4. Types of leave

There is no information about the types of leave for this country.
Learn more about types of leave >

Paid time off

Depending on their age, type of employment, and duration of service, employees earn between 20 and 30 days of paid yearly leave. The majority of employees are given 20 days of paid vacation each year.

Public holidays

There are seventeen public holidays in Afghanistan.

Sick days

Employees are entitled to 20 paid sick days per year. A doctor's note or a note from a health organization may be required if an employee is unwell for more than five days in a row.

Maternity leave

Employees who are women are entitled to 90 days of paid maternity leave. The first thirty days are taken before the birth, while the last sixty days are taken after the delivery.

Paternity leave

Employees are entitled to 20 paid sick days per year. A doctor's note or a note from a health organization may be required if an employee is unwell for more than five days in a row.

Parental leave

Other than the mentioned terms for maternity leave, there are no other provisions in the Afghanistan law regarding parental leave.

Other leave

5. Employment termination

There is no information about employment information for this country.

Termination process

The following are the essential circumstances for terminating a work contract: mutual agreement, retirement, death, disability, or incapacity that will make it difficult to perform the job, long cessation of work for a period of at least six months, dissolution of the organization or reduction in the number of employees, final conviction to prevent work continuation, and repeated breaches of work after being disciplined.

Notice period

Employers must warn employees one month in advance of termination.

Probation period

Both contracting parties can agree on a probationary period for employment. The parties may terminate the contract by notifying one another during this time period, which cannot exceed three months.

Severance pay

Employers are required to pay severance to employees in a variety of circumstances, with the amount determined by the employee's years of service. Severance pay should be paid to the employee's legal inheritor in the event of their death.

6. Working hours

There is no information about the working hours for this country.

General working schedule

The standard work week in Afghanistan is 40 hours over five days.

Overtime

Employees are entitled to a percentage of basic wages for overtime during the work week, weekends and holidays. Special rules apply to younger workers for work performed at night.

7. Minimum wage

There is no information about the working hours for this country.

There is no minimum wage in Afghanistan for permanent employees in the private sector. Monthly earnings for nonpermanent private sector employees must be at least 5,500 AFN. For permanent government employees, the monthly minimum wage is 6,000 AFN. These wages are based on a 40-hour workweek.

8. Employee benefits

There is no information about the working hours for this country.

Many workers have access to social security. These funds are often a mix of company contributions and deductions from the employees' monthly pay. Some companies opt to pay for all of their workers' social protections. These funds are critical to employees' post-retirement lives. Companies may also provide social protections to workers as a complement to their pay while they are on the job.

Special conditions may entitle an employee and their family for additional social benefits. Workers in these circumstances may get food allowances, transportation, assistance in locating housing, medical services, assistance with delivery, a pension for prolonged sickness or incapacity, and financial assistance equivalent to ten months of pay for a dead employee's funeral ceremony.

The funds for these social safeguards come from a company's budget. Pension payments are made from a special fund inside the employer's organization. Financial assistance for old-age retirement should equal 10 months of earnings plus the employee's benefits.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

All companies in Afghanistan are required to pay a corporate tax of 20 percent.

Individual income tax

Individuals in Afghanistan are subject to tax at progressive rates, calculated monthly.

Individuals with a monthly income of 0 to 5,000 afghani are subject to a 0 percent income tax rate. For individuals with a monthly income between 5001 and 12,500 afghani are subject to a 2 percent income tax rate. Individuals with a monthly income of 12,501 to 100,000 afghani are subject to a 10 percent income tax rate plus 150 afghani. Individuals with a monthly income beyond 100,001 are subject to a 20 percent income tax rate plus 8,900 afghani.

VAT, GST and sales tax

Afghanistan levies a 10% value-added tax (VAT). However, the current legislation does not cover all products and services (hotels are affected for example). The government is presently considering broadening the scope of this tax.

VAT has an impact on both local businesses and their trading partners. The domestic tax payer is required to pay VAT on taxable supplies, and the importer is required to pay VAT on taxable imports. Once adopted, VAT will replace the business receipts tax on all imports.

10. VISA and work permits

There is no information about the working hours for this country.

To enter and exit Afghanistan, US citizens must have a valid passport and an Afghan visa. Travelers who arrive without a valid visa face deportation or the confiscation of their passport, as well as heavy fines.

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

A valid employment contract must contain:

Proof of legitimacy,

A description of the job and any necessary skills,

The employee’s wages, rights, and privileges,

The employee’s expected working time, in accordance with the code,

The worker’s leave,

The location of the work site,

The duration of time that the contract will be valid,

Date and signatures, and

Parental signatures if the contracted party is younger than 18 years of age.

The employer must prepare three copies of the employment contract and deliver one to the worker and one to the Ministry of Labor, Social Affairs, Martyrs, and the Disabled (MoLSAMD). The third copy must be kept by the employer in their Human Resources department.

A probationary term of three months or less may be included in an employment contract.

Minimum assignment length

Fixed-term contracts must be for a period of one year. Employers and workers may prolong this form of contract with mutual permission.

In a fixed-term contract, if the parties do not take action within one month of the agreement's expiration, the contract is deemed renewed on the same terms.

Part-time workers may be hired by employers in certain justifiable situations or where there is a unique necessity. Part-time contracts may be entered into in two ways under Afghan law:

A part-time contract in which the employee must work at least three hours each day but not as many as full-time employees; or

A part-time weekly contract in which the employee works for at least three days each week but no more than one week.

Part-time employees are not eligible for pensions or paid time off.

Payment currency

Afghan afghani (AFN)

13.Opening a subsidiary in Afghanistan

There is no information about the working hours for this country.

How to set up a subsidiary

To form a subsidiary legally, your business must:

1. Engage the services of a lawyer to register your company and complete all required paperwork.

2. Decide on the most appropriate business model for your in-country firm.

3. Register with the Central Business Registry of the Ministry of Commerce and Industry (MoCI).

4. Obtain a tax identification number (TIN) from the Afghanistan Revenue Department or a Mustufiat office in your neighborhood.

5. Obtain the necessary permissions and licenses for your industry.

6. Publicize information about the subsidiary's operations in the Official Gazette.

Subsidiary laws

A multinational firm may establish a subsidiary in the form of a sole proprietorship/branch office, a partnership, a limited liability company, or a corporation. There are few advantages to selecting a branch entity. Your parent firm and subsidiary are indistinguishable from their owner under that model. To mitigate risk, the majority of employers form a limited liability corporation.

Depending on the company model you pick, you may need to cooperate with in-country directors or shareholders. This choice will also provide you with an estimate of the time required to create your subsidiary.

13. Why choose Rivermate as your Employer of Record / PEO in Afghanistan

Establishing an entity in

Afghanistan

to hire a team takes time, money, and effort. The labor law in

Afghanistan

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Afghanistan

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Afghanistan

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Afghanistan

via our Employer of Record / PEO solution.

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