Country Payroll Guide Azerbaijan

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Key Facts

Capital
Baku
Date format
dd/mm/yyyy
Currency
Azerbaijani Manat (AZN)
VAT
the standard rate is 18%

Contributions

Employers

Social Security
Social Security for Oil & Gas Industry - 22%
Unemployment
Unemployment - 0.5%
Mandatory Medical Insurance
Mandatory Medical Insurance - 2%
Total Employment Cost
Total Employment Cost - 24.5%

Employees

Social Security
Social Security for Oil & Gas Industry - 3%
Unemployment
Unemployment - 0.5%
Mandatory Medical Insurance
Mandatory Medical Insurance - 2%
Total Employee Cost
Total Employee Cost - 5.5%

Minimum Wage

The minimum wage in Azerbaijan is 250 AZN per month.

Payroll

Payroll Cycle
Monthly
13th Salary

No 13th salary.

Income Tax

Employee Income Tax (1)
Less than 2500 AZN - 14%
Employee Income Tax (2)
Over 2500 AZN - 25%

Working Hours

General Working Hours

40 hours per week.

Overtime

Overtime is paid at the rate of 200% of the normal salary.

Leave

Paid Time Off

The minimum annual leave entitlement is 21 days for employees over the age of 18.  In addition, depending on the number of years of employment, an employee is entitled to additional leave:

  • 5-10 years – additional 2 days of leave
  • 10-15 years – additional 4 days of leave
  • 15 or more years – 6 additional days of leave
Public Holidays

14 public holidays.

Sick Days

For the first 14 days of illness, it is the responsibility of the employer to pay sick leave compensation.  After 14 days, sick leave is paid by the State Social Protection Fund.  In order to receive this benefit, employees must be able to provide a medical certificate and can be extended by 3-6 day increments.

Maternity Leave

Women are entitled to a total of 126 days of maternity leave and can begin 70 days before the expected due date.  If the mother endured a difficult birth or the birth of more than one child, maternity leave can be extended for an additional 14 days.  Maternity leave is paid by the State Social Protection Fund. Compensation is 100% of the average monthly salary of the past 12 months.

Paternity Leave

Fathers can take 14 days of unpaid paternity leave following the birth of a child.

Parental Leave

In Azerbaijan, there are various stipulations for various parental rights: A pregnant woman or woman with a child under the age of three years old cannot be terminated. A pregnant woman or woman with a child under the age of 18 months old is entitled to a reduced work week.

The maximum number of hours permitted is 36. A pregnant woman or woman with a child under the age of 3 years old cannot be asked to work night shifts. A woman with two children under the age of 16 is entitled to two additional days of paid leave; a woman with three or more children under the age of 16 is entitled to five days of additional paid leave. A woman or single father with children under the age of 16 are entitled to 14 days of unpaid leave per year.

Termination

Termination Process

In general, termination of an employment contract in Azerbaijan is strict and must be carried out with the utmost care.  Labor laws for termination are in favor of the employee and any misstep can have major consequences for the employer. For employees who are terminated based on redundancy, three month’s severance pay is required.

Notice Period

When terminating an employment agreement due to downsizing, two months’ notice is required. During this period, the employee is able to take one day of paid time off per week for the purpose of finding new employment.

  • Less than one year of employment– two weeks’ notice
  • 1-5 years of employment- four weeks’ notice
  • 5-10 years of employment- six weeks’ notice
  • 10+ years of employment- nine weeks’ notice.

If the employee initiates the termination of the employment agreement, one months’ written notice is required.

Severance Pay
  • Less than one year – one month’s salary.
  • 1-5 years – 1.4 times the monthly salary.
  • 5-10 years – 1.7 times the monthly salary.
  • 10+ years – 2 times the monthly salary.

Termination pay: an additional two months’ salary must be given if:

  • Change in terms of employment was changed.
  • The employee is called for military service.
  • The employee can no longer perform their duties due to a permanent disability.

In the event that the employee’s employment is terminated due to death, three month’s allowance is given to their family members.

Probation Period

Up to three months.  During this time, either the employee or employer can cancel the employment agreement so long as three days’ notice is given.

Visa

Employment Visa

To live and work in Azerbaijan, foreign nationals will need both a temporary residence permit and a work permit. The duration is the same for each of these permits, and the required documents for both are submitted together.