en
Are taxes and social contributions withheld from the allowance paid to the heirs due to the employee’s death?
Are taxes and social contributions withheld from the allowance paid to the heirs due to the employee’s death?
If an employee passes away leaving unpaid salary, unused leave compensation, and bonuses, are taxes and mandatory social contributions (health, unemployment, and state social protection fund contributions) withheld when these amounts are paid to the heirs?
According to the State Tax Service under the Ministry of Economy, pursuant to Article 77.7 of the Labour Code, upon termination of an employment contract due to the employee’s death, the heirs are paid an allowance of at least three times the employee’s average monthly salary.
Under Article 102 of the Tax Code and Article 15 of the Law “On Social Insurance,” the guarantees paid to the heirs in accordance with the Labour Code of the Republic of Azerbaijan are exempt from income tax and mandatory state social insurance contributions.
It should also be noted that if the deceased person was both an insured individual and a pensioner, only one funeral allowance — the higher amount — is paid.
If an employee passes away leaving unpaid salary, unused leave compensation, and bonuses, are taxes and mandatory social contributions (health, unemployment, and state social protection fund contributions) withheld when these amounts are paid to the heirs?
According to the State Tax Service under the Ministry of Economy, pursuant to Article 77.7 of the Labour Code, upon termination of an employment contract due to the employee’s death, the heirs are paid an allowance of at least three times the employee’s average monthly salary.
Under Article 102 of the Tax Code and Article 15 of the Law “On Social Insurance,” the guarantees paid to the heirs in accordance with the Labour Code of the Republic of Azerbaijan are exempt from income tax and mandatory state social insurance contributions.
It should also be noted that if the deceased person was both an insured individual and a pensioner, only one funeral allowance — the higher amount — is paid.