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.

Employers must warn employees one month in advance of termination.

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.

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.

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.

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

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.

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.

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.

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.

Afghan afghani (AFN)