Overview
Payroll Cycle
Employer Contributions
Employee Contributions
Minimum Wage
Hiring
Hiring Employees
Hiring Contractors
Hiring Expats
Background Checks
Employment Contracts
Onboarding
Employee Benefits
Social Security
Healthcare and Insurance
Leave Policy
Public Holidays
Work Permit and Work Visa
Probation Period
Notice Period
Termination and Severance
Personal Income Tax
An employer of record in Kazakhstan helps you discover valuable insights about the local labor laws and regulations. Partnering with a professional service provider can assist you with navigating the intricacies of the payroll cycle, employer and employee contributions, minimum wage requirements, hiring procedures for employees, contractors, and expats, compliance with background checks, employment contracts, onboarding processes, employee benefits including social security, healthcare, and insurance, leave policies, public holidays, work permit and work visa regulations, probation and notice periods, termination and severance guidelines, as well as personal income tax obligations. They serve as your trusted ally in understanding and adhering to the complex employment landscape of Kazakhstan.
| Continent | Asia |
| Country | Kazakhstan |
| Capital | Astana |
| Time zone | UTC+05:00 — western Kazakhstan (Aktobe, Atyrau, Kyzylorda, Mangystau and West Kazakhstan) |
| Total Time zones | 2 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | 31st March |
| Financial Year | 1st January to 31st December |
Employee Benefits in Kazakhstan
Mandatory Employee Benefits
In Kazakhstan, there are mandatory employee benefits that encompass pension, paid time off (PTO), and employment insurance. Additionally, there are supplementary employee benefits such as medical insurance, virtual care, and voluntary benefits.
Pension System
Citizens of the Republic of Kazakhstan, as well as foreigners and stateless individuals residing permanently in the country, have the right to receive pension payments, unless stated otherwise by laws and international treaties. The Constitution of the Republic of Kazakhstan guarantees citizens a minimum wage and pension, as well as social security in cases of age-related issues, illness, disability, loss of a breadwinner, and other legally recognized grounds. The pension system in Kazakhstan is structured into multiple levels, including basic, mandatory, and voluntary levels.
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Basic Level
The basic level involves the provision of a state basic pension benefit funded by the republican budget. This benefit is granted to citizens and individuals who permanently reside within the territory of the Republic, once they reach the retirement age. It is independent of receiving any other form of pension, whether it be solidarity or funded pension.
Currently, more than 2.276 million people are beneficiaries of the state basic pension benefit. On July 1, 2018, there were changes made to the methodology of pension granting, introducing a new mechanism for determining the basic pension. Here are the key features of the new system:
- If an individual has participated in the pension system for 10 years or less, or has no participation history, the basic pension amount will be 54% of the subsistence level (SL).
- For each additional year of work beyond the initial 10 years, the basic pension increases by 2%. For instance, with 20 years of experience, the basic pension would be 74% of the subsistence level, while with 30 years of experience, it would be 94% of the subsistence level. If an individual has 33 years or more of experience, the basic pension would reach 100% of the subsistence level.
- The length of participation in the pension system is determined by various factors, including work experience prior to January 1, 1998, and cumulative experience after that date. Additionally, other socially significant periods are considered, such as caring for a child under 3 years (within 12 years), providing care for a disabled person of the first group, individuals disabled from childhood until the age of 16, single disabled individuals of the second group, elderly pensioners who require external assistance, individuals aged 80 or above, and individuals disabled from childhood until the age of 18. The duration of residence is also taken into account for spouses of military personnel, employees of special agencies, and diplomatic workers.
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Mandatory Level
The mandatory level encompasses a pension system that combines the solidarity system funded by the republican budget and the Unified Accumulative Pension Fund (UAPF). This level necessitates both mandatory pension contributions and mandatory professional pension contributions.
As part of the transition towards a funded pension system, which requires compulsory pension contributions from all employees, every employer is obligated to regularly transfer 10% of an employee's monthly income (up to 75 times the minimum wage) to the employee's retirement account opened in the UAPF.
According to Article 31 of the Law, individuals who have accumulated pension savings in the UAPF are entitled to pension payments under the following circumstances:
- Upon reaching the retirement age of 61 years for women and 63 years for men.
- If the accumulated pension funds are sufficient to ensure payment not below the minimum pension, individuals can enter into a pension annuity contract at the age of 55 for men and 53 for women.
- Disabled individuals belonging to the first and second disability groups are eligible for pension payments if the disability is established as indefinite.
- Foreigners and stateless persons who have permanently left the Republic of Kazakhstan and have provided documents confirming their departure are also eligible for pension payments.
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Voluntary Level
The voluntary level involves payments made from voluntary pension contributions. Voluntary pension contributions refer to the funds that employees choose to contribute to the Unified Accumulative Pension Fund (UAPF) or a voluntary accumulative pension fund, either for their own benefit or for the benefit of third parties. The rate and payment period of these contributions are determined by the pension provision contract associated with voluntary pension contributions. Contributors of voluntary pension contributions can be individuals or legal entities who voluntarily make these contributions using their own resources.
Paid Time Off
According to Article 99 of the Labor Code, specific leave entitlements are granted to pregnant women, women who have given birth to a child/children, and individuals, both women and men, who have adopted a newborn child/children:
- Maternity leave
- Leave for employees who have adopted a newborn child/children
- Leave without pay for childcare until the child reaches the age of 3 years
Maternity leave lasts for 126 calendar days, with 70 days before the birth and 56 days after the birth. In the case of complicated births or the birth of multiple children, 70 days are provided. The number of annual leave days is not dependent on the duration of employment, meaning the length of time worked for the employer does not affect the entitlement.
In addition to maternity leave, there is an option for unpaid leave for childcare for a maximum period of 3 years. As per Article 99 of the Code, this leave can be taken by either the father or mother of the child. If the child is left without parental care, the next of kin who will be involved in the upbringing of the child can also take this leave.
For non-working women, there are one-time state benefits for the birth of a child, one-time social payment for cases of income loss due to pregnancy and childbirth, or adoption of a newborn child (children), and a monthly social allowance for child care once the child reaches one year of age. For working women, there is a monthly social benefit in case of income loss related to childcare upon the child reaching the age of one year.
Employment Insurance
Employment insurance provides monthly compensation to employees for the loss of earnings resulting from a certain degree of occupational incapacity, ranging from 30% to 100%. This compensation is administered by the insurer.
The calculation of lost earnings considers the average monthly earnings, limited to a maximum of 10 times the minimum earnings. This calculation is determined annually by law, based on the conclusion date of mandatory accident insurance.
Compulsory pension contributions are deducted and transferred from the insurance payments made by the insurer as compensation for lost earnings to the unified retirement savings fund.
The total amount of insurance payments for additional expenses incurred due to health injuries is subject to the following limits (based on the monthly calculation indices established in the relevant financial year by the law on the republican budget):
- For a degree of occupational incapacity between 30% and 59% (inclusive) - 500
- For a degree of occupational incapacity between 60% and 89% (inclusive) - 750
- For a degree of occupational incapacity between 90% and 100% (inclusive) - 1000