Payroll and Benefits Guide Mongolia
Last updated: Mar 18, 2025
Contribution
| Employer Payroll Contributions | |
|
8.5%
|
Pension Insurance
|
|
1.0%
|
Benefit Insurance, applied on income up to 6,600,000 MNT monthly.
|
|
2.0%
|
Social Health Insurance (SHI), applied on income up to 6,600,000 MNT monthly.
|
|
0.5% to 2.5%
|
Industrial accident and occupational disease insurance (varies depending on industry)
|
|
0.5%
|
Unemployment insurance
|
|
12.50%- 14.50%
|
Total Employer Cost
|
| Employee Payroll Contributions | |
|
8.5%
|
Pension Insurance, capped at MNT 910,800 per month |
|
1.0%
|
Benefit Insurance , capped at MNT 910,800 per month |
|
2.0%
|
Social Health Insurance (SHI), capped at MNT 910,800 per month |
|
0.2%
|
Unemployment insurance, capped at MNT 420,000 per month |
|
11.70%
|
Total Employee Cost
|
| Employee Income Tax | Annual |
|
10.00%
|
Up to 120 million MNT |
|
15.00%
|
120 million – 180 million MNT |
|
20.00%
|
Above 180 million MNT |
|
20.00%
|
Non-residents are taxed at a flat rate on Mongolian-sourced income. |
Employer taxes
Employee taxes
Minimum Wage
General
The monthly minimum wage is MNT 4,714 per hour or 792,000 MNT per month.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
The payroll cycle in Mongolia is monthly, and salaries must be paid by the 5th of the following month; however, wages are typically paid between the 25th and last day of the month.
13th Salary
There are no provisions in the law regarding 13th salaries.
Working Hours
General
A standard full-time working week in Mongolia consists of 40 hours per week or 8 hours per day. Employees are entitled to two consecutive days of rest generally on Saturday and Sunday.
The new labor law states that employees should not work more than 56 hours per week.
The new labor law requires employers to provide extra pay to employees who work during night hours (10pm-6am) if time off in lieu is not provided. The pay amount must be not less than 1.2 times the respective hourly salary rate. In addition, employers are responsible for covering expenses in relation to preventive medical examinations of full-time night shift workers.
Overtime
| Aspect | Regulation Details |
| Maximum Ordinary Hours | 40 hours per week (8 hours per day). Any work beyond this is considered overtime. |
| Daily Overtime Cap | Overtime work is strictly limited to a maximum of 4 hours per day. |
| Absolute Weekly Cap | The total working hours, including overtime, shall not exceed 56 hours per week. |
| Annual Overtime Cap | While not consistently cited across all formal sources, some sources reference a general limit of 120 hours of overtime per year. The primary restriction is the 56-hour weekly cap. |
| Consent | Overtime is generally voluntary and must be agreed upon by both the employer and employee, except in exceptional circumstances (e.g., national defense, natural disasters). |
| Prohibitions | Overtime is prohibited for minors and restricted for pregnant employees, employees with a child up to 3 years old, or a disabled child up to 16 years old (unless they agree). |
Mandatory Overtime Pay Rates
Overtime compensation is mandatory. The minimum premium rate varies based on the day of the work.
| Day/Condition | Minimum Compensation Rate (Statutory) | Total Pay Rate | Notes |
| Standard Overtime (Working Days) | 1.5 times the employee’s average hourly salary. | 150% | Applies to hours worked beyond 40/week. |
| Weekly Rest Day Work | 1.5 times the employee’s average hourly salary. | 150% | Applies if the employee who worked on the rest day is not given compensatory days off. |
| Public Holiday Work | 2 times the employee’s average hourly salary. | 200% | This double-time rate is the minimum compensation required for work on an official public holiday. |
Compensation Method and Premiums
| Compensation Method | Statutory Requirement | Notes |
| Monetary Pay | Mandatory payment at the applicable premium rate (150% or 200%). | Compensation is calculated on the employee’s average salary (including bonuses) for the period. |
| Time Off in Lieu (TOIL) | Equivalent paid rest time. | Compensatory paid time off may be offered as an alternative to monetary compensation for overtime (150%) or weekly rest day work (150%). |
| Night Work Premium | 1.2 times the respective hourly salary. | 120% |
Leave
Annual Leave (vacation)
Employees are entitled to 15 days of paid annual leave. For employees under the age of 18, the entitlement is 20 days.
Depending on the length of employment, employees are entitled to additional annual leave days:
- 6-10 years of employment: 3 working days
- 11-15 years of employment: 5 working days
- 16-20 years of employment: 7 working days
- 21-25 years of employment: 9 working days
- 25-31 years of employment: 11 working days
- 32 years or more: 14 working days
The new labor law states that employees who were unable to take their annual leave in an annual leave cycle due to an urgent business necessity should be paid an allowance of 1.5 times their respective standard annual vacation pay. Under the new law, new employees are entitled to an annual vacation from the 7th month of the commencement of employment. Furthermore, employees are entitled to 10 consecutive calendar days of leave at least once out of the minimum 15 calendar days leave.
PTO carryover
In Mongolia, statutory annual leave can be carried over if it isn’t taken when due, but it must be used within the legally allowed period (commonly up to 2 years). Employers cannot forfeit accrued statutory leave by policy, and unused leave must be paid out on termination.
Public Holidays
Public holidays that fall on the weekend are usually lost.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 18 February 2026 | Wednesday | Tsagaan Sar (Lunar New Year) – Day 1 | Standard holiday |
| 19 February 2026 | Thursday | Tsagaan Sar – Day 2 | Standard holiday |
| 20 February 2026 | Friday | Tsagaan Sar – Day 3 | Standard holiday |
| 8 March 2026 | Sunday | International Women’s Day | Standard holiday |
| 31 May 2026 | Sunday | Buddha Day (Vesak) | Standard holiday |
| 1 June 2026 | Monday | Children’s Day / Mother and Children’s Day | Standard holiday |
| 11 July 2026 | Saturday | Naadam Festival (National Day) – Day 1 | Standard holiday |
| 12 July 2026 | Sunday | Naadam Festival – Day 2 | Standard holiday |
| 13 July 2026 | Monday | Naadam Festival – Day 3 | Standard holiday |
| 14 July 2026 | Tuesday | Naadam Festival – Day 4 | Standard holiday |
| 15 July 2026 | Wednesday | Naadam Festival – Day 5 | Standard holiday |
| 10 November 2026 | Tuesday | Chinggis Khaan’s Birthday (National Pride Day) | Standard holiday |
| 26 November 2026 | Thursday | Republic Day (Proclamation of the Constitution Day) | Standard holiday |
| 29 December 2026 | Tuesday | National Independence Day | Standard holiday |
Sick Days
Employees are entitled to sick leave for the duration of the illness, sick leave is unpaid.
Maternity Leave
Pregnant employees are entitled to receive 120 days of maternity leave. The maternity leave must begin 60 days before the birth of the child with the remaining 60 days taken after the birth.
Eligible employees (those who have made at least twelve social security contributions with at least 6 monthly contributions in the six months prior to taking maternity leave) receive payments through Mongolia’s social insurance program equivalent to 70% of the average salary and income over the last 12 months.
An adopting mother is entitled to equal leave as a mother who gives birth to a child up to the child reaching 60 days. This law equally applies to single fathers with a newborn.
Paternity Leave
The new labor law provides a father with a newborn shall be provided at least 10 working days of paid leave, which is equal to the average salary for the respective period.
Parental Leave
Childcare leave is granted to mothers and single fathers with children under three years old. During this leave, the employer is responsible for making social insurance payments on the employee’s behalf.
Other Leave
There is no other statutory leave in Mongolia.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
Mongolia makes a distinction between employment agreements and employment contracts. The conditions and requirements for terminating an agreement or a contract vary.
An employment agreement can be terminated under the following circumstances:
- By mutual agreement of the employer and employee
- Upon the death of either the employer or employee
- Expiration of the employment agreement without extension
- If required by law
- An improperly dismissed employee is reinstated to the position (the displaced employee must be provided with another job if possible)
- The employee is called to active military service
- A court sentences the employee to a punishment that prevents the employee from working
- At the initiative of either the employer or employee
An employee generally must provide 30 days of notice to an employer unless otherwise agreed.
An employer can terminate an employment agreement for the following reasons:
- The business is liquidated
- The employee does not meet the job requirements due to a lack of professional qualifications, skills, or health reasons
- The employee has reached retirement age and is eligible for a pension
- The employee has repeatedly violated the employer’s disciplinary rules or has committed a severe violation
- The employee breaches fiduciary responsibility
- The employee gets another job
- Other grounds established in the agreement
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Salary (wages) must be paid on fixed pay-days; the law states wages “shall be paid at least twice a month on fixed pay-days” for those not paid monthly. | Upon termination, the employer must pay all wages and entitlements including severance when applicable. The law requires settlement of amounts due to the employee when the employment contract ends. | The law requires wages to be paid in monetary form in the national currency (tugrug). |
Notice Period
The notice period in Mongolia is generally 30 days for economic redundancy or incompetency and 45 days in all other cases.
Severance Pay
Severance pay is generally one month’s wages on dismissal.
Probation Period
The maximum length of probation is generally three months.
Immigration
On 24 December 2021, the Parliament of Mongolia passed the Labour Migration Law (the “LML”) effective from 01 July 2022. Once the LML is effective, its preceding law, the Law on Sending Labour Force Abroad and Receiving Labour Force and Specialists From Abroad (12 April, 2001), shall no longer be in force.
Employers are required to submit an application for a work permit of a foreign employee on behalf of the employee to the labor authority after they are permitted to invite the foreign employee. The labor authority issues a work permit to the foreign employee for up to one year subject to the job position and terms of the employment agreement. Detailed procedures for granting work permits shall be approved by the Ministry of Labor and Social Protection.
The work permit shall specify the full name and nationality of the foreign employee, name of the employer, the workplace location, and validity period of the work permit.
Extension of a work permit of a foreign employee: A work permit granted to a foreign employee can be extended subject to applicable regulations. The continuous employment of a foreign employee in an assistant position in Mongolia shall not exceed a period of 5 years.
VAT
General
The standard rate of VAT in Mongolia is 10%.
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Payroll and Benefits Guide
in Mongolia
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 |
| 18 February 2026 | Wednesday | Tsagaan Sar (Lunar New Year) – Day 1 | Standard holiday |
| 19 February 2026 | Thursday | Tsagaan Sar – Day 2 | Standard holiday |
| 20 February 2026 | Friday | Tsagaan Sar – Day 3 | Standard holiday |
| 8 March 2026 | Sunday | International Women’s Day | Standard holiday |
| 31 May 2026 | Sunday | Buddha Day (Vesak) | Standard holiday |
| 1 June 2026 | Monday | Children’s Day / Mother and Children’s Day | Standard holiday |
| 11 July 2026 | Saturday | Naadam Festival (National Day) – Day 1 | Standard holiday |
| 12 July 2026 | Sunday | Naadam Festival – Day 2 | Standard holiday |
| 13 July 2026 | Monday | Naadam Festival – Day 3 | Standard holiday |
| 14 July 2026 | Tuesday | Naadam Festival – Day 4 | Standard holiday |
| 15 July 2026 | Wednesday | Naadam Festival – Day 5 | Standard holiday |
| 10 November 2026 | Tuesday | Chinggis Khaan’s Birthday (National Pride Day) | Standard holiday |
| 26 November 2026 | Thursday | Republic Day (Proclamation of the Constitution Day) | Standard holiday |
| 29 December 2026 | Tuesday | National Independence Day | Standard holiday |
Questions & Answers