Employer Payroll Tax
Employee Payroll Taxes
Employee Income Tax
The monthly minimum wage is 250 AZN.
The payroll cycle is monthly.
A full work week in Azerbaijan is 40 hours for employees over the age of 18.
Overtime is paid at the rate of 200% of the normal salary.
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.
There are 14 public holidays in Azerbaijan.
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.
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.
Fathers can take 14 days of unpaid paternity leave following the birth of a child.
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.
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.
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 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.
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.
The standard VAT rate is 18%