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Who pays the tax deducted from the amount stated in the employment contract: the employee or the employer?
Who pays the tax deducted from the amount stated in the employment contract: the employee or the employer?
We inform you that the calculation of income tax withheld from income earned through employment and its payment to the state budget is the responsibility of the employer. In other words, the tax is not paid separately by the employee but is deducted by the employer during payroll calculation.
According to Articles 101.1 and 101.1-1 of the Tax Code, the monthly income earned by individuals from employment is subject to income tax at the applicable rates, and this tax is calculated and transferred to the state budget at the source of payment by the employer.
At the same time, pursuant to Article 102.1.6 of the Tax Code, if an individual’s monthly income from their main place of work does not exceed 2,500 manats, 200 manats of that income, and if the annual income does not exceed 30,000 manats, 2,400 manats of that income, are exempt from income tax.
Therefore, the difference between the amount stated in the employment contract (for example, 555 AZN) and the amount transferred to the employee’s bank card (489 AZN) is due to taxes and mandatory deductions calculated in accordance with the legislation, and this process is fully carried out by the employer.
We inform you that the calculation of income tax withheld from income earned through employment and its payment to the state budget is the responsibility of the employer. In other words, the tax is not paid separately by the employee but is deducted by the employer during payroll calculation.
According to Articles 101.1 and 101.1-1 of the Tax Code, the monthly income earned by individuals from employment is subject to income tax at the applicable rates, and this tax is calculated and transferred to the state budget at the source of payment by the employer.
At the same time, pursuant to Article 102.1.6 of the Tax Code, if an individual’s monthly income from their main place of work does not exceed 2,500 manats, 200 manats of that income, and if the annual income does not exceed 30,000 manats, 2,400 manats of that income, are exempt from income tax.
Therefore, the difference between the amount stated in the employment contract (for example, 555 AZN) and the amount transferred to the employee’s bank card (489 AZN) is due to taxes and mandatory deductions calculated in accordance with the legislation, and this process is fully carried out by the employer.