What should I know about hiring in Azerbaijan?
Hiring from Azerbaijan can help your business reach the next level. However, there are a few things to consider before you start hiring from the country bounded by the Caspian Sea and the Caucasus Mountains. Employers must strictly follow the labor legislation of Azerbaijan, taking into account work standards, annual leave, minimum salary, work hours, compensation and termination conditions, which are regulated by the Employment Code of Azerbaijan.
With the rise of remote work, employers have to ensure their employment contracts will be compliant with Azeri legislation. The easiest and fastest way to hire an Azeri employee without opening a separate entity is through an employer of record provider like Native Teams.
Why is Azerbaijan a good choice for finding remote employees?
Azerbaijan is a beautiful country in the Caucasus region with rising remote work talent. It makes it a perfect place for hiring remote workers, because of its strategic location, great education system and booming economy.
How can Native Teams Help you hire in Azerbaijan
If you want to start hiring people from Azerbaijan, you must either own a legal entity in the country or use a global employment solutions provider. Setting up a new business entity abroad can be extremely costly and time-consuming, especially if you’re not already familiar with the local laws and regulations.
Native Teams can help you hire talent from Azerbaijan through our employer of record services as well as handle payroll, taxes, benefits and overall compliance of your global team.
Hire your first Azeri employee with Native Teams.
Legal requirements for hiring in Azerbaijan
The minimum salary in Azerbaijan is currently AZN 300 (roughly $170). The rate is nationwide, however, the salaries in Baku are considerably higher.
Contributions & taxes
For the employees of the oil and gas industry as well as governmental sectors, the standard rates apply:
- Employee: 3%
- Employer: 22%
All foreign employees are also subject to social security contributions at these rates, except persons with diplomatic status or expatriate employees working under PSAs.
For entrepreneurs, the social security contributions apply at rates that depend on the type of activities and the region of operation.
The employer must pay social contributions equal to 22% of the employee’s salary, including bonuses. That applies to income up to AZN 200 plus 15% for any amount above that.
The corporate income tax is based on the company’s net income, normally calculated within one business year. The benchmark used refers to the highest rate of corporate income. Revenues from the corporate tax rate are an important source of income for the government of Azerbaijan.
In Azerbaijan, the employee’s social security contributions are 3% of the employee’s salary for income up to AZN 200 plus 10% on any amount beyond that. For employees in the oil and gas and government sectors, the rate is 3%. The contribution is paid directly to the Social Protection Fund (SPF).
The personal Income Tax is collected from individuals in Azerbaijan and enforced on different sources like labour, pension, interest and dividends.
To calculate the salary and taxes in Azerbaijan please click here.
In accordance with the Labor Code of Azerbaijan (LCA), monthly wages are divided into two parts – advance and remaining portions of the wage. They are paid to employees twice a month, and the intervals between payouts cannot exceed 16 days.
Is there a 13th salary in Azerbaijan?
A 13th salary is not a requirement in Azerbaijan. Employers can pay it as a benefit or bonus for their employees.
For Azeri employees who are older than 18 years, the standard working hours are 8 hours per day and 40 hours per week. The working week is set to 5 working days and 2 days off.
In certain industries, the employer may opt for a six-day working week. In this case, the daily working time cannot exceed 7 hours (if the weekly total is 40 hours), 6 hours (if the weekly total is 36 hours), or 4 hours (if the weekly total is 24 hours) a day.
Overtime is the additional time to the employee’s contracted working hours. In Azerbaijan, no employee should be assigned to work overtime for more than two consecutive days of more than four additional hours. In workplaces with harmful and difficult conditions, employees can only do extra two hours of overtime.
Probation period rules
A probation period of a maximum of 3 months can be put in place in Azerbaijan. During this period, the employee or employer can cancel the employment agreement with three days’ notice.
Employees must give at least one month’s notice, no matter how long their service was. Depending on the contractual agreement, the notice period may be increased to six months.
Employees who are terminated because of redundancy are entitled to a minimum of 3 months of severance pay. The amount of severance pay depends on the length of service; if the employee has been employed for one year, then they are entitled to one month’s salary pay. If the employee has been employed between one and 5 years, then they’re entitled to 4 monthly salaries.
Leave and benefits rules
Azerbaijan celebrates 14 public holidays:
- New Year
- Martyrs’ Day
- Women’s Day
- Novruz (Persian New Year)
- Victory Day
- Ramazan Bayrami
- Republic Day
- National Salvation Day
- Armed Forces Day
- Gurban Bayrami
- Independence Day
- Flag Day
- Constitution Day
- Solidarity Day of World Azerbaijanis
Employees in Azerbaijan have the right to sick leave. For the first 14 days of sickness, the leave is paid fully by the employer and afterward, the State Social Protection Fund will take over the compensation.
Pregnant employees are entitled to 126 days of maternity leave, of which 70 days are to be taken prior to the delivery and 56 days after. In case of multiple births or a difficult delivery, the leave can be extended for an additional 14 days.
Maternity leave is fully covered by the State Social Protection Fund and is calculated at 100% of the average of the previous 12 months’ salary payments.
Pregnant females or females with young children are also covered under special circumstances in relation to employment law, the main clauses include:
- A pregnant woman or a 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 hours a week.
- A pregnant woman or woman with a child under the age of 3 years old cannot be asked to work night shifts.
New dads in Azerbaijan can take 14 days of unpaid paternity leave.
Other leave (marriage, bereavement, exam leave)
Azerbaijani employees who are studying are entitled to study leave to participate in classes or other school activities. During this period, the employee is paid their average salary.
Employees who are blood donors are given an additional day’s leave with an average salary; this day is normally added to the annual leave entitlement.
Health security & private insurance
*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*
Relocation and work permits
Native Teams will act as your Employer of Record and apply for your work permit in the country. You will be able to upload all the needed documents in our app. Native Teams will support you by giving you regular updates on the progress until you get your work and residence permit.
How long is the visa/work permit process?
Usually, it takes 2 to 4 weeks to get a work permit, depending on the authorities and provided documents.
Which documents do you need?
Why use Native Teams for hiring in Azerbaijan?
Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:
- No paperwork: We will handle all the necessary paperwork for you.
- Save on taxes: We help you handle your taxes.
- No company set up: You can expand your business using our company entitles.
- Online onboarding: We’re here to ensure your onboarding process is trouble-free.
- No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
- Increase your profit: We assist you in growing your business and maximizing your profits.
- Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
- Local support: We can assist you in understanding and complying with the relevant local laws.