Armenia Social Contributions Guide 2026

Overview — Armenia's Cumulative Pension System

Armenia introduced a mandatory cumulative pension system in 2014, replacing the previous pay-as-you-go system for certain groups of workers. The system requires employees born after 1 January 1974 to contribute 5% of their gross monthly salary to a personal pension account. Employers must contribute an additional 7.5% on behalf of these employees. The total contribution of 12.5% is paid into the employee's individual pension account managed by a licensed pension fund manager. The system is designed to build a funded pension for retirement, supplementing the basic state pension. Employees born before 1 January 1974 remain under the old pay-as-you-go system and do not make mandatory contributions, though they may contribute voluntarily.

Contribution Rates — Employee & Employer

The mandatory cumulative pension contributions apply to employees born after 1 January 1974:

• Employee contribution — 5% of gross monthly salary
• Employer contribution — 7.5% of gross monthly salary
• Total — 12.5% of gross monthly salary

The employee's 5% contribution is deducted from gross salary before IIT is calculated. This means the pension contribution effectively reduces the IIT base, providing a small tax benefit. The employer's 7.5% contribution is an additional cost to the employer, paid on top of the gross salary. For an employee earning AMD 500,000/month, the employee contributes AMD 25,000, the employer contributes AMD 37,500, and AMD 62,500 total goes into the pension account each month.

Who Is Covered?

The mandatory cumulative pension system covers:

• Employees born after 1 January 1974 — mandatory participation for all employees (private and public sector)
• Self-employed individuals — may participate voluntarily
• Employers — must register with a pension fund manager and remit contributions monthly

Employees born before 1 January 1974 are not required to participate in the cumulative system. They remain entitled to the basic state pension funded through general tax revenues. However, they may voluntarily join the cumulative system and make contributions. Certain categories of workers (military personnel, law enforcement officers) have separate pension arrangements.

Pension Fund Management

Cumulative pension contributions are managed by licensed pension fund managers, which are private financial institutions supervised by the Central Bank of Armenia. Key features:

• Employees may choose their pension fund manager from the list of Central Bank-approved managers
• If no choice is made, the employee is defaulted to a manager selected by the government
• Funds are invested in a diversified portfolio (government securities, corporate bonds, listed shares, bank deposits)
• Management fees are capped by regulation (typically 0.5–1.5% of assets under management per year)
• Employees may switch fund managers once per year free of charge

Payment & Reporting

Employers must remit both the employee and employer pension contributions to the chosen pension fund manager by the 20th of the following month. The SRC oversees compliance and may conduct audits. Late remittance attracts penalties of 0.04% per day. Employers must provide employees with monthly contribution statements. Employees can monitor their pension account online through the Central Bank's pension registry system.

FAQs

Can I withdraw my cumulative pension contributions before retirement?

Generally, no. Contributions are locked until retirement age (63 for women, 65 for men). Exceptions include permanent disability, terminal illness, emigration from Armenia, or death (paid to heirs). Early withdrawal for other reasons is not permitted.

What happens to my pension if I change jobs?

Your pension account follows you. You keep the same fund manager and account number regardless of employer changes. The new employer simply continues contributing to your existing account.

Are self-employed individuals required to contribute?

Self-employed individuals are not required to contribute to the cumulative pension system but may do so voluntarily. They must register with a pension fund manager and make contributions directly.

Disclaimer

This guide provides general information about Armenian social contributions for the 2026 tax year. Pension laws and contribution rates may change. Always consult with a qualified Armenian financial advisor or the Central Bank of Armenia for advice specific to your situation. InvestmentKit does not provide tax or pension advice.