Georgia’s funded pension system has become an important part of the country’s tax and employment framework. Since its introduction, every employer and employee has been responsible for mandatory contributions. However, many business owners and individuals are still unsure about how the pension tax works, what the penalties are for late payment, and how to remain fully compliant.
At Caucasus Translations we often assist clients who need official translations, notarizations, and apostille services for tax, pension, and legal documents. This article explains the main requirements and penalties associated with the Georgian pension tax system.
What is the Pension Tax in Georgia
Since January 1 2019, participation in the funded pension scheme has been mandatory for all employed and self-employed individuals under the retirement age.
The contribution is divided among three parties
The employee contributes 2% of the gross salary.
The employer contributes 2% of the employee’s gross salary.
The state contributes 2% for annual income up to GEL 24,000, 1% for income between GEL 24,000 and GEL 60,000, and nothing for higher incomes.
For international employees or companies registering in Georgia, it is important that employment contracts and tax declarations clearly reflect these percentages. If your documents are in another language, certified translation or apostille legalization may be required before submission.
Payment Deadlines and Reporting Norms
Starting from May 1 2025, employers must submit pension contributions by the 15th day of the month following the salary payment. Contributions are declared through the income tax declaration system, and pension obligations are automatically reconciled if the correct amount is paid on time.
For salaries or payments made before May 2025, contributions continue to be processed through the Electronic Pension Contributions administration system.
Late submissions or mismatched declarations can trigger both interest charges and monetary penalties.
Penalties for Non-Payment or Delays
Under Georgia’s updated Law on Funded Pension (Law No. 4312-XIV):
A GEL 500 fine applies for the first violation, for example, failure to deposit the contribution on time.
A GEL 1,000 fine applies for repeated violations within a year.
In addition, penalty interest accrues based on the National Bank of Georgia’s monetary policy rate for each day of delay.
Employers are therefore encouraged to maintain accurate payroll records and ensure timely transfers to the Pension Agency’s nominee account. It is also advisable to keep proof of all payments and bank receipts. If a technical issue prevents your payment from being processed on time, official evidence can help you avoid fines.
Before You Pay: Key Points to Remember
Always check that your income tax declaration matches your pension contribution. Otherwise, the system will not close the obligation automatically. Make sure your pension declaration account has sufficient funds before the 15th day of each month. If you are self-employed or manage a foreign company branch, consult a local accountant to ensure correct reporting procedures in Georgia.
How Caucasus Translations Can Help
Whether you are an expat employee, a foreign company, or a local entrepreneur, Caucasus Translations can assist with all documentation related to pension and tax compliance in Georgia.
We offer certified translation of contracts, tax statements, and pension agency forms, as well as apostille and legalization of documents for international use. Our courier delivery service ensures fast and secure delivery of translated and legalized papers directly to your office or government institution.
Our professional team provides reliable service in Georgian, English, Russian, and other languages, ensuring your paperwork meets the standards of the Revenue Service and the Pension Agency of Georgia.
For assistance with translation, apostillization, or document delivery, contact Caucasus Translations today to make sure your pension-related documents are accurate, properly translated, and legally valid.