Azerbaijan is often referred to as the “Land of Fire” due to its rich history of natural gas fires and the country’s association with fire worship.
Payroll and Benefits Guide - Azerbaijan
Fun Facts
Azerbaijan has a long history of oil production and is considered one of the birthplaces of the oil industry.
Yanar Dag, also known as the “Burning Mountain,”, is a natural wonder located near Baku.
Home to the largest number of mud volcanoes in the world.
Rich cultural heritage influenced by Europe and Asia.
Azerbaijani has tons of carpets and rug artists.
Contributions
Employee Payroll Tax
| Contribution Type | Rate |
| Social Security | 3.00% |
| Unemployment | 0.50% |
| Medical Insurance | 2.00% |
Employer Payroll Tax
| Contribution Type | Rate |
| Total Employment Cost | 22.00% |
Payroll
Payroll Cycle
Monthly salaries should be divided into two parts (advance and remaining portions of the wage) and paid to employees twice a month with an interval not exceeding 16 days.
13th Salary
There is no requirement for the 13th salary payment in Azerbaijan.
Work Hours and Week
Standard working hours are set for employees over the age of 18 at no more than 8 hours a day and 40 hours per week, with a working week set at five working days and two days off.
Overtime
No employee should be assigned to work overtime hours for more than two consecutive working days of more than four additional hours.
Leave
Paid Time Off
In Azerbaijan, the Minimum Annual Leave entitlement is 21 days for employees over the age of 18. This entitlement increases in line with the number of years of employment within a single company.
Public Holidays
There are 24 public holidays in Azerbaijan.
Sick Days
The employer will pay all missed wages for the first 14 days for sick workers; after that, the State Social Protection Fund will cover those costs. The employee is required to present a medical certificate in order to be eligible for the sick pay benefit.
Maternity Leave
Women are entitled to a total of 126 days of maternity leave, of which 56 days should be used after the baby is born and 70 days should be used before the child is expected to arrive.
Paternity Leave
Fathers are eligible for 14 days of unpaid paternity leave after a child is born.
Parental Leave
There are several requirements for parental rights, including additional time off if necessary.
Termination
Termination Process
An employment contract may be terminated under strict conditions in Azerbaijan. The last payment must be made no later than the last day of employment.
Notice Period
All employees must give at least one month’s notice, regardless of their length of service.
Severance Pay
An employee must receive at least three months’ worth of severance pay if they are let go due to redundancy.
Severance pay generally varies according to how long an employee has worked there.
Probation Period
Probation Period
The typical probationary period in Azerbaijan is up to three months. During this time, the employment contract is terminable with three days’ notice from either the employer or the employee.
Immigration
Foreigners who want to work in Azerbaijan must apply for a work permit through their employers with the State Migration Service of the Republic of Azerbaijan. A worker would need to obtain a new work permit several times throughout their employment because it can only be issued for periods of up to one year at a time.
VAT
18.00% is Azerbaijan’s standard VAT rate.