Social Security & Pension System – Armenia

If monthly gross salary AMD 500,000 or less: contribute 5% to funded pension. Applies only to those born after January 1, 1974. Those born before 1974 exempt from pension contributions. Withheld by employer monthly.

If monthly gross salary exceeds AMD 500,000: contribute 10% of gross minus AMD 25,000. Maximum contribution capped at AMD 87,500 per month (at salary AMD 1,125,000). Progressive structure but still reasonable. Example: AMD 800,000 salary = AMD 55,000 contribution.

Fixed monthly contribution to defense fund. Updated December 2025: AMD 1,000 if monthly salary up to AMD 1,000,000. AMD 15,000 if monthly salary exceeds AMD 1,000,001. Applies to all employees. Not income-based percentage - flat amounts.

Mandatory health insurance contributions apply to entrepreneurs whose annual gross income exceeds AMD 2,400,001 (tax year 2025 onwards). Employees' healthcare financed from general taxation. Separate system for self-employed.

Employers in private sector pay zero social security contributions. Massive cost saving compared to most countries. Employer only responsible for withholding and remitting employee contributions. Government co-finances pensions from state budget. Extremely competitive labor costs.

Employers must correctly calculate and withhold income tax (20%), pension contributions (5-10%), and military stamp duty. Must file monthly by 20th of following month via State Revenue Committee e-portal. Penalties for errors or delays.

Must maintain detailed payroll records, employment contracts, calculation worksheets, proof of payments. Monthly filings must include employee identifiers, gross income, all withholdings. Prepare for potential audits. Professional payroll software recommended.

Late payment of withheld taxes accrues interest at 0.075% per day. Compounds quickly. Strict enforcement. Must pay by 20th of following month without exception. Significant penalties can accumulate fast if non-compliant.

Old-age pension based on years of service, not contribution amount. Age 63 with 25 years coverage standard. Early retirement at 59 with 25 years including arduous work. Financed from general taxation. Amount determined by seniority years. Social safety net.

Mandatory individual accounts for those born after 1974. Contributions invested by chosen asset manager. Two options: C-Quadrat Ampega, Talanx/Amundi-Acba. Participants choose manager and investment policy. Modern defined-contribution system. Assets grow over time.

Minimum pension for those without required service years. Not based on contributions. Funded from state budget. Ensures minimum income for all elderly. Provides basic social protection. Small fixed amount.

Voluntary funded pension contributions allowed up to 7.5% of salary. Tax deductible - reduces taxable income. Encourages additional retirement savings. Provides flexibility beyond mandatory system. Good for high earners wanting more pension.

Healthcare benefits financed from general taxation, not direct contributions. Universal coverage for residents. Public health system available. Many employers provide supplemental private health insurance as benefit. Quality improving but many use private insurance.

Employees entitled to sick leave with compensation. Based on medical certification. Employer covers initial period. Longer-term leave may be supported through social security. Protects employee health and income during illness.

Female employees receive 140 days maternity leave, extended for complications or multiple births. Paid through social security based on salary and contribution history. 70 days before birth, 70 days after. Comprehensive protection. Additional unpaid leave available.

Unemployment benefits available through social assistance system. Coverage and amounts vary. Must register as job seeker. Not as generous as Western European countries but provides safety net. Encourages return to employment.