Kazakhstan Employer Of Record (EOR) services.
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KAZAKHSTAN
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- Work Permits – General Regime
Issued by local governments within the yearly quota set by the Ministry of Labor and Social Protection.
The following categories are used to group all foreigners:
- Category 1: CEOs and deputy CEOs of companies
- Category 2: Leaders of divisions/departments
- Category 3: Professionals
- Category 4: Qualified workers
The number of foreign workers that a Kazakhstan employer/local host business may hire is constrained by what is known as the “ratio requirement” and should not exceed the following:
- 30% of the total number of employees in categories 1 and 2.
- 10% of the total number of employees in categories 3 and 4.
An employer is charged a state obligation for the granting or extension of the work permit. The amount of the duty is set by the government of Kazakhstan and is based on the nature of the employer’s company and the classification of the foreign worker.
The following durations are covered by a work permit issued under the general regime:
- Category 1: for a period of one, two, or three years with a one-year, two-year, or three-year extension
- Category 2: for a period of 12 months, with a 12-month extension every year, but no more than three times
- Category 3: for a period of 12 months, with a 12-month extension every year, but no more than three times
- Category 4: for a single 12-month period only.
- Intra-corporate transfer ( ICT )
Temporary movement of a foreign person from a legal organization based in a World Trade Organization (WTO) member state other than Kazakhstan to its local branches, subsidiaries, or representative offices.
Work Permits are given under ICT apart from the foreign labor quota and free of state fees.
All foreigners are divided into the following categories for the purposes of applying for a work permit under ICT: Specialists /Managers/Executives
The work permit under ICT is issued by the local authorities for the transfer period, but not for more than 3 years (36 months), with the option of a single 1-year extension (12 months).
However, the local host entity should first look for qualified applicants on the Kazakhstan labor market before employing a foreign specialist under ICT. Only if acceptable candidates cannot be identified should the local host entity apply for a work visa.
PAID TIME OFF
Annual Vacation
Unused vacation days can be redeemed.
Workers typically have a right to a minimum of 18 paid vacation days, which must be paid at least three days in advance of the start of the leave.
Sick
Each employee is given three days of sick time (six days for chronic illness). The monthly reimbursement rate serves as the foundation for the illness allowance rate.
Maternity
Maternity leave is permitted in Kazakhstan for a total of 126 days (70 days before and 56 days after the delivery of the baby). There is also the option of granting more unpaid time off.
Paternity
Generally unpaid paternity leave.
Family
N/A
National Holidays
There are 16 paid public holidays in Kazakhstan.
Other Paid Time Off
N/A
STATUTORY EMPLOYEE BENEFITS
Unemployment
Funded under Social security contributions.
Based on the insured’s average monthly covered earnings over the previous 24 months multiplied by the income replacement rate and the covered period rate, a monthly benefit is provided.
The rate of income replacement is 0.30.
The covered period rate is
- 0.7 for coverage that lasts at least six months but is less than twelve,
- 0.75 for coverage that lasts at least twelve months but is less than 24 months,
- 0.85 for coverage that lasts at least 24 months but is less than 36 months,
- 0.9 for coverage that lasts at least 48 months but is less than 60 months, and
- 1.0 for coverage that lasts at least 60 months.
The benefit’s length is determined by the insured’s coverage period.
Workers Compensation
A work-related illness or injury must be examined first.
Employer responsibility – The overall cost (pays yearly insurance premiums ranging from 0.04% to 9.9% of payroll or directly offers benefits to employees).
Employees get both the disability award and temporary disability payments straight from their employers. Benefits for social assistance are administered by regional departments.
Social Security
Employers are responsible for paying social tax at a rate of 9.5% on top of the employee’s gross wage for both local and foreign workers.
Employers are required to pay 3.5% in mandatory social insurance payments to the State Pension Center of Pension Payments.
Social tax deductions for mandatory social insurance contributions are restricted at 3.5% of 10 times the minimum monthly earnings every month.
Only residents of Kazakhstan who are nationals or who have a valid visa to enter the country and visitors from other countries who have a local job contract are required to purchase social insurance.
Retirement
OPC are deducted from employees’ gross pay at a rate of 10% and sent to the State Pension Center of Pension Payments.
The maximum gross income that is subject to OPC is 75 times the minimum monthly salary.
OPC only applies to Kazakh nationals and visitors with a valid visa to live there.
Those who are employed under a service agreement (performing services under a Civil Contract basis) should also submit an OPC to the State Pension Centre in their own best interest.
Moreover, the company must provide 5% of its own resources as OPC to workers who are subjected to hazardous (particularly hazardous) working circumstances.
Health
Employer’s OMIC will rise to a rate of 2% as of January 1, 2020.
All companies, including branches and representative offices, are required to pay OMIC for all of their workers, including Kazakh residents, foreigners with a residency permit in Kazakhstan, and nationals of other member nations.
The maximum monthly income that can be used to determine deductions and contributions is 10 times the minimum wage.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
Private workers’ compensation insurance is available.
Retirement
Private retirement schemes are also available in Kazakhstan.
Health
Private health insurance is available.
Insurance
Private life insurance is also available in Kazakhstan.
PERSONAL INCOME TAX
Tax Year
In Kazakhstan, the calendar year serves as the tax year.
Tax Tables
An individual’s yearly business income, which is calculated as gross income (without adjustments and deductions) less costs paid in generating that revenue, is subject to taxation.
The majority of personal income is subject to a single flat rate of 10% for residents (for non-residents 10-20%); only dividends earned in Kazakhstan are subject to a 5% rate.
Taxation Method
The majority of personal income is subject to a single flat rate of 10% for residents (for non-residents 10-20%).
Double Taxation
To prevent revenue from being taxed twice, Kazakhstan has signed double taxation agreements with a number of nations.
Residence Requirements
The number of days a person spends in Kazakhstan over the course of a tax year is used to assess tax residence. If an individual satisfies one of the following conditions, they are regarded as Kazakhstani tax residents:
- More than 183 days in a year are spent in Kazakhstan
- Has a permanent home in Kazakhstan and stays there for more than 120 days every year
- Is a Kazakhstan national who keeps a home in Kazakhstan but has relocated overseas permanently
If a person satisfies one of the aforementioned requirements, they are regarded as a tax resident of Kazakhstan for the whole calendar year and are liable for tax on their international income.
An individual is only subject to tax on income made in Kazakhstan if they do not fulfill the aforementioned requirements and are thus regarded as non-residents of Kazakhstan for tax purposes.
Payroll Calendars
Usually monthly.
Rebates & Tax Credits
Taxpayers in Kazakhstan are permitted to claim a tax credit in Kazakhstan for taxes paid abroad on their income from overseas sources. An individual must present a legalized certificate on income received and taxes paid abroad during the reporting period, issued or certified by the foreign tax authorities, in order to claim a tax credit in Kazakhstan for the amount of taxes paid abroad. When the annual tax return is submitted, this certificate must be present.
Health Insurance
Employer’s OMIC will rise to a rate of 2% as of January 1, 2020.
All companies, including branches and representative offices, are required to pay OMIC for all of their workers, including Kazakh residents, foreigners with a residency permit in Kazakhstan, and nationals of other member nations.
The maximum monthly income that can be used to determine deductions and contributions is 10 times the minimum wage.
Unemployment
Funded under Social security contributions.
Based on the insured’s average monthly covered earnings over the previous 24 months multiplied by the income replacement rate and the covered period rate, a monthly benefit is provided.
The rate of income replacement is 0.30.
The covered period rate is
- 0.7 for coverage that lasts at least six months but is less than twelve,
- 0.75 for coverage that lasts at least twelve months but is less than 24 months,
- 0.85 for coverage that lasts at least 24 months but is less than 36 months,
- 0.9 for coverage that lasts at least 48 months but is less than 60 months, and
- 1.0 for coverage that lasts at least 60 months.
The benefit’s length is determined by the insured’s coverage period.
Social Security
Employers are responsible for paying social tax at a rate of 9.5% on top of the employee’s gross wage for both local and foreign workers.
Employers are required to pay 3.5% in mandatory social insurance payments to the State Pension Center of Pension Payments.
Social tax deductions for mandatory social insurance contributions are restricted at 3.5% of 10 times the minimum monthly earnings every month.
Only residents of Kazakhstan who are nationals or who have a valid visa to enter the country and visitors from other countries who have a local job contract are required to purchase social insurance.
PAYROLL ELEMENTS
Income
In Kazakhstan, income includes:
- Employment income: salaries, wages, bonuses, and other benefits received from an employer.
- Business income: income earned by individuals who are self-employed or run their own businesses.
- Investment income: income from investments such as dividends, interest, and capital gains.
- Rental income: income earned from renting out property or assets.
Residents are subject to taxation on their global income.
No matter where the money is received, non-residents are only taxed on income within Kazakhstan.
Bonuses
Bonuses or 13th salaries are not mandatory.
Allowances
Not mandatory but can be included in employment contracts.
Benefits in Kind
Benefits in kind are not required in Kazakhstan, although businesses may include them in an employee’s remuneration package. Benefits in kind are non-cash perks that are given to employees in addition to their base pay and include things like corporate cars, housing, and health insurance.
Investment Income
Investment income includes income from dividends, interest, and capital gains and is taxable in Kazakhstan.
Retirement Funding
OPC are deducted from employees’ gross pay at a rate of 10% and sent to the State Pension Center of Pension Payments.
The maximum gross income that is subject to OPC is 75 times the minimum monthly salary.
OPC only applies to Kazakh nationals and visitors with a valid visa to live there.
Those who are employed under a service agreement (performing services under a Civil Contract basis) should also submit an OPC to the State Pension Centre in their own best interest.
Moreover, the company must provide 5% of its own resources as OPC to workers who are subjected to hazardous (particularly hazardous) working circumstances.
Health Insurance
Employer’s OMIC will rise to a rate of 2% as of January 1, 2020.
All companies, including branches and representative offices, are required to pay OMIC for all of their workers, including Kazakh residents, foreigners with a residency permit in Kazakhstan, and nationals of other member nations.
The maximum monthly income that can be used to determine deductions and contributions is 10 times the minimum wage.
Risk Insurance
Both individuals and corporations are not required to carry risk insurance in Kazakhstan.
Taxable Income
- Employment income: salaries, wages, bonuses, and other benefits received from an employer.
- Business income: income earned by individuals who are self-employed or run their own businesses.
- Investment income: income from investments such as dividends, interest, and capital gains.
- Rental income: income earned from renting out property or assets
Allowable Deductions
Obligatory and voluntary pension contributions are deductible as well as social security and taxes.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
Kazakhstan has a social tax of 11% which is paid yearly. The majority of personal income is subject to a single flat rate of 10% for residents (for non-residents 10-20%).
Unemployment
Funded under Social security contributions.
Based on the insured’s average monthly covered earnings over the previous 24 months multiplied by the income replacement rate and the covered period rate, a monthly benefit is provided.
The rate of income replacement is 0.30.
The covered period rate is
- 0.7 for coverage that lasts at least six months but is less than twelve,
- 0.75 for coverage that lasts at least twelve months but is less than 24 months,
- 0.85 for coverage that lasts at least 24 months but is less than 36 months,
- 0.9 for coverage that lasts at least 48 months but is less than 60 months, and
- 1.0 for coverage that lasts at least 60 months.
The benefit’s length is determined by the insured’s coverage period.
Social Security
Employers are responsible for paying social tax at a rate of 9.5% on top of the employee’s gross wage for both local and foreign workers.
Employers are required to pay 3.5% in mandatory social insurance payments to the State Pension Center of Pension Payments.
Social tax deductions for mandatory social insurance contributions are restricted at 3.5% of 10 times the minimum monthly earnings every month.
Only residents of Kazakhstan who are nationals or who have a valid visa to enter the country and visitors from other countries who have a local job contract are required to purchase social insurance.
Workers Compensation
A work-related illness or injury must be examined first.
Employer responsibility – The overall cost (pays yearly insurance premiums ranging from 0.04% to 9.9% of payroll or directly offers benefits to employees).
Employees get both the disability award and temporary disability payments straight from their employers. Benefits for social assistance are administered by regional departments.
ADMINISTRATION
Income
The majority of personal income is subject to a single flat rate of 10% for residents (for non-residents 10-20%).
Payroll Taxes
Kazakhstan has a social tax of 11% which is paid yearly. The majority of personal income is subject to a single flat rate of 10% for residents (for non-residents 10-20%).
Unemployment
Funded under Social security contributions.
Based on the insured’s average monthly covered earnings over the previous 24 months multiplied by the income replacement rate and the covered period rate, a monthly benefit is provided.
The rate of income replacement is 0.30.
The covered period rate is
- 0.7 for coverage that lasts at least six months but is less than twelve,
- 0.75 for coverage that lasts at least twelve months but is less than 24 months,
- 0.85 for coverage that lasts at least 24 months but is less than 36 months,
- 0.9 for coverage that lasts at least 48 months but is less than 60 months, and
- 1.0 for coverage that lasts at least 60 months.
The benefit’s length is determined by the insured’s coverage period.
Social Security
Employers are responsible for paying social tax at a rate of 9.5% on top of the employee’s gross wage for both local and foreign workers.
Employers are required to pay 3.5% in mandatory social insurance payments to the State Pension Center of Pension Payments.
Social tax deductions for mandatory social insurance contributions are restricted at 3.5% of 10 times the minimum monthly earnings every month.
Only residents of Kazakhstan who are nationals or who have a valid visa to enter the country and visitors from other countries who have a local job contract are required to purchase social insurance.
Workers Compensation
A work-related illness or injury must be examined first.
Employer responsibility – The overall cost (pays yearly insurance premiums ranging from 0.04% to 9.9% of payroll or directly offers benefits to employees).
Employees get both the disability award and temporary disability payments straight from their employers. Benefits for social assistance are administered by regional departments.
Statutory Benefits
These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period and severance pay.
Mandatory benefits also include social security benefits.
Employee Benefits
These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period and severance pay.
Mandatory benefits also include social security benefits.
LEGISLATION
Labor code – last amended in 2022.
STATUTORY BODIES
- Ministry of Labor and Social Protection of Population
- National Chamber of Entrepreneurs “Atameken”
- State Labor Inspectorate
- Arbitration Courts
- General Prosecutor’s Office
