Overview

Capital
Baku
Currency
Azerbaijani Manat
Date Format
dd/mm/yyyy

calendar icon Public holidays calendar

Taxes

Employer
22.00% - Social Security
0.5% - Unemployment
0.2%-2.0% - Accident Insurance
Employee
3.00% - Social Security
14.00% - Wage Tax for monthly salaries below 2,500 AZN
350 AZN + 25% of anything above 2,500 AZN - Wage tax for monthly salaries above 2,500 AZN

Minimum Wage

General

The monthly minimum wage is 250 AZN.

Payroll Contributions

Social Security

Social security is comprised of pension, disability, and health insurance.  The employer contributes 22% and the employee contributes 3% of the gross salary.  

Unemployment Insurance

Both employee and employer contribute 0.5% of the gross salary towards unemployment.  

Leave

Public Holidays

There are 14 public holidays in Azerbaijan. 

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 rate 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 3 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 2 children under the age of 16 is entitled to 2 additional days of paid leave; a woman with 3 or more children under the age of 16 is entitled to 5 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.     

Notice Period

When terminating an employment agreement due to downsizing, 2 months’ notice is required. During this 2 month period, the employee is able to take one day of paid time off per week for the purpose of finding new employment.

  • Less than 1 year of employment- 2 weeks’ notice
  • 1-5 years of employment- 4 weeks’ notice
  • 5-10 years of employment- 6 weeks’ notice
  • 10+ years of employment- 9 weeks’ notice.

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

Severance Pay

Severance pay varies depending on the length the employee has been employed:

  • Less than 1 year – 1 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

Termination pay- in addition to severance pay, an additional 2 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, 3 month’s allowance is given to their family members. 

Probation Period

The probation period can last up to 3 months.  During this time, either the employee or employer can cancel the employment agreement so long as 3 days’ notice is given.   

VAT

General

The standard rate is 18%