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Involvement of a foreign citizen in mandatory state social insurance contributions
Involvement of a foreign citizen in mandatory state social insurance contributions
Are foreign nationals working under an employment contract in the Republic of Azerbaijan subject to mandatory health, unemployment, and state social insurance contributions?
According to the State Tax Service under the Ministry of Economy, based on Article 12 of the Law "On Social Insurance" and Article 15-2.1 of the Law "On Health Insurance", citizens of the Republic of Azerbaijan and stateless persons working under an employment contract are considered insured persons.
If the monthly income of such individuals subject to social insurance contributions is 200 AZN or less, 3% of the amount is deducted as a social insurance contribution. If the income exceeds 200 AZN, 6 AZN plus 10% of the amount exceeding 200 AZN is deducted.
From the employer’s side, social insurance contributions are calculated at a rate of 22% on the portion of the employee’s income up to 200 AZN and 15% on the portion exceeding 200 AZN.
In addition, unemployment insurance contributions must be paid as follows: the employer pays 0.5% of the calculated payroll fund, and the employee pays 0.5% of their salary.
It is also stipulated that mandatory health insurance contributions are withheld at a rate of 2% from the portion of the employee's salary up to 8,000 AZN and 0.5% from the portion exceeding 8,000 AZN.
Are foreign nationals working under an employment contract in the Republic of Azerbaijan subject to mandatory health, unemployment, and state social insurance contributions?
According to the State Tax Service under the Ministry of Economy, based on Article 12 of the Law "On Social Insurance" and Article 15-2.1 of the Law "On Health Insurance", citizens of the Republic of Azerbaijan and stateless persons working under an employment contract are considered insured persons.
If the monthly income of such individuals subject to social insurance contributions is 200 AZN or less, 3% of the amount is deducted as a social insurance contribution. If the income exceeds 200 AZN, 6 AZN plus 10% of the amount exceeding 200 AZN is deducted.
From the employer’s side, social insurance contributions are calculated at a rate of 22% on the portion of the employee’s income up to 200 AZN and 15% on the portion exceeding 200 AZN.
In addition, unemployment insurance contributions must be paid as follows: the employer pays 0.5% of the calculated payroll fund, and the employee pays 0.5% of their salary.
It is also stipulated that mandatory health insurance contributions are withheld at a rate of 2% from the portion of the employee's salary up to 8,000 AZN and 0.5% from the portion exceeding 8,000 AZN.