Income tax

Personal income tax in Georgia is about as simple as a tax gets. Employment income is charged at a single flat 20% rate — the same share whether you earn a modest wage or a large one. There are no brackets, no progressive bands, and no basic tax-free allowance for standard employment: the first lari you earn is taxed at the same 20% as the last. That flat design is what lets a calculator show you a clean, predictable take-home figure.

One rate, no brackets, no allowance

The flat rate lives in Article 81 of the Tax Code of Georgia, which taxes a natural person’s taxable income at 20% unless the Code provides otherwise. For ordinary salaried work it does not provide otherwise — so employment income simply meets one rate. Unlike most European systems, there is no zero-rated band at the bottom and no higher band at the top. This is why net pay in Georgia tracks gross so tightly: once you know the rate and the pension contribution, you know your net.

The taxable base is gross minus the pension

There is one subtlety worth getting right, and it is the single most important thing on this page. If you are enrolled in the funded pension, the 20% tax is not charged on your whole gross. Your 2% employee pension contribution is first subtracted, and only what remains — gross minus that contribution — is the taxable base. The contribution is exempt from income tax under Article 82 of the Tax Code, so the tax is assessed on the smaller figure.

Take the Pension Agency’s own worked example. On a gross of 1,000 GEL, the 2% pension contribution (20 GEL) comes off first, leaving 980. The 20% tax is charged on that 980, not on the full 1,000 — which is 196 in tax — so the employee receives 784 in hand. Because the pension is carved out of the base, the effective income-tax burden works out to 19,6% of gross, a shade under the headline rate, and an enrolled employee keeps 78,4% of gross rather than the round 78% a naïve subtraction would suggest. If you opt out of the pension, the tax is charged on the full gross and you keep 80%.

Withheld at source by your employer

You almost never pay this tax yourself. Your employer acts as tax agent under the Tax Code: it calculates the tax, withholds it straight from your pay, and remits it to the revenue service — by the fifteenth of the following month — so what lands in your account is already net. For most employees there is no annual return to file for salary income; the withholding settles it. That is the flip side of the flat rate — the arithmetic is simple enough that it can be handled at source every month without a year-end reconciliation.

Special-category exemptions (out of scope here)

Article 82 does grant income-tax relief to a handful of special categories — for example disabled war veterans, people with disabilities since childhood, low-income mothers of three or more minor children, and permanent residents of high-mountainous settlements. These reliefs are capped and depend on personal status rather than on how much you earn, so this calculator does not model them: it assumes standard dependent employment with no personal exemption. If one of those statuses applies to you, your own tax will be lower than the figure shown here, and you should check the exact terms against the Tax Code.

What this means for your payslip

Put together, the picture is short. Start from your gross. If you are enrolled in the pension, subtract the 2% contribution; then charge 20% on what is left. There is no social-security payroll tax, no health or unemployment deduction, and no church or solidarity tax layered on top — the pension and the flat income tax are the whole story for a standard salary. The calculator does exactly that subtraction and shows each line, so you can see how gross becomes net rather than take a single number on trust.

The full content of this page is still in preparation and subject to review.