Summary
Andorra has one of the lowest income tax burdens in Europe. The principality introduced personal income tax (IRPF - Impost sobre la Renda de les Persones Fisiques) only in 2015, with a generous tax-free allowance and a maximum rate of just 10%. Employees also contribute to the CASS (Caixa Andorrana de Seguretat Social) social security system, which covers healthcare and retirement benefits.
How it works
Your take-home pay is your gross salary minus two main deductions:
- IRPF (income tax) - progressive rates across three bands, with the first €24,000 completely tax-free
- CASS social security contributions - employee contributions totalling 6.5% of gross salary
Andorra’s tax system is deliberately simple compared to neighbouring Spain and France, making it an attractive jurisdiction for high earners. There are no municipal or regional income taxes on top of the IRPF.
Income Tax Bands (2025)
Andorra’s IRPF uses three marginal bands:
| Taxable income | Marginal rate |
|---|---|
| Up to €24,000 | 0% |
| €24,001 - €40,000 | 5% |
| Above €40,000 | 10% |
These are marginal rates - you only pay the higher rate on income within each band, not on your entire salary. The €24,000 tax-free threshold means that many lower-income workers pay no income tax at all.
Social Security Contributions
Employee CASS contributions have two components:
| Component | Employee rate |
|---|---|
| General branch (cotitzacio general) | 3.0% |
| Retirement branch (cotitzacio jubilacio) | 3.5% |
| Total employee rate | 6.5% |
These rates apply to the employee’s gross salary. The employer also contributes a separate amount (approximately 15.5%) which is not deducted from the employee’s pay.
The formula
Where
Worked example
EUR 35,000 gross annual salary
CASS social security (6.5% of gross)
= EUR 2,275
First EUR 24,000 at 0%
= EUR 0
Remaining EUR 11,000 (EUR 24,001 - EUR 35,000) at 5%
= EUR 550
Total IRPF
= EUR 550
Total deductions
= EUR 2,825
Result
Take-home pay = EUR 35,000 - EUR 2,825 = EUR 32,175/year (EUR 2,681/month)
Assumptions & limitations
- Uses the standard IRPF bands for resident employees - non-residents may face different withholding rules
- Assumes a single taxpayer with no dependants or special deductions
- Does not model employer CASS contributions (approximately 15.5% of gross, but not deducted from the employee’s salary)
- CASS contribution rates shown are the employee portion only
- Does not account for any voluntary pension or additional savings deductions
- Assumes salaried employment under the general social security regime - self-employed workers (treballadors per compte propi) have a different contribution structure