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
Kyrgyzstan Employer of Record provides comprehensive services for businesses operating in Kyrgyzstan, offering expertise in payroll cycle management, employer and employee contributions, minimum wage compliance, hiring procedures for employees, contractors, and expatriates, background checks, employment contracts, onboarding processes, employee benefits administration, social security, healthcare and insurance coverage, leave policies, public holidays, work permits and work visas, probation and notice periods, termination procedures, severance obligations, and personal income tax compliance, all without the need to establish a new legal entity.
| Continent | Asia |
| Country | Kyrgyzstan |
| Capital | Bishkek |
| Time zone | UTC+06:00 |
| Total Time zones | 1 |
| Personal Tax filing deadline | For self-reporting by individual: 1 April of the year following the reporting year. |
| Financial Year | NA |
Mandatory Employee Benefits in Kazakhstan:
Pension:
In accordance with Article 28 of the Constitution of the Republic of Kazakhstan, citizens, foreigners, and stateless individuals residing permanently in the country are entitled to pension payments, unless specified otherwise by laws and international agreements. The pension system in Kazakhstan is structured into three levels: basic, mandatory, and voluntary.
The first level, the basic pension, is provided by the state through the republican budget. When individuals reach the retirement age, they become eligible for the state basic pension benefit, irrespective of receiving other types of pensions. The size of the basic pension is determined based on the length of participation in the pension system, with additional years of work contributing to an increase in the benefit percentage.
As of July 1, 2018, the calculation methodology for the basic pension has changed. For individuals with less than 10 years of participation in the pension system or no participation at all, the basic pension is set at 54% of the subsistence level (SL). Each year of work beyond 10 years increases the basic pension by 2%. For instance, an individual with 20 years of experience would receive a basic pension equivalent to 74% of the subsistence level, while someone with 30 years of experience would receive 94% of the subsistence level. Individuals with 33 or more years of experience are eligible for a basic pension equal to 100% of the subsistence level.
The calculation of participation in the pension system includes work experience before January 1, 1998, as well as accumulative experience (payment of pension contributions) after that date. Other socially significant periods, such as caring for a child under 3 years, caring for a disabled person of the first group, and periods of disability from childhood to 16 years, are also considered in determining pension eligibility. Residence time for certain categories of individuals, such as spouses of military personnel, employees of special agencies, diplomatic workers, as well as individuals aged 80 and above and disabled individuals from childhood to 18 years, is also taken into account.
These mandatory employee benefits form an integral part of the employment landscape in Kazakhstan, ensuring social security and financial stability for workers during various stages of their lives.
The second level of the pension system
The second level of the pension system in Kazakhstan is the mandatory pension, which involves contributions from both the solidarity system (republican budget) and the Unified Accumulative Pension Fund (UAPF). This level requires mandatory pension contributions and mandatory professional pension contributions.
The transition to a funded pension system means that all employees are required to make regular contributions to their retirement accounts, with each employer responsible for transferring 10% of the employee's monthly income (not exceeding 75 times the minimum wage) to the UAPF.
According to Article 31 of the Law, individuals with pension savings in the UAPF are eligible for pension payments in the following circumstances:
- When they reach the retirement age, which is 61 years for women and 63 years for men.
- If their pension accumulations are sufficient to provide a payment equal to or higher than the minimum pension, individuals can enter into a pension annuity contract and start receiving payments at the age of 55 for men and 53 for women.
- Disabled individuals of the first and second groups are eligible for pension payments if their disability is established indefinitely.
- Foreigners and stateless individuals who have permanently left Kazakhstan and can provide supporting documents confirming their departure.
The third level of the pension system
The third level of the pension system is voluntary and involves payments from voluntary pension contributions. Employees can contribute their own money to the UAPF or a voluntary accumulative pension fund for themselves or on behalf of third parties. The rate and payment period for voluntary pension contributions are determined by the contract for pension provision using voluntary contributions.
Contributors of voluntary pension contributions can be either natural or legal persons who make these contributions at their own expense. The voluntary level provides an additional avenue for individuals to enhance their pension savings in Kazakhstan.
Paid Time Off
Under Article 99 of the Labor Code, certain individuals in Kazakhstan are entitled to various types of leave related to the birth of a child. These include:
- Maternity Leave: Pregnant women, women who have given birth, and women and men who have adopted a newborn child are eligible for maternity leave. Maternity leave lasts for a total of 126 calendar days, with 70 days taken before the birth and 56 days taken after the birth. In the case of complicated births or the birth of multiple children, 70 days are given. The duration of the employment does not affect the number of annual leave days, so it is not a factor in determining the entitlement.
- Leave for Employees Who Adopted a Newborn Child: Employees who have adopted a newborn child can also take leave. The specific duration of this leave is not mentioned.
- Leave Without Pay for Childcare: In addition to maternity leave, there is an option for leave without pay for childcare, which can be granted for up to 3 years. This leave can be taken by either the father or mother of the child, or by a close relative who will be involved in the child's upbringing if the child is left without parental care.
There are various types of payments and allowances available in connection with childbirth and childcare:
- One-time state benefits for the birth of a child
- One-time social payment for cases of income loss due to pregnancy, childbirth, or adoption of a newborn child
- Monthly social allowance for child care after the child reaches one year of age
- Monthly social benefit in case of income loss due to childcare after the child reaches one year of age
Working women who participate in the compulsory social insurance system are entitled to additional social benefits, as their employers contribute to social contributions.
The calculation of a lump sum payment for parental leave is applicable only to working women. The amount is determined based on the social deductions made during the 12 months preceding the onset of the social risk, regardless of the duration of employment. To calculate the payment amount, the average monthly income for the last 12 months, on which social contributions have been paid, is multiplied by the corresponding number of days of incapacity for work and then reduced by 10% for pension contributions.
In summary, Kazakhstan provides certain benefits and allowances to individuals taking leave for childbirth and childcare, including maternity leave, leave for adoptive parents, and leave without pay for childcare. Various one-time state benefits and monthly social allowances are also available, with specific payment calculations for working women.
Employment Insurance
In Kazakhstan, employment insurance is a monthly payment provided to employees as compensation for loss of earnings due to a degree of occupational incapacity ranging from 30% to 100%. The insurer is responsible for making these payments.
When calculating the compensation for lost earnings, the average monthly earnings are considered, but they cannot exceed 10 times the minimum earnings. This calculation is determined by law for the specific financial year when the mandatory accident insurance contract is concluded.
Compulsory pension contributions are deducted from the insurance payments made by the insurer as compensation for lost earnings and are transferred to the unified retirement savings fund.
There are limits to the total amount of insurance payments for compensating additional expenses resulting from injury. These limits are set based on the monthly calculation indices established by the law on the republican budget for the relevant financial year:
- For a degree of occupational incapacity ranging from 30% to 59% (inclusive), the maximum compensation is 500.
- For a degree of occupational incapacity ranging from 60% to 89% (inclusive), the maximum compensation is 750.
- For a degree of occupational incapacity ranging from 90% to 100% (inclusive), the maximum compensation is 1000.
These limits ensure that the compensation provided for additional expenses caused by health injuries is within specified thresholds based on the degree of occupational incapacity.
Supplementary Employee Benefits
In addition to the mandatory employee benefits in Kazakhstan, larger employers often offer a range of voluntary benefits to their employees. These voluntary benefits are provided at discounted prices through the employer and can include personal accident insurance, critical illness coverage, and even specific coverage related to COVID-19.
Gymnasiums
Some employers go a step further by providing on-site gym facilities for their employees. However, smaller employers may offer gym subsidies or access to gyms at lower corporate rates. Many employers choose to subsidize this benefit through wellness accounts, allowing employees flexibility in choosing wellness options that go beyond standard gym memberships.
Virtual Care
Virtual care services are gaining popularity among employers in Kazakhstan. Through these services, employees can access nutritionists, naturopaths, and mental health specialists for free through their health insurance policy. While online doctor visits may have a per-appointment charge, some services even include prescriptions and delivery through a dedicated app.
Mental Health Training
Recognizing the importance of mental health, many employers now provide leadership training programs focused on mental health, anti-stigma campaigns, as well as mindfulness and stress reduction programs. These initiatives aim to promote mental well-being in the workplace and create a supportive environment for employees.