Employer of Record in Andorra

Hire employees in Andorra through an Employer of Record (EOR) without setting up a local entity. This comprehensive guide explains Andorra's labour laws, payroll, taxes, benefits, and compliance requirements so you can build a compliant Andorra workforce with confidence.

What is an Employer of Record in Andorra?

An Employer of Record in Andorra is a third-party organisation that legally employs workers on behalf of foreign companies. The EOR takes full legal responsibility for the employment relationship under Andorra's law, while the client company directs the employee's daily work and performance.

This arrangement allows international businesses to hire Andorran professionals quickly and compliantly without establishing a local entity. It is particularly useful for startups, growing businesses, and enterprises exploring the Andorra market for the first time. The EOR manages all employment obligations, including contracts, payroll, tax filings, social contributions, benefits, and ongoing compliance with local labour laws.

Why Hire in Andorra?

Andorra has positioned itself as one of Europe's most tax-competitive jurisdictions while offering an exceptional quality of life nestled in the Pyrenees between Spain and France. The country combines low personal income tax (capped at 10%), modest social contributions, and a stable, predictable regulatory environment that appeals to both employers and employees.

The Andorran workforce is genuinely multilingual: Catalan is the official language, but Spanish, French, and increasingly English are used widely in business. This makes Andorran professionals particularly valuable for companies serving Iberian, Francophone, or pan-European markets, especially in financial services, hospitality, and technology.

While Andorra is not an EU member, it operates a customs union with the European Union and has modernised its tax framework in line with OECD standards. Recent reforms have opened the economy to foreign investment, and government incentives are available for innovation, research, and high-value services.

What Are the Quick Facts About Andorra?

Before hiring in Andorra, it helps to understand the basic country profile at a glance.

What Are the Employment Laws in Andorra?

Employment relationships in Andorra are primarily governed by the Andorran Labour Relations Law (Llei 31/2018). This legislation regulates every aspect of the employment relationship, including contracts, working hours, leave entitlements, termination procedures, and workplace rights.

Written employment contracts are mandatory in Andorra and must be drafted in Catalan. Every contract must specify the job description, salary, working hours, probation period, benefits, and termination terms. Both fixed-term and indefinite-term contracts are permitted under Andorra's law. Fixed-term contracts cannot exceed six months for ordinary fixed-term contracts (renewable under specific rules), including any renewals.

The standard probation period for most roles is capped at one month for ordinary roles (longer for specialised positions). During probation, either the employer or the employee may terminate the relationship with shortened notice as specified by law or the employment contract.

What Are the Working Hours and Overtime Rules in Andorra?

The standard workweek in Andorra is 40 hours (8 hours/day, 5 days). The maximum weekly working time, including overtime, is 48 hours (including overtime). Rest periods and overtime premiums are also regulated by law.

What Leave Entitlements Apply in Andorra?

Andorra employees enjoy comprehensive leave entitlements, including annual leave, public holidays, sick leave, maternity leave, and paternity leave.

Public Holidays Observed: New Year's Day, Epiphany, Constitution Day, Good Friday, Easter Monday, Labour Day, Whit Monday, Meritxell Day, All Saints' Day, Saint Stephen's Day, Christmas Day, and several local parish festivals.

What Is the Minimum Wage and Average Salary in Andorra?

The national minimum wage in Andorra is approximately €1,525.33 per month as of 1 January 2026, equivalent to roughly €8.80 per hour. The figure is reviewed and adjusted annually by the Andorran Government in response to inflation and cost-of-living conditions.

Salaries are paid monthly through bank transfer in Euros, typically on the last working day of the month. A 13th-month salary is not legally required in Andorra, although performance bonuses are commonly offered in the banking, finance, and tourism sectors as retention incentives.

How Do Taxes and Social Contributions Work in Andorra?

Andorra requires both employers and employees to contribute to social security, and personal income tax is withheld at source by the employer.

Employee Income Tax

Social Security and Health Contributions

Note: Contributions are calculated on gross salary up to a statutory ceiling where applicable. Rates are reviewed periodically.

What Are the Mandatory Employee Benefits in Andorra?

All employees in Andorra are entitled to statutory benefits under the labour code, and many employers add supplementary benefits to attract top talent.

How Do Termination and Severance Work in Andorra?

Termination rules in Andorra depend on the employee's tenure. The labour code strictly defines notice periods and severance pay.

Notice Periods by Tenure

Severance Pay

Legal Grounds for Termination

Employment in Andorra can be terminated by mutual agreement, voluntary resignation, the natural expiration of a fixed-term contract, just cause due to serious misconduct, or economic and organisational reasons, with proper notice.

Protected Categories

Andorra labour law offers special protection against termination for pregnant employees, employees on maternity or paternity leave, employees on sick leave, and trade union representatives.

What Are the Work Permit and Visa Requirements in Andorra?

Foreign nationals who are not citizens of Spain, France, or Portugal generally require a residence and work permit (autorització de residència i treball) to work legally in Andorra. The permit is issued by the Andorran Government's Immigration Service and is closely tied to annual quotas set by the authorities.

Processing typically takes between 30 and 90 days, depending on quota availability and documentation, depending on documentation and administrative workload. Andorra is not part of the European Union, so EU citizens still require a residence and work permit. Citizens of Spain, France, and Portugal benefit from preferential procedures under bilateral agreements.

How Do You Hire in Andorra Through an EOR?

The hiring process through an Employer of Record typically follows five clear stages, from candidate selection to ongoing compliance management.

Should You Set Up a Local Entity in Andorra Instead?

For companies with significant long-term investment plans in Andorra, establishing a local entity may be a viable alternative to using an EOR.

Setting up an SL in Andorra typically takes four to eight weeks. The minimum share capital is €3,000 for an SL and €60,000 for an SA. Foreign investors must obtain prior authorisation from the Andorran Government for ownership above 10%. For companies planning to hire fewer than 10 employees, using an EOR is generally faster, more cost-effective, and less administratively complex.

EOR vs Local Entity vs Contractor — Which Is Right for You?

Comparing the three main hiring models helps you choose the right approach for your Andorra workforce.

What Common Hiring Mistakes Should You Avoid in Andorra?

Companies new to hiring in Andorra often encounter several common pitfalls. Misclassifying employees as independent contractors is a significant risk, as Andorra has clear legal distinctions between the two, and reclassification can lead to penalties and back payments.

Failing to issue written employment contracts in Catalan is another frequent error, as verbal or foreign-language agreements may not be legally enforceable. Ignoring collective bargaining agreements in regulated sectors can lead to compliance issues, as can miscalculating social security contributions since rates and ceilings are periodically updated.

Skipping proper documentation of probation periods can inadvertently extend employee protections beyond what the employer intended. Finally, providing inadequate notice of termination or failing to follow proper dismissal procedures can expose companies to compensation claims and legal disputes.

Which Industries Are Hiring Most in Andorra?

Several key industries drive Andorra's labour market, each offering a distinct talent pool for international employers.

Are you an Employer of Record (EOR) provider looking to expand your reach in Andorra?

We help EOR companies increase their visibility and generate real business opportunities by featuring them on our platform through:

• Company listings
• Dedicated SEO-optimised articles
• Sponsored content & brand features
• Andorra-focused landing pages
• Social media promotion targeting regional and international audiences

Our audience includes businesses, startups, and HR professionals actively exploring hiring solutions in Andorra and Southern Europe — giving your brand direct access to decision-makers ready to expand their teams.

By partnering with us, you can:

1. Position your company in Andorra's growing hiring market
2. Connect with companies looking to hire local and international talent
3. Showcase your EOR services, compliance support, and expertise
4. Generate qualified leads from businesses entering the Andorra market
5. Build trust and authority through targeted, high-quality content
6. Expand your presence in Southern Europe and the wider region

Andorra is becoming an attractive destination for global hiring — making it a strong opportunity for EOR providers.

Disclaimer

This guide is provided for educational and informational purposes only. Andorra's labour laws, tax rates, and social contribution percentages are subject to change. Always consult a qualified Employer of Record provider, local legal counsel, or certified tax advisor before making hiring or employment decisions in Andorra.