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Procedure for calculating and paying alimony withheld from salary — EXAMPLES
Procedure for calculating and paying alimony withheld from salary — EXAMPLES
In recent years, as the number of citizens paying alimony from their salaries has increased, questions related to such deductions have also risen. Most inquiries concern from which types of income alimony is withheld, what portion of the salary it can be deducted from, and how the corresponding amount is calculated. Expert Kəmala Yusifova provides clarification on the topic.
According to Article 176, Paragraph 1 of the Labour Code of the Republic of Azerbaijan, the total amount of all deductions withheld from the salary at each payment cannot exceed 20% of the employee’s due salary, and in cases provided by relevant legislation, it cannot exceed 50%.
Paragraph 3 of the same article specifies that the limitations established in Paragraphs 1 and 2 do not apply to deductions from wages when serving corrective work, withholding alimony, compensation for damage to health, compensation to persons harmed due to the loss of a breadwinner, or compensation for damage caused by a criminal act. In such cases, the amount of deductions cannot exceed 70% of the employee’s due salary.
Cabinet of Ministers of the Republic of Azerbaijan Decree No. 98 dated May 23, 2001, approved the “Types of Salaries and (or) Other Income of Parents Paid in Manats and Foreign Currency from Which Alimony for Children is Deducted.” According to this document, alimony is deducted from parents’ salaries received in manats or foreign currency, as well as from the following types of income:
- All types of salary supplements;
- Payments for overtime work, work on holidays, weekends, and National Day of Mourning;
- Payments for production losses not due to the employee, downtime, failure to meet production norms, breaks due to cold or hot weather;
- Temporary replacement payments;
- Payments in cases where the employee’s workplace and average salary are maintained by law;
- One-time service awards;
- Severance pay and average wages for the second and third months after dismissal;
- Compensation to persons who lost working capacity due to occupational accidents or diseases.
Alimony is not deducted from the following types of income:
- Incentive payments for anniversaries, holidays, birthdays, and similar occasions (including bonuses);
- Compensation for amortization of work tools and other items;
- Various types of financial assistance;
- Travel allowances and related expenses, permanent fieldwork allowances, or payments for mobile work on construction sites;
- Value of work clothing, protective gear, soap, washing agents, milk, or medical-preventive nutrition;
- Free meals as provided by law (collective meals or meals provided at reduced or no cost by the enterprise);
- Cost of sanatorium and resort treatment or holiday vouchers;
- Housing rent and relocation expenses when transferred or moved to another area;
- Scholarships for employees sent to professional development courses.
According to Paragraph 7 of Decree No. 98, alimony is deducted after taxes are withheld from the payer’s earned income. The term “taxes” here refers to taxes applied under the Tax Code to the individual’s income and does not include other mandatory deductions.
Example 1: An employee in the private sector earns 2,000 AZN per month. The court orders 25% of the salary to be withheld as alimony.
First, income tax is deducted:
(2,000 − 200) × 3% = 54 AZN.
Alimony amount:
(2,000 − 54) × 25% = 486.5 AZN.
Mandatory social insurance contributions, unemployment insurance, and compulsory medical insurance are then deducted. The net salary received by the employee is 1,284.31 AZN.
Example 2: A public sector employee has a monthly salary of 1,500 AZN. In January, they received 100 AZN for work on a holiday and 200 AZN for their birthday. Total monthly salary: 1,800 AZN. The court orders 20% alimony deduction.
When calculating alimony, the 100 AZN for holiday work is included, but the 200 AZN birthday payment is excluded.
Alimony: 280.8 AZN. After mandatory contributions, the net salary received by the employee is 1,435.64 AZN.
According to the official position of the State Tax Service under the Ministry of Economy, alimony is deducted from the payer’s income after taxes, as established by the Tax Code. Mandatory state social insurance, unemployment insurance, and compulsory medical insurance are deducted from the remaining amount after alimony is paid. Calculations are based on Article 98 of the Tax Code and the laws of the Republic of Azerbaijan on “Social Insurance,” “Medical Insurance,” and “Unemployment Insurance.”
In recent years, as the number of citizens paying alimony from their salaries has increased, questions related to such deductions have also risen. Most inquiries concern from which types of income alimony is withheld, what portion of the salary it can be deducted from, and how the corresponding amount is calculated. Expert Kəmala Yusifova provides clarification on the topic.
According to Article 176, Paragraph 1 of the Labour Code of the Republic of Azerbaijan, the total amount of all deductions withheld from the salary at each payment cannot exceed 20% of the employee’s due salary, and in cases provided by relevant legislation, it cannot exceed 50%.
Paragraph 3 of the same article specifies that the limitations established in Paragraphs 1 and 2 do not apply to deductions from wages when serving corrective work, withholding alimony, compensation for damage to health, compensation to persons harmed due to the loss of a breadwinner, or compensation for damage caused by a criminal act. In such cases, the amount of deductions cannot exceed 70% of the employee’s due salary.
Cabinet of Ministers of the Republic of Azerbaijan Decree No. 98 dated May 23, 2001, approved the “Types of Salaries and (or) Other Income of Parents Paid in Manats and Foreign Currency from Which Alimony for Children is Deducted.” According to this document, alimony is deducted from parents’ salaries received in manats or foreign currency, as well as from the following types of income:
- All types of salary supplements;
- Payments for overtime work, work on holidays, weekends, and National Day of Mourning;
- Payments for production losses not due to the employee, downtime, failure to meet production norms, breaks due to cold or hot weather;
- Temporary replacement payments;
- Payments in cases where the employee’s workplace and average salary are maintained by law;
- One-time service awards;
- Severance pay and average wages for the second and third months after dismissal;
- Compensation to persons who lost working capacity due to occupational accidents or diseases.
Alimony is not deducted from the following types of income:
- Incentive payments for anniversaries, holidays, birthdays, and similar occasions (including bonuses);
- Compensation for amortization of work tools and other items;
- Various types of financial assistance;
- Travel allowances and related expenses, permanent fieldwork allowances, or payments for mobile work on construction sites;
- Value of work clothing, protective gear, soap, washing agents, milk, or medical-preventive nutrition;
- Free meals as provided by law (collective meals or meals provided at reduced or no cost by the enterprise);
- Cost of sanatorium and resort treatment or holiday vouchers;
- Housing rent and relocation expenses when transferred or moved to another area;
- Scholarships for employees sent to professional development courses.
According to Paragraph 7 of Decree No. 98, alimony is deducted after taxes are withheld from the payer’s earned income. The term “taxes” here refers to taxes applied under the Tax Code to the individual’s income and does not include other mandatory deductions.
Example 1: An employee in the private sector earns 2,000 AZN per month. The court orders 25% of the salary to be withheld as alimony.
First, income tax is deducted:
(2,000 − 200) × 3% = 54 AZN.
Alimony amount:
(2,000 − 54) × 25% = 486.5 AZN.
Mandatory social insurance contributions, unemployment insurance, and compulsory medical insurance are then deducted. The net salary received by the employee is 1,284.31 AZN.
Example 2: A public sector employee has a monthly salary of 1,500 AZN. In January, they received 100 AZN for work on a holiday and 200 AZN for their birthday. Total monthly salary: 1,800 AZN. The court orders 20% alimony deduction.
When calculating alimony, the 100 AZN for holiday work is included, but the 200 AZN birthday payment is excluded.
Alimony: 280.8 AZN. After mandatory contributions, the net salary received by the employee is 1,435.64 AZN.
According to the official position of the State Tax Service under the Ministry of Economy, alimony is deducted from the payer’s income after taxes, as established by the Tax Code. Mandatory state social insurance, unemployment insurance, and compulsory medical insurance are deducted from the remaining amount after alimony is paid. Calculations are based on Article 98 of the Tax Code and the laws of the Republic of Azerbaijan on “Social Insurance,” “Medical Insurance,” and “Unemployment Insurance.”