Overview

Capital
Baku
Currency
Azerbaijani Manat (AZN)
Date Format
dd/mm/yyyy

Taxes

Employer

Employer Payroll Tax

Oil and Gas Industry:
22.00%
Social Security
0.5%
Unemployment
2.0%
Mandatory Medical Insurance
*Private Sector:
2% up to 200 AZN; 15% above 200 AZN + 44 AZN
Social Security
0.5%
Unemployment
1% up to 8,000 AZN; 0.5% above AZN 8000 + 160 AZN
Mandatory Medical Insurance
*Rate for Private Sector employees lasts for 7 years, after which it is the same as for Oil and Gas Industry employees.
22.00% Total Employment Cost
Employee

Employee Payroll Taxes

Oil and Gas Industry:
3.0%
Social Security
0.5%
Unemployment
2.0%
Mandatory Medical Insurance
*Private Sector:
3.0% under 200 and 10% on excess of 200 AZN + 6 AZN
Social Security
0.5%
Unemployment
1% up to 8,000 AZN; 0.5% above AZN 8000 + 160 AZN
Mandatory Medical Insurance
*Rate for Private Sector employees lasts for 7 years, after which it is the same as for Oil and Gas Industry employees.
5.5% Total Employee Cost

Employee Income Tax

Oil and Gas Industry employees:
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
*Private Sector employees:
0%
Wage Tax for monthly salaries up to 8,000 AZN
350 AZN +14% in anything above 8,000 AZN
Wage Tax for monthly salaries above 8,000 AZN
*Rate for Private Sector employees lasts for 7 years, after which it is the same as for Oil and Gas Industry employees.
Employer Taxes
3 HIGHEST
3 LOWEST
Brazil
China
Slovakia
Azerbaijan
South Africa
Georgia
Macedonia
82.39%
41.12%
37.2%
22%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
Azerbaijan
Georgia
Belarus
Ukraine
45%
28%
27.65%
5.5%
2%
1%
0%

Minimum Wage

General

The monthly minimum wage is 250 AZN.

Minimum wage (per month)
$4000
$2663
$2491
$147
$47
$36.80
$2.33
Geneva
Luxembourg
Australia
Azerbaijan
Malawi
Angola
Venezuela
3 HIGHEST
3 LOWEST

Payroll

Payroll Cycle

The payroll cycle is monthly.

Working Hours

General

A full work week in Azerbaijan is 40 hours for employees over the age of 18.   

Overtime

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

Leave

Paid Time Off

In Azerbaijan, 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  

Annual leave can be broken down to multiple leave periods, however, one of the leave periods must be 2 weeks in length.

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Brazil
Peru
Albania
Azerbaijan
Michigan
China
Federal
30
13
43
30
12
42
28
14
42
21
14
35
2
11
13
5
7
12
10
10
Public Holidays

There are 14 public holidays in Azerbaijan.

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.   

PAID MATERNITY LEAVE (DAYS)
410
365
365
126
45
30
0
Bulgaria
Serbia
Albania
Azerbaijan
United Arab Emirates
Tunisia
Federal
3 HIGHEST
3 LOWEST
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.   

For employees who are terminated based on redundancy, 3 month’s severance pay is required.   

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 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 VAT rate is 18%

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