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The Principality of Andorra is a small country in southwestern Europe that lies between France and Spain, in the eastern part of the Pyrenees Mountains. Andorra thrives because of the many tourists who visit it, as well as because of the low taxes attracting many investors. The country is part of the Catalan community along with parts of Spain and France.
Andorrans represent a small part of the population of their own country – only about 33% of the inhabitants. The largest group of foreigners are Spaniards (43%), followed by Portuguese 11% and French – 7%. The remaining 6% belong to several other nationalities.
The population of Andorra is 85,560 people, with a population of about 23,000 inhabitants in the capital Andorra la Vella.
The official language is Catalan, also spoken in the neighboring Spanish autonomous region of Catalonia, with which the culture of Andorra has many common features. Spanish, Portuguese and French are also used.
Tourism is at the heart of the small Andorran economy, providing almost 80% of the country’s GDP. Approximately 9 million tourists annually visit Andorra, attracted by the country’s duty-free situation and its summer and winter resorts.
Andorra is not a member of the European Union (EU), but maintains a special relationship with it – for example, it has no tariffs on EU industrial goods and uses the European currency, the euro.
In this episode, we will look at minimum and average earnings, the variety of professions and the way salaries are distributed across regions. Also, we will look at income and cost of living taxes in the Principality of Andorra.
Minimum wage
The minimum gross monthly wage in Andorra in 2024 is €1,086 and the amount has been increased by 3.2% from 2023 to tackle inflation.
Average salary
The average gross monthly salary in Andorra is about €2,400. Of course, average salaries vary depending on profession, experience, education and sector. Tourism-related professions are often key in the economy.
The most paid professions are in areas such as archiology and history.
Distribution of wages by occupation
Let’s take a closer look at the average salary values per profession per month in Andorra:
Doctor – 3 100 €
Insurer – 2 700 €
IT – 3 900 €
Accountant – 3 400 €
Human Resources Specialist – 3 100 €
Teacher – 3 100 €
Lawyer – 2 500 €
Tourism 2 400 €
Seller – 2 000 €
Builder – 2 500 €
Income taxes
Andorra has a relatively simple tax system compared to other European countries. The main taxes paid in Andorra are:
1. Income tax:
Tax rates range from 0% to 10%.
A tax-free minimum is €24,000 per year.
Interest tax: 10%.
Tax on dividends: 10%.
2. Value added tax (VAT):
Standard rate: 21%.
Reduced rate: 4% (for certain goods and services).
3. Immovable property tax:
Annual tax: 0.25% – 1.5% of the value of the property.
4. Real estate transfer tax:
4% – 5% of the purchase price.
Cost of living
If you are considering moving to the Principality of Andorra, the different costs I will choose will help you make an informed decision about the costs associated with moving and living in this part of Europe.
Cost of housing in Andorra
Andorra has a wide variety of well-built dwellings – from houses and villas to apartments. Compared to many other countries in Europe, housing in Andorra is very affordable.
One-bedroom apartment outside the city center: €550 – €800
Expenditure on food, groceries and restaurants
Cheap restaurant: €10 – €20
Homebrew: €1.30 – €3.17
Coca-cola/pepsi: €1.50 – €2
1L milk: €0.70 – €1.10
Bread: €0.90 – €1.28
12 eggs: €1.50 – €2.40
1 kg chicken fillet: €7.65 – €10
1 kg of beef: €7.51 – €18
1 kg apples: €1.00 – €2.75
1 kg white rice: €1.00 – €2.80
Transport
Andorra is located between France and Spain and has a great road network that is served by bus services because there is no rail or airport.
one-way ticket (local transport)- €1.50 – €3
Monthly card – €30 – €50
Internet
Andorra offers excellent services in the field of the Internet. This is the responsibility of the national telecommunications company of Andorra – Andorra Telecom.
Expenses for clothing, personal belongings, fitness and leisure
Pair of jeans (Levi’s 501 or similar): €65 – €100
Summer dress: €15 – €50
Running shoes (sneakers): €70 – €130
Business shoes: €60 – €175
Gym membership: €25 – €75
Cinema (cinema) ticket: €6 – €9
Short visit to the doctor (15 minutes) – €67
Deodorant: €3.60
Toilet rolls: €3.24
Shampoo: €2.94