Kazakhstan

Kazakhstan PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Kazakhstan to companies willing to enter the Kazakhstan market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Kazakhstan.  However our solution allows you to start the operations in Kazakhstan within days hence save time and money.  WeHG will recruit candidates on your behalf, while you retain full operational control over their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. 

Kazakhstan fast facts

Population, million: 18,776,707
Land area:  2.725 million km²
Capital: Nur-Sultan
Local currency: Kazakhstani tenge (KZT)

GDP per capita:$ 11250.00
GDP in currency:$ 38.7 billion

Laws applicable to foreign nationals
The Law on Migration regulates aspects of foreign labour and Government Regulation No. 559 of 27 June 2016 regulates work permits issued to foreign nationals.
A special employment regime is set out for the citizens of the member states of the Eurasian Economic Union in accordance with the International Treaty among Kazakhstan, Belarus and Russia on Eurasian Economic Union, dated 29 May 2014.

Legislative acts and other regulations that govern the relations between employer and employee:

  • the Kazakhstan Constitution, which sets out the basic rights relating to employment; 
  • the Labour Code, which regulates employment and related matters, social partnerships, safety and protection of labour.

Hiring, Negotiating and Doing Business in Kazakhstan

Necessity of written employment contract

A written employment contract is mandatory. Employment contracts must contain the following:

  • parties’ details:
  • for an employer-individual: surname, name and patronymic (if specified in the document certifying the identity); address of permanent place of residence and information on registration at such address; name, number and date of issue of the document certifying the identity; and individual identification number (business identification number);
  • for an employer-legal entity: full name and address of the employer; number and date of the state registration; and business identification number; and
  • for an employee: surname, name and patronymic (if specified in the identification document) of the employee; address of permanent place of residence and information on registration at such address; name, number and date of issue of the identification document; and individual identification number;
  • job description in accordance with specific profession or qualification;
  • location of work;
  • employment contract term;
  • starting date;
  • work hours and rest time;
  • remuneration;
  • description of work conditions, guarantees and privileges where the work is recognised as heavy or is performed under harmful or hazardous conditions;
  • rights and obligations of the employee;
  • rights and obligations of the employer;
  • procedure for the amendment and termination of the employment contract;liabilities of the parties;date of the employment contract and its serial number; and
  • contract with a disabled person should also include terms and conditions on equipping the workplace.

Different forms of engagement: employment, contracting, work with private entrepreneur

A Kazakhstan employer may employ foreign nationals on the basis of a validly issued work permit. The number of issued work permits may not exceed the yearly quota for foreign labour set annually by the Kazakhstan government. The issuance of work permits is subject to detailed statutory requirements. Certain foreign nationals and categories of employees are exempt from work permit requirements. Obtainment of work permits is a time-consuming and document-intensive process.

Kazakhstan Employment Contract

Types of employment agreements

There are two main types:

  • for an indefinite period;
  • for a certain period but not less than one year (fixed-term contract), unless otherwise provided by law.

The general rule is that employment contracts should be valid for at least one year. A fixed-term employment contract for a period of less than one year is permissible only:

  • when there is a need for substitution of a temporarily absent employee;
  • for the duration of a specific project or for the performance of seasonal works; or
  • within the term of a work permit or permission of a foreign employee or foreign labour immigrant.

An expired employment contract may be extended for an undefined period or a period of not less than one year (such one-year extension may happen only twice). An employment contract with an employee of retirement age may be extended every year. An employment contract with the executive body of a legal entity (eg, CEO or president) must be concluded for a fixed term established by a company’s constitutional documents or as agreed between an employee and employer in the employment contract within the permitted maximum term.
The number of renewals for the fixed term employment contract, concluded for a certain period not less than one year, can not exceed two times. The third extension can only be for an indefinite contract.

Kazakhstan working hours

The Employee shall work a 40 hours five day work week (Monday – Friday), with an 8 hour working day, which commences at 9.00 a.m. and ends at 6.00 p.m. with one hour off for lunch.

Overtime

Up to 120 hours per calendar year. Paid at double rate, or additional days off for each day of overtime work. It is possible not to pay overtime if it is set in the employment agreement that an employee has flexible working time.

All workers are entitled to overtime pay if they are engaged in overtime work. Pregnant women, disabled employees and employees younger than 18 years old cannot be engaged in overtime work. The Labour Code sets minimum rates for overtime pay, which may be increased by employment contract or collective bargaining agreements. The calculation of overtime pay depends on the payroll system established by the employer; however, overtime pay must be no less than 50 per cent or 1.5 of the daily (hourly) rate of the employee.

Vacation leave in Kazakhstan

Annual paid vacation is 24 calendar days by Labour Code per annum.
An employee may accumulate vacation, but it is desirable that this amount does not exceed 48 days, as prohibited by the legislation, as an employee cannot work without vacation for more than 2 years. Employees may use their vacation at any time of the year, but it must be consistent with the management of the company and cannot interfere with its operations.

Kazakhstan Maternity Leave

70 Calendar days before delivery, and 56 days after. If hard delivery or the born of more than 2 newborns, additional 14 calendar days are added for after delivery period. Paid according to the Law of the Republic of Kazakhstan dated April 25, 2003 No. 405-II “about Compulsory Social Insurance” (with amendments and additions as of June 20, 2017).

Parental leaves

In addition to maternity leave, optional leave without pay for childcare can be granted up to 3 years. According to Article 99 of the Code, such leave can be received by the father or mother of the child, and if the child is left without parental care, then by the next of kin, i.e. Who will actually be involved in the upbringing of the child.

Kazakhstan Severance Laws

There are 25 ways to terminate employment agreement by employer’s will. However, almost all can influence employee negatively and almost all reasons treated as unfair employee’s behavior.

There is only one neutral reason to terminate the agreement by employer’s will – because of reduction in the number of staff of workers. In our type of employment, when real employer your client this is not very suitable reason. Government authorities are checking companies that reduce the number of workers, what is more, if an employee doesn’t agree with termination, the local employer will have a problem because of unfair termination. There is no severance payment from employer side, notice period – 1 month. Kindly note that termination by employer’s will is better to avoid.

The most comfortable way to terminate employment – by employee’s will or by mutual agreement.

All base dismissal divided into several major groups:

  • initiative of the employee;
  • initiative of the employer;
  • agreement of the parties;
  • the expiration of the employment contract.

An employee must submit a notice of resignation not less than one month.
Notice of resignation in electronic form is not sufficient.

The final dismissal payment to an employee is made no later than 3 business days after the termination and HR papers must be signed by an employee.

Kazakhstan Tax

An individual’s income in Kazakhstan is taxed at a flat rate of 10% (dividend income taxed at 5% unless specifically exempted).

Social tax is payable by employers in respect of employees (both locals and expatriates) at 9.5% on top of the employee’s gross remuneration.

Starting from 1 January 2020, employer’s OMIC are increased to the rate of 2%. All employers, including branches and representative offices, should pay OMIC for all their employees, including Kazakhstan citizens and foreigners holding Kazakhstan residence permit, or citizens of member countries of the Eurasian Economic Union. The monthly income accepted for calculating deductions and contributions should not exceed ten times the minimum monthly wage (in 2019, the calculation of income is not more than KZT 425,000). Until 2019, the maximum limit was 15 times the minimum monthly wage.

Health Insurance Benefits in Kazakhstan

Kazakhstan is moving towards a single-payer, universal health care system that will be partially funded through the government’s budget and partially by employers and employees.

Starting from 1 January 2021, employee OMIC are withheld at a rate of 2% out of employees’ gross income and paid to the Social Health Insurance Fund. The gross income subject to employee OMIC is capped at 10 times the minimum monthly wage per employee per month. Subject to employee OMIC are Kazakhstan citizens, foreigners holding Kazakhstan residence permit, and citizens of member countries of the Eurasian Economic Union.

Additional Benefits in Kazakhstan

Giving employees benefits should include more than just the statutory benefits required by law. Your employees should also receive additional benefits that will encourage them to stay in their positions longer. Some of the more common supplemental benefits include:

  • Housing allowance
  • Transportation allowance
  • Company car
  • Education allowance

Kazakhstan Holidays

Public holidays

  • New Year
  • International Women’s Day
  • Nauryz holiday
  • Kazakhstan’s People Solidarity Holiday
  • Defenders’ day
  • Victory Day
  • Capital Day
  • Constitution Day of the RK
  • First President Day 

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Kazakhstan

  • Working hours in Kazakhstan

    The Employee shall work a 40 hours five day work week (Monday – Friday), with an 8 hour working day, which commences at 9.00 a.m. and ends at 6.00 p.m. with one hour off for lunch.

  • What are the main holidays in Kazakhstan?

    Public holidays

    • New Year
    • International Women’s Day
    • Nauryz holiday
    • Kazakhstan’s People Solidarity Holiday
    • Defenders’ day
    • Victory Day
    • Capital Day
    • Constitution Day of the RK
    • First President Day 
  • What are payroll taxes in Kazakhstan?

    An individual’s income in Kazakhstan is taxed at a flat rate of 10% (dividend income taxed at 5% unless specifically exempted).

    Social tax is payable by employers in respect of employees (both locals and expatriates) at 9.5% on top of the employee’s gross remuneration.

    Starting from 1 January 2020, employer’s OMIC are increased to the rate of 2%. All employers, including branches and representative offices, should pay OMIC for all their employees, including Kazakhstan citizens and foreigners holding Kazakhstan residence permit, or citizens of member countries of the Eurasian Economic Union. The monthly income accepted for calculating deductions and contributions should not exceed ten times the minimum monthly wage (in 2019, the calculation of income is not more than KZT 425,000). Until 2019, the maximum limit was 15 times the minimum monthly wage.

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