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Kazakhstan Payroll Taxes and Costs 2013

Kazakhstan Payroll Taxes and Costs 2013

  1. Personal income taxThe personal income tax rate is 10%.
    Income in the form of dividends received from sources in and outside Kazakhstan are taxed at a rate of 5% (Article 158 (1),(2) Code of the Republic of Kazakhstan No. 99-IV On Taxes and Other Mandatory Payments to the Budget dated December 10, 2008).
    The income of individuals in the form of taxable and non-taxable income at the source of payment is subject to personal income tax. The tax period for tax agents to calculate personal income tax on income taxable at the source of payment is the calendar month.The tax agent is to calculate and withheld the personal income tax on the income of non-residents taxable at the source of payment no later than the date of payment of income. In case of payment of income in a foreign currency, the taxable income is to be converted into Kazakhstan tenge using the exchange rate applicable at the date of payment of income (Article 201 (1) Code of the Republic of Kazakhstan No. 99-IV On Taxes and Other Mandatory Payments to the Budget dated December 10, 2008).
  2. Insurance contributions and insuranceContributions to Pension Fund
    Mandatory pension contributions of 10% are withheld from employees’ monthly income (Article 25 (1) Kazakhstan Law No. 105-V On Pension Benefits in the Republic of Kazakhstandated June 21, 2013). Employers are required by law to withhold and transfer pension contributions.Voluntary pension contributions can also be made to a pension savings fund and/or a voluntary pension savings fund.Contributions to Social Insurance Fund
    As a general rule, employees and self-employed, including foreign nationals and stateless individuals, permanently residing and carrying out income-generating activities in Kazakhstan are to pay mandatory social insurance (Article 8 Kazakhstan Law No. 405-II On Mandatory Social Insurance dated April 25, 2003).

    Mandatory social insurance is to provide benefits in case of:

    1. disability;
    2. loss of a breadwinning spouse;
    3. loss of work;
    4. loss of income due to pregnancy and childbirth;
    5. loss of income due the adoption  of newborn child(ren);
    6. loss of income due to childcare provided to a child up to the age of 1.

Social contributions represent 5 % of the payment of salaries (Article 14 Kazakhstan Law No. 405-II On Mandatory Social Insurance dated April 25, 2003). This rate applies to the amounts paid as income to employees.
The monthly income taken into account for the calculation of social contributions does not exceed the tenfold sum of the minimum wage set by law (Article 15 (2) Kazakhstan Law No. 405-II On Mandatory Social Insurance dated April 25, 2003 (as amended on 03.07.2013)). As of January 1, 2013 the minimum wage amounted to 18,660 tenge (Article 9 Kazakhstan Law No. 54-V On the National Budget for 2013-2015 dated November 23, 2012).

Accident insurance
Employers must enter into an accident insurance policy for their employees within 10 working days from the date of registration of the company (Article 8 (2 (1-1)) Kazakhstan Law N 30 Compulsory Insurance Against Accidents Upon Performance of Work Duties dated February 7, 2005).  The insurance premium under the accident insurance policy is determined by agreement of the parties on the basis of a special insurance rate, which is dependent on the professional risks, multiplied by the wage fund for a particular staff category (Article 17 (1, 2) Kazakhstan Law N 30 Compulsory Insurance Against Accidents Upon Performance of Work Duties dated February 7, 2005).

  1. Social taxThe payment of salaries to employees is subject to social tax (Article 357 (2) Code of the Republic of Kazakhstan No. 99-IV On Taxes and Other Mandatory Payments to the Budget dated December 10, 2008). The social tax rate for resident legal entities and for non-resident legal entities operating through a permanent establishment is 11%. This rate applies to the amounts paid as income to employees.The amount of social tax payable to the budget is determined as the difference between accrued social tax and the amount of social contributions accrued as prescribed by the Kazakhstan law On Mandatory Social Insurance. If the amount of social contributions to the Social Insurance Fund exceeds the amount of accrued social tax, the amount of social tax payable to the budget is deemed to be zero (Article 359 (3) Code of the Republic of Kazakhstan No. 99-IV On Taxes and Other Mandatory Payments to the Budget dated December 10, 2008).
  1. Overtime, weekend pay and vacationOvertime
    Overtime means the work performed by an employee at the employer’s initiative beyond the established working hours (Article 1 (79 (1)) Kazakhstan Labor Code). In case of a 5-day working week, the duration of a working day may not exceed 8 hours for a standard working week of 40 hours. In case of a 6-day working week, the duration of a working day may not exceed 7 hours for a standard working week of 40 hours (Article 82 (1,2) Kazakhstan Labor Code).

    As a general rule, employees may be invited to work overtime only with their written consent (Article 88 (2) Kazakhstan Labor Code) and pregnant women and employees under the age of 18 may not work overtime.
    Overtime may not exceed 2 hours in a day and 1 hour for heavy work or work with hazardous working conditions. Overtime may not exceed 12 hours per month and 120 hours per year.
    If employees are paid by the hour, overtime is paid at least one and a half times the regular hourly rate. If employees are paid by the piece, overtime is paid at least 50% of the employee’s salary (Article 127 Kazakhstan Labor Code).

    Work on weekends and public holidays
    As a general rule, employees are not permitted to work on weekends and public holidays without their written consent (Article7 (9(1)) Kazakhstan Labor Code). The work performed on weekends and public holidays is paid at least double the daily (hourly) rate usually paid to the employee (Article 128 Kazakhstan Labor Code).

    Vacation
    Employees are entitled to paid annual leave, which is divided into main paid annual leave and additional paid annual leave (Article 100 Kazakhstan Labor Code).
    Annual leave is paid on the basis of the average salary for the 12 months preceding the leave (Item 2 Rules of Calculation of Average Salary approved by Decree N 1394 of the Government of the Republic of Kazakhstan dated December 29, 2007).

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