Many Georgian developers work for international companies using the Deel service. This platform facilitates the process of drawing up contracts and paying remuneration, but it is important to understand the tax implications of such work. In this article, let's look at how a Georgian IE developer can cooperate with Deel and what taxes he needs to pay.

What is Deel and how does it work?

Deel is a global HR platform that helps companies enter into contracts and pay salaries to employees and contractors around the world. For Georgian sole proprietorships, Deel can act as an intermediary in formalizing a contract with foreign clients and sending payments.

Working through Deel is possible in two formats:

1. As an Independent Contractor (Independent Contractor).
2. As an employee through Employer of Record (EOR).

These two options have different tax implications, so let's break them down in more detail.

1. Working through Deel as a sole proprietor (Independent Contractor)

✅ The best option for a Georgia developer.

• You enter into a contract for services with a client through Deel.
• The client company does not withhold taxes - you pay them yourself in Georgia.
• Payment is received into your bank account, PayPal or in cryptocurrency.

What taxes does a sole proprietorship pay?

If you have “Small Business” status, the tax rate is: ✔ 1% of turnover (if income up to 500,000 GEL per year). ✔ 3% of turnover if income exceeds GEL 500,000.

❌ No payroll tax (20%) - because it is not an employment contract. ❌ No mandatory pension and social contributions.

⚠ What is important to stipulate in the contract?

• The contract must be called a Service Agreement or Independent Contractor Agreement.
• It must state that you pay your own taxes.
• It must state that it is a service and not an employment relationship (to avoid the risk of being taxed as an employee).

2. Working through Deel as an employee (Employer of Record – EOR)

❌ Not a favorable option from a tax perspective.

• Deel signs you up as an employee and withholds taxes from your paycheck.
• You are paid a salary instead of income from services.
• In this case, the Georgia Department of Revenue may consider you an employee, in which case your taxes will be much higher.

What taxes does the employee pay through the Deel EOR?

✔ 20% - income tax (personal income tax). ✔ 2% - pension contributions (if not opted out). ✔ 4-5 % - social contributions.

🔴 Instead of 1% tax, as in the case of a sole proprietorship, you will pay about 26-27% of taxes. 🔴 Deel can withhold taxes automatically, which increases the financial burden.

📌 Conclusion: it is better to avoid working through Deel EOR and contract as an independent contractor.

How do I get money through Deel?

An IP developer in Georgia may receive payment through:

• SWIFT-transfers (to Georgian bank account in USD, EUR, GEL).
• PayPal (but withdrawal will require Payoneer or VISA card).
• Cryptocurrency (via Binance, Coinbase and other platforms).

📢 Need help registering a sole proprietorship or optimizing your taxes?

ESPERO Law Company specializes in business registration and support in Georgia. We will help you: ✔ Register a sole proprietorship and choose a favorable tax system. ✔ Prepare the right contract to work through Deel. ✔ Set up to receive payments and reduce tax risks. ✔ Avoid mistakes that could lead to additional tax.

📩 Contact us right now - we will optimize your business and help you work legally!