, we tell you and move you across. That is the only honest version of this.

Tom Price-Daniel · Co-founder, Teamed

## Related Georgia guides

- [Hiring in Georgia, overview](/country-hiring-guides/georgia)parent
- [Georgia hiring guide](/country-hiring-guides/georgia/hiring-guide)sibling
- [Georgia tax and payroll guide](/country-hiring-guides/georgia/tax-and-payroll)sibling
- [Georgia termination and severance](/country-hiring-guides/georgia/termination-and-severance)sibling
- [Armenia EOR vs entity](/country-hiring-guides/armenia/eor-vs-entity)sibling
- [Employer of Record overview](/employer-of-record)core
- The Graduation Modelcore
- [Entity Management (GEMO)](/entity-management)core
- [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator/georgia)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with the Revenue Service of Georgia, the National Agency of Public Registry, and the Pension Agency before relying on any specific framework. Entity setup cost ranges and ongoing cost ranges in this guide are typical market figures based on professional services pricing in Georgia. They are illustrative only and not law figures. Rates cited (employer funded pension contribution, income tax, annual leave) are verified or corroborated figures from the Labour Code of Georgia and the Law on Funded Pensions as at June 2026. Georgia here means the country in the Caucasus, not the US state.