Payroll and Benefits Guide Azerbaijan
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
|
Oil and Gas Industry:
|
|
|
22.00%
|
Social Security
|
|
0.50%
|
Unemployment
|
|
2.00%
|
Mandatory Medical Insurance
|
|
*Private Sector:
|
|
|
2.00% up to 200 AZN;
15% above 200 AZN + 44 AZN
|
Social Security
|
|
0.50%
|
Unemployment
|
|
1.00% up to 8,000 AZN; 0.5% above AZN 8000 + 160 AZN
|
Mandatory Medical Insurance* |
|
*A 50% discount has been applied to the non-state and non-oil sector’s mandatory medical insurance; both the employee and the employer contributions will be 1% for the income earned up to AZN 8,000.
*Rate for private sector employees lasts for 7 years, after which it is the same as for oil and gas industry employees.
|
|
| 22.00% |
Total Employment Cost |
| Employee Payroll Contributions | |
|
Oil and Gas Industry:
|
|
|
3.00%
|
Social Security
|
|
0.50%
|
Unemployment
|
|
2.00%
|
Mandatory Medical Insurance
|
|
*Private Sector:
|
|
|
3.00% under 200 and 10% in excess of 200 AZN + 6 AZN
|
Social Security
|
|
0.5%
|
Unemployment
|
|
1% up to 8,000 AZN; 0.5% above AZN 8000 + 160 AZN
|
Mandatory Medical Insurance*
|
|
*A 50% discount has been applied to the non-state and non-oil sector’s mandatory medical insurance; both the employee and the employer contributions will be 1% for the income earned up to AZN 8,000.
*Rate for private sector employees lasts for 7 years, after which it is the same as for oil and gas industry employees.
|
|
| 5.50% |
Total Employee Cost |
| Employee Income Tax | |
|
Oil and Gas Industry employees:
|
|
|
14.00%
|
Wage Tax for monthly salaries below 2,500 AZN
|
|
350 AZN + 25% of anything above 2,500 AZN
|
Wage tax for monthly salaries above 2,500 AZN
|
|
*Private Sector employees:
|
|
|
0.00%
|
Wage Tax for monthly salaries up to 8,000 AZN
|
|
14.00% of the amount exceeding 8,000 AZN
|
Wage Tax for monthly salaries above 8,000 AZN
|
| *Rate for private sector employees lasts for 7 years, after which it is the same as for oil and gas Industry employees. |
Employer taxes
Employee taxes
Minimum Wage
The monthly minimum wage is 400 AZN.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
In Azerbaijan, the Labor Code requires that wages be paid at least once a month. The exact frequency (monthly, semi-monthly, bi-weekly, or weekly) can be agreed upon between employer and employee and fixed in the employment contract or collective agreement.
Legally, salary payments can be made twice a month but it is becoming more and more common to use a monthly payment set up.
The payment date must be set and agreed within the employment contract.
13th Salary
There is no requirement for the 13th salary payment in Azerbaijan.
Working Hours
General
Standard working hours are set for employees over the age of 18 at no more than 8 hours a day and 40 hours per week, with a working week set at 5 working days and 2 days off.
In certain industries, the employer may impose a six-day working week; in such situations, the daily working time limits may not exceed 7 hours (if the weekly total is 40 hours), 6 hours (if the weekly total is 36 hours), or 4 hours (if the weekly total is 24 hours) a day.
Overtime
- Maximum Ordinary Hours: The standard work limit is 8 hours per day and 40 hours per week. Any work beyond this is considered overtime (artıq iş vaxtı).
- Daily Overtime Limit: Overtime work generally cannot exceed 4 hours over two consecutive working days.
- In workplaces with difficult and hazardous working conditions, this limit is reduced to 2 hours per day.
- Annual Overtime Cap: The maximum allowable overtime is usually limited to 180 hours per year. Some sources cite up to 200 hours per year, depending on interpretation or specific collective agreements, but 180 hours is commonly referenced.
- Consent: Employers must obtain authorization for any overtime work. Employees may generally refuse overtime work if it exceeds the legal limits or is not caused by extraordinary circumstances.
- Replacement: Overtime hours cannot be substituted with compensatory time off (time off in lieu/additional days’ leave).
Mandatory Overtime Pay Rates
Azerbaijani law mandates a high minimum premium rate for overtime. The method of calculation depends on the wage system (time-based or piecework).
| Day/Condition | Minimum Compensation Rate (Statutory) | Total Pay Rate | Notes |
| Normal Overtime (Time-Based Salary) | 2 times the employee’s regular hourly rate. | 200% | This is the minimum rate for all overtime hours worked on a normal working day. |
| Normal Overtime (Piecework Salary) | An amount no less than the regular hourly wage of employees in the same pay scale (paid in addition to the piecework payment). | Varies | For employees paid by the task/piecework. |
| Weekly Rest Day | Not less than 2 times the daily standard wage. | 200%+ | Employees must be paid at least double their daily standard wages. Compensatory rest days may be offered with the consent of the employee instead of monetary compensation. |
| Public Holiday | Not less than 2 times the daily standard wage. | 200%+ | Payment for work performed on statutory public holidays. Compensatory rest days may be offered with the consent of the employee. |
Time & Attendance
Employers must maintain accurate records of working hours, overtime and leave, recorded electronically via the Ministry of Labor’s system.
Leave
Annual Leave (vacation)
In Azerbaijan, the minimum annual leave entitlement is 21 calendar days.
This entitlement increases in line with the number of years of service within a single company, as follows:
- 5-10 years of service = Additional 2 days of leave per annum
- 10-15 years of service = Additional 4 days of leave per annum
- 15 or more years of service = Additional 6 days of leave per annum
Annual leave can be broken down into multiple leave periods, however, one of the leave periods must be 2 weeks in length.
Additional leave might be mandated for specific categories of workers such as civil servants, teachers, medical staff (granted between 30-56 calendar days) or those working in hazardous conditions (granted a minimum of 6 additional calendar days).
Paid Time Off
In Azerbaijan, employees earn a statutory right to annual paid leave (minimum about 21 days, more for certain roles) under the Labour Code. Unused annual leave does carry over and must be used, rather than automatically expiring at year-end. Employees can generally carry forward unused leave into the next year if they haven’t taken it within the original leave period. There’s no legal basis for a blanket “use-it-or-lose-it” policy that deletes accrued statutory annual leave simply because the year ended. Employers must allow employees to take their earned leave or compensate them for unused leave (e.g., on termination).
Note: Specific procedural rules (e.g., timing for taking carried-over leave) are set by law and may require employer-employee agreement or scheduling within reasonable timeframes.
Public Holidays
There are 24 public holidays in Azerbaijan. In accordance with the resolution, the following days will be considered rest days due to the coincidence of holidays with the weekends:
- 3, 4 January, 25 March, 30 May, 27 June, 11, and 12 July with respect to a five-day working week
- 3 January, 25 March, 27 June, and 11 July with respect to the six-day working week
When a public holiday falls on a weekday, a day off in lieu is generally given on the next working day.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 January 2026 | Friday | New Year Holiday | Standard holiday |
| 20 January 2026 | Tuesday | Martyrs’ Day (Day of Nationwide Sorrow) | Standard holiday |
| 8 March 2026 | Sunday | International Women’s Day | Standard holiday |
| 9 March 2026 | Monday | International Women’s Day (Day in lieu) | Standard holiday |
| 20 March 2026 | Friday | Novruz (Spring Holiday) | Standard holiday |
| 21 March 2026 | Saturday | Novruz Holiday | Standard holiday |
| 22 March 2026 | Sunday | Novruz Holiday | Standard holiday |
| 23 March 2026 | Monday | Novruz Holiday (Day in lieu) | Standard holiday |
| 24 March 2026 | Tuesday | Novruz Holiday | Standard holiday |
| 27 March 2026 | Friday | Eid al-Fitr (Ramazan Bayramı) | Standard holiday |
| 28 March 2026 | Saturday | Eid al-Fitr Holiday (Day in lieu) | Standard holiday |
| 9 May 2026 | Saturday | Day of Victory over Fascism | Standard holiday |
| 11 May 2026 | Monday | Day of Victory over Fascism (Day in lieu) | Standard holiday |
| 28 May 2026 | Thursday | Independence Day | Standard holiday |
| 15 June 2026 | Monday | Day of National Salvation | Standard holiday |
| 26 June 2026 | Friday | Armed Forces Day | Standard holiday |
| 3 June 2026 | Wednesday | Eid al-Adha (Gurban Bayramı) | Standard holiday |
| 4 June 2026 | Thursday | Eid al-Adha Holiday | Standard holiday |
| 8 November 2026 | Sunday | Victory Day (Zəfər Günü) | Standard holiday |
| 9 November 2026 | Monday | National Flag Day | Standard holiday |
| 10 November 2026 | Tuesday | Victory Day (Day in lieu) | Standard holiday |
| 31 December 2026 | Thursday | World Azerbaijanis Solidarity Day | Standard holiday |
Sick Days
Employees unable to work due to sickness will be paid in full for the first 2 consecutive weeks by the employer. Thereafter, additional consecutive sick leave will be paid by the State Social Protection Fund, calculated based on the employee’s average daily wage, with the payment rate varying between 60%, 80%, or 100%, depending on the employee’s length of social insurance contributions (social seniority).
In order to receive the sick pay benefit, the employee must provide a medical certificate.
Maternity Leave
Female employees are entitled to a total of 126 calendar days of maternity leave, of which 70 calendar days are to be taken prior to the expected due date of the child and 56 calendar days after the birth. For difficult births or multiple births, the maternity leave can be extended for an additional 14 days.
Maternity pay is calculated at 100% of the average of the mother’s previous 12 months’ salary payments and is to be paid by the State Social Protection Fund.
A medical certificate confirming pregnancy and expected delivery date is required to qualify for maternity leave and pay.
Pregnant women or women with young children are also covered under special circumstances in relation to employment law, the main clauses include:
- A pregnant woman or a woman with a child under the age of 3 years old cannot be terminated.
- A pregnant woman or woman with a child under the age of 18 months old is entitled to a reduced workweek. The maximum number of hours permitted is 36 hours a week.
- A pregnant woman or woman with a child under the age of 3 years old cannot be asked to work night shifts.
Paternity Leave
Fathers are entitled to take 14 calendar days of unpaid paternity leave following the birth of a child.
Parental Leave
In Azerbaijan, there are various stipulations for parental rights, inclusive of additional time off should it be required; the main clauses are:
- A woman with two children under the age of 16 is entitled to 2 additional days of paid leave; a woman with 3 or more children under the age of 16 is entitled to 5 days of additional paid leave.
- A woman or single father with children under the age of 16 is entitled to 14 days of unpaid leave per year.
- Female employees adopting children under 2 months of age are entitled to 56 calendar days of social leave.
Other Leave
In Azerbaijan, unpaid leave can be granted to cover special leave requirements such as study leave or bereavement leave.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
In Azerbaijan, termination of an employment contract is governed by the Labour Code of the Republic of Azerbaijan and must be carried out in accordance with the Code’s statutory grounds, notice, and procedural requirements.
The final payment must be delivered at the very latest by the final day of employment, and the resignation of employment agreement should be registered in an electronic information system on the last working day together with the notification to the MLSPP providing details of the role and salary of the employee being terminated.
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Twice per month (advance + remainder) with the interval not exceeding 16 days. If the payday falls on a non-business day, pay the day before. Employees whose salary is calculated on an annual basis must be paid at least monthly. | All amounts due must be paid in full on the day employment ends (the Code states payment is due “on the day that [the employee] quits”), plus a 1% per day penalty to the employee for employer-fault delay. | Not mandatory by law: wages are paid at the workplace; deposit to the employee’s bank account is allowed at the employee’s request (or sent to a specified address). Payments are in AZN. |
Notice Period
The notice period for an employee is set out in Section 20 of the Employees Act (Angestellten-Gesetz).
Employees must give at least 1 month notice in writing when resigning, regardless of their length of service.
Employers must give the following notice when terminating a worker:
- Up to 1 year of service = 2 calendar weeks notice
- 1 to 5 years of service = 4 calendar weeks notice
- 5 to 10 years service = 6 calendar weeks notice
- More than 10 years service = 9 calendar weeks notice
When terminating an employment agreement due to downsizing, two months’ notice is required. During this 2-month period, the employee can take one day of paid time off per week for the purpose of finding new employment.
Severance Pay
For employees who are terminated based on redundancy, a minimum of 3 months’ severance pay is required.
In general, severance pay varies depending on the length of time the employee has been employed:
- 1 years service or less – 1 month’s salary
- Between 1- and 5 years’ service – 1.4 the monthly salary
- Between 5- and 10 years’ service – 1.7 the monthly salary
- More than 10 years’ service – 2X the monthly salary
In addition to general severance pay, a termination payment of 2 months’ salary must be given if:
- Terms of employment were changed
- The employee is called for military service
- The employee can no longer perform their duties due to a permanent disability
In the event that the employee dies whilst still in employment, three months of salary allowance is given to their family members.
Probation Period
In Azerbaijan, the standard probation period is up to 3 months. For employment of up to 6 months, the probation period may not exceed 14 calendar days.
During this time, either the employee or employer can terminate the employment agreement with notice of 3 calendar days.
Immigration
Foreign individuals wishing to work in Azerbaijan must obtain a work permit from the State Migration Service of the Republic of Azerbaijan through their employers. The work permit only lasts up to one year at a time; therefore, an employee would have to be re-issued with this multiple times during their employment.
Within 15 days of arrival in the country, an application should be made via the electronic services of the official website of the State Migration Service of the Republic of Azerbaijan, e-government portal, via e-mail (qeydiyyat@migration.gov.az), in-person to the regional migration department, or “ASAN service” centers. The following documentation would be required for this submission:
- A completed application form
- A copy of an employee’s passport (other border crossing documents including the visa page and pages indicating the last entry to the country)
All visitors to Azerbaijan are recommended to obtain a visa prior to their arrival. Passports without visas are retained by the immigration authorities at the airport. Visitors then must apply to the Consular Department of the Ministry of Foreign Affairs during working hours to retrieve their passport with a visa.
Once the work permit is issued, it serves as the basis for obtaining a temporary residence permit. Temporary residence permits are initially issued for up to one year based on the submitted application and may subsequently be extended for no more than two years at a time.
The maximum timeframe for obtaining a temporary residence permit is 20 working days after submission of the complete application package.
VAT
General
The standard VAT rate in Azerbaijan is 18%.
Stay up to date on payroll & employment law changes
Version History
Questions & Answers
See how Papaya can help you automate your global payroll or EoR whilst staying 100% compliant with local labor laws
Payroll and Benefits Guide
in Azerbaijan
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 January 2026 | Friday | New Year Holiday | Standard holiday |
| 20 January 2026 | Tuesday | Martyrs’ Day (Day of Nationwide Sorrow) | Standard holiday |
| 8 March 2026 | Sunday | International Women’s Day | Standard holiday |
| 9 March 2026 | Monday | International Women’s Day (Day in lieu) | Standard holiday |
| 20 March 2026 | Friday | Novruz (Spring Holiday) | Standard holiday |
| 21 March 2026 | Saturday | Novruz Holiday | Standard holiday |
| 22 March 2026 | Sunday | Novruz Holiday | Standard holiday |
| 23 March 2026 | Monday | Novruz Holiday (Day in lieu) | Standard holiday |
| 24 March 2026 | Tuesday | Novruz Holiday | Standard holiday |
| 27 March 2026 | Friday | Eid al-Fitr (Ramazan Bayramı) | Standard holiday |
| 28 March 2026 | Saturday | Eid al-Fitr Holiday (Day in lieu) | Standard holiday |
| 9 May 2026 | Saturday | Day of Victory over Fascism | Standard holiday |
| 11 May 2026 | Monday | Day of Victory over Fascism (Day in lieu) | Standard holiday |
| 28 May 2026 | Thursday | Independence Day | Standard holiday |
| 15 June 2026 | Monday | Day of National Salvation | Standard holiday |
| 26 June 2026 | Friday | Armed Forces Day | Standard holiday |
| 3 June 2026 | Wednesday | Eid al-Adha (Gurban Bayramı) | Standard holiday |
| 4 June 2026 | Thursday | Eid al-Adha Holiday | Standard holiday |
| 8 November 2026 | Sunday | Victory Day (Zəfər Günü) | Standard holiday |
| 9 November 2026 | Monday | National Flag Day | Standard holiday |
| 10 November 2026 | Tuesday | Victory Day (Day in lieu) | Standard holiday |
| 31 December 2026 | Thursday | World Azerbaijanis Solidarity Day | Standard holiday |
Should an employee receive payment for unused vacation? If yes, are their reasons why they wouldn’t receive payment?
No matter the reason for termination, an employee must receive payment for unused vacation.