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Kazakhstan

449 EUR per employee per month

Discover everything you need to know about Kazakhstan

Hire in Kazakhstan at a glance

Here ares some key facts regarding hiring in Kazakhstan

Capital
Astana
Currency
Kazakhstani Tenge
Language
Russian
Population
18,776,707
GDP growth
4.1%
GDP world share
0.2%
Payroll frequency
Monthly
Working hours
40 hours/week

Overview in Kazakhstan

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Employer of Record in Kazakhstan

Rivermate is a global Employer of Record company that helps you hire employees in Kazakhstan without the need to set up a legal entity. We act as the Employer of Record for your employees in Kazakhstan, taking care of all the legal and compliance aspects of employment, so you can focus on growing your business.

How does it work?

When you hire employees in Kazakhstan through Rivermate, we become the legal employer of your staff. This means that we take on all the responsibilities of an employer, while you retain the day-to-day management of your employees.

You as the company maintain the direct relationshiop with the employee, you allocate them the work and manage their performance.
Rivermate takes care of the local payrolling of the employee, the contracts, HR, benefits and compliance.

Responsibilities of an Employer of Record

As an Employer of Record in Kazakhstan, Rivermate is responsible for:

  • Creating and managing the employment contracts
  • Running the monthly payroll
  • Providing local and global benefits
  • Ensuring 100% local compliance
  • Providing local HR support

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for:

  • Day-to-day management of the employee
  • Work assignments
  • Performance management
  • Training and development

Taxes in Kazakhstan

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  • Social Tax: Employers in Kazakhstan pay a 9.5% tax on employee gross salaries.
  • Social Contributions: A 3.5% contribution is required from employers for Kazakhstani citizens, not applicable to expatriates without permanent residency.
  • Obligatory Pension Contributions (OPC): Employers withhold 10% of the employee's gross salary for the pension fund.
  • Obligatory Professional Pension Contributions (OPPC): An additional 5% is required for employees in harmful work conditions.
  • Obligatory Medical Insurance Contributions: Employers contribute 3% and employees 2% of the gross salary for Kazakhstani citizens.
  • Corporate Income Tax (CIT): The standard rate is 20%, calculated from taxable income.
  • Other Taxes and Contributions: These include a 10% Individual Income Tax (IIT) withheld by employers, Property Tax, Land Tax, and Vehicle Tax.
  • Payment Deadlines: Most payroll taxes and contributions are due monthly by the 25th; CIT is paid annually with potential advance payments for larger taxpayers.
  • Standard and Additional Deductions: Various deductions are available such as for insurance premiums, medical expenses, and mortgage interest.
  • Value-Added Tax (VAT): The standard rate is 12%, with exemptions for essential services and a zero rate for exports and certain transactions. Recent changes require foreign suppliers of electronic services to register for VAT.
  • Investment Incentives: These include tax credits, exemptions in Special Economic Zones, and alternative tax options for specific industries.

Leave in Kazakhstan

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  • Paid Annual Leave: Employees in Kazakhstan are entitled to a minimum of 24 calendar days of paid vacation per year, excluding official holidays. This leave accrues throughout the year and can be carried over to the next year, but should generally be used within three years.

  • Compensation for Unused Leave: Upon termination of employment, employees are compensated for any unused vacation time. The Labor Code prohibits substituting annual leave with monetary compensation except at termination.

  • Extended Leave for Hazardous Work: Additional paid vacation days are granted to those working under hazardous or harmful conditions, with the amount depending on the specific work environment.

  • National Holidays: Kazakhstan observes several national holidays, including New Year's Day, International Women's Day, Nauryz Meyramy, and Independence Day, among others.

  • Religious Holidays: Major religious holidays include Orthodox Christmas and Qurban Ait (Eid al-Adha), with dates varying for Islamic holidays based on the lunar calendar.

  • Other Types of Leave: The Labor Code also provides for sick leave with a medical certificate, unpaid social leave at the employer's discretion, and special leave for personal events like marriage or bereavement.

The Labor Code of the Republic of Kazakhstan governs these regulations, overseen by the Ministry of Labor and Social Protection of the Population.

Benefits in Kazakhstan

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In Kazakhstan, employers are required to provide a comprehensive benefits package that includes social insurance, paid time off, and additional health and wellness programs. The social insurance system covers pensions, disability, survivor pensions, and basic healthcare, with employers contributing 10% of an employee's gross salary to a mandatory pension fund. Employees enjoy a minimum of 24 days of paid annual leave, public holidays, and specific leaves for maternity and other life events.

Health benefits extend beyond basic coverage through employer-provided health insurance plans, which may include dental and vision care. Employers also contribute 3% of monthly salaries to Mandatory Social Health Insurance (MSHI), which covers various medical services. Employees can opt for private health insurance for more comprehensive coverage.

The pension system is multi-tiered, involving mandatory contributions to the Unified Accumulative Pension Fund and optional private pension plans. Employees can increase their retirement savings through voluntary contributions and employer-sponsored plans.

Work-life balance is supported by flexible work arrangements and potentially more generous PTO policies than the legal minimum. Overall, these benefits aim to enhance financial security and improve the well-being of employees in Kazakhstan.

Workers Rights in Kazakhstan

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In Kazakhstan, employment termination and workplace regulations are comprehensively outlined in the Labor Code of the Republic of Kazakhstan. The Code specifies valid reasons for employment termination, including mutual agreement, expiry of a fixed-term contract, employee initiative, and employer's bankruptcy or liquidation. Employer-initiated dismissals can occur due to reasons such as repeated failure to perform duties, gross violations, absenteeism, and theft, among others.

Employers must provide at least one month's written notice for termination, except when a fixed-term contract expires. Severance pay is mandated in cases like employer liquidation, staff reduction, and termination due to health reasons or refusal to relocate with the employer.

Discrimination in employment is prohibited on grounds of gender, race, and other characteristics, with the Constitution and Labor Code providing a framework against discrimination. Complaints can be addressed to State Labor Inspectorates, the prosecutor's office, or through civil courts.

The Labor Code also sets standards for working hours, rest periods, and ergonomic requirements, emphasizing a 40-hour workweek, with provisions for overtime and rest. Employers are obligated to ensure a safe work environment, conduct risk assessments, provide appropriate training and personal protective equipment, and report accidents.

Employee rights under the health and safety framework include the right to a safe workplace, access to safety training, and the right to refuse unsafe work. The Committee for Occupational Safety enforces these regulations through inspections and can issue fines for non-compliance. Additionally, Kazakhstan's Social Insurance Law supports employees with work-related injuries or illnesses financially and medically.

Agreements in Kazakhstan

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In Kazakhstan, the Labour Code governs various types of employment agreements, including indefinite term contracts, fixed-term contracts, and contracts for specific work or replacement. Indefinite term contracts, which do not have a set end date, are the most prevalent, providing significant job security. Fixed-term contracts are used for temporary roles or specific projects, with a duration typically between three months and one year, and can be renewed twice with each extension lasting at least one year. Contracts for specific work or replacement end when the task is completed or the replaced employee returns.

The Labour Code also mandates that employment agreements contain essential clauses such as identification of parties, job details, remuneration and benefits, work schedule, leave provisions, termination clauses, confidentiality, and intellectual property rights. Additionally, it outlines the rules for probationary periods, which can last up to three months for most positions and up to six months for higher-level roles, with a shortened period for short-term contracts.

The Code also addresses confidentiality and non-compete clauses. While confidentiality clauses are strongly enforced to protect sensitive information, non-compete clauses have limited legal weight and must be carefully tailored to be enforceable. Employers are advised to consult legal experts to ensure compliance with these provisions and to effectively manage employment relationships within the framework of Kazakhstani labor laws.

Remote Work in Kazakhstan

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  • Article 138 of the Labor Code of Kazakhstan (2015) defines remote work and allows both employers and employees to mutually agree to switch to remote work arrangements. It specifies that details like working hours, communication methods, and compensation should be outlined in a supplementary agreement to the employment contract.

  • Draft Law and Developments: A draft law is in progress that would allow employees to request remote work arrangements, indicating a shift towards more employee-centric policies.

  • Importance of Clear Contracts: Due to the lack of a comprehensive legal framework, it's crucial for remote work agreements in Kazakhstan to clearly define aspects such as the nature of work, working hours, and compensation.

  • Technological Infrastructure: Effective remote work in Kazakhstan depends on reliable internet access and appropriate communication tools. The Labor Code does not specify employer obligations regarding the provision of equipment.

  • Employer Considerations: Employers should focus on data security, provide necessary equipment or stipends, and consider developing a formal remote work policy to outline various operational and security aspects of remote work.

  • Employer Responsibilities: These include training employees, managing performance, and fostering a positive work culture to ensure productivity and engagement in remote settings.

  • Additional Considerations: Employers should be aware of potential challenges related to work-life balance and mental health in remote work scenarios.

  • Flexitime and Job Sharing: The Labor Code outlines standard working hours but allows some flexibility with employer approval. Job sharing isn't explicitly addressed but can be arranged through contracts.

  • Data Protection: Employers must protect employee data by implementing technical and organizational measures and being transparent about data usage. Employees have rights regarding their personal data and responsibilities to adhere to security protocols.

Overall, while Kazakhstan's legal framework for remote work is evolving, both employers and employees must navigate current regulations carefully, ensuring clear contracts and robust data protection measures are in place.

Working Hours in Kazakhstan

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  • Standard Workweek: In Kazakhstan, the standard workweek is capped at 40 hours, distributed over five days (Monday to Friday), with each day having a maximum of eight working hours.

  • Exceptions for Specific Groups:

    • Employees aged 14-16: Maximum of 24 hours per week.
    • Employees aged 16-18 and those in hazardous or physically demanding jobs: Maximum of 36 hours per week.
  • Overtime Regulations:

    • Overtime is defined as work beyond standard hours, limited to two hours daily, or one hour for strenuous jobs.
    • Overtime pay must be at least 1.5 times the regular rate, with potential for higher rates under specific contracts.
  • Exemptions from Overtime:

    • Pregnant women, employees under 18, and disabled employees (unless medically cleared) are exempt from mandatory overtime.
  • Rest Periods and Breaks:

    • Daily breaks of at least 30 minutes for shifts under eight hours, and one hour for longer shifts.
    • A minimum of 12 hours rest between workdays.
    • Two consecutive rest days per week, typically including Sunday.
  • Night and Weekend Work:

    • Night work (10 pm to 6 am) pays at least 1.5 times the regular rate.
    • Weekend work pays double the regular rate, with options for compensatory rest.
    • Written consent is required for scheduling weekend work, except in emergencies.
  • Record Keeping and Legal Compliance:

    • Employers must maintain accurate records of overtime and ensure compliance with compensation laws as per the Labour Code.

Salary in Kazakhstan

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Understanding competitive salaries in Kazakhstan is essential for attracting and retaining talent. Factors influencing salary competitiveness include job title, industry, experience, skills, education, location, and company size. The minimum wage is set annually and is a base salary excluding additional benefits. Employers must ensure wages meet or exceed this minimum and provide detailed payslips.

Statutory benefits mandated by law include paid time off, social security contributions, various types of leave, and overtime pay. Additionally, many companies offer discretionary bonuses and allowances such as performance-based bonuses, housing, transportation, and education allowances to enhance compensation packages.

Salaries are paid monthly, and while there's no requirement for a 13th-month bonus, some companies choose to offer it. Employers are responsible for withholding income tax and social contributions, ensuring compliance with Kazakhstan's labor regulations.

Termination in Kazakhstan

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In Kazakhstan, the Labour Code regulates notice periods for employment termination, which vary based on who initiates the termination and the reasons behind it.

Employer-Initiated Termination:

  • Employers must generally provide at least one month's written notice.
  • Exceptions include shorter notice periods if agreed upon, or no notice for specific contract-stipulated reasons.
  • For large-scale downsizing or company liquidation, employers must also notify the labor authority one month in advance.

Employee-Initiated Termination:

  • Employees can terminate their employment at any time with written notice, typically without a legally mandated notice period, unless specified otherwise in a contract or collective agreement.

Termination by Mutual Agreement:

  • No set notice period; terms are agreed upon by both parties.

Severance Pay:

  • One month's average salary for company liquidation or staff reduction.
  • Two months' average salary for redundancy due to economic difficulties.
  • One month's average salary if the employer breaches the contract.

Additional Considerations:

  • Collective bargaining agreements may provide greater severance benefits.
  • Individual contracts can specify terms, including severance pay and conditions for termination without notice.

It's crucial to consult specific employment contracts, collective agreements, and labor laws for precise information on termination procedures and entitlements.

Freelancing in Kazakhstan

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In Kazakhstan, the distinction between employees and independent contractors significantly impacts employment rights, social security contributions, and tax obligations. Employees operate under employer control with set schedules and tasks, while independent contractors maintain autonomy, setting their own schedules and methods. Misclassification of workers can lead to legal consequences and financial penalties for employers.

Independent contractors can choose from several contract structures, such as Civil Law Contracts or registering as Individual Entrepreneurs, each with specific legal and tax implications. Effective negotiation of contract terms, including payment and scope of work, is crucial, and understanding cultural business practices can enhance these negotiations.

Various industries in Kazakhstan, including IT, creative sectors, marketing, and legal services, utilize independent contractors. These contractors must manage their own tax and social security contributions, with options for additional insurance coverage for greater protection.

Intellectual property rights are particularly important for freelancers, who by default retain ownership of their creations under Kazakh law, unless otherwise transferred through a contract. Freelancers are advised to take measures to protect their IP and should consider consulting with legal professionals to navigate these aspects effectively.

Health & Safety in Kazakhstan

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Kazakhstan's health and safety regulations emphasize workplace safety, mandating employer and employee responsibilities and government enforcement. The Labor Code and other specific laws provide a framework for hazard prevention, employee rights, and employer obligations, including regular risk assessments and safety training. The Ministry of Healthcare and Social Development, through the Labor Inspectorate, oversees compliance, conducting inspections and imposing penalties for non-compliance. Challenges include enforcement in smaller enterprises and ensuring comprehensive understanding of safety regulations among all employees. Continuous updates to laws and standards, including international standards like ST RK ISO 45001-2018, aim to enhance workplace safety across various sectors.

Dispute Resolution in Kazakhstan

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Kazakhstan's labor dispute resolution system includes labor courts and arbitration panels. Labor courts handle individual and collective disputes related to employment, operating under civil procedure principles with adaptations for labor issues. Arbitration panels offer a voluntary alternative, with Conciliation Commissions and Labor Arbitration Courts providing industry-specific expertise.

The Labor Code and the Law "On Mediation" govern these mechanisms, emphasizing compliance through audits and inspections conducted by the State Labor Inspectorate and other authorized bodies. These inspections, which can be triggered by worker complaints or scheduled plans, aim to ensure adherence to labor laws and fair practices.

Non-compliance can lead to warnings, fines, or more severe penalties like operation suspension or criminal charges. Whistleblower protections are in place to safeguard individuals reporting violations, although practical challenges like fear of retaliation and lack of awareness persist.

Kazakhstan has ratified several ILO conventions influencing its labor laws, including those against forced labor, discrimination, and child labor. However, gaps in enforcement and restrictions on trade union activities suggest areas for improvement in aligning with international labor standards.

Cultural Considerations in Kazakhstan

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Understanding communication styles is crucial in Kazakh workplaces, which are shaped by nomadic traditions and Soviet influences. Hereโ€™s a breakdown of key aspects:

  • Directness with Nuance: While Kazakhs value straightforward communication, they often employ indirect methods for feedback to maintain harmony and avoid confrontation. Trust is essential, and being too direct without established rapport can be seen as rude.

  • Formality by Hierarchy: Communication style varies with hierarchy; formal in meetings and with superiors, and less formal with peers over time. Soviet legacies of formality and respect for authority persist.

  • Non-Verbal Communication: Non-verbal cues like eye contact, nodding, and maintaining personal space play a significant role in conveying respect and attentiveness.

  • Pragmatism and Long-Term Relationships: Kazakh negotiators focus on pragmatic, mutually beneficial solutions and value long-term relationships, reflecting the cultural emphasis on familial ties and group obligations.

  • Strategies for Success: Building personal relationships and understanding non-verbal cues are crucial. Patience and allowing for silence during negotiations are recommended.

  • Hierarchical Structures: Kazakh businesses typically have vertical hierarchies, with decision-making concentrated at the top. While this can expedite decisions, it may also limit creativity and employee engagement.

  • Leadership Styles: Leaders are expected to be paternalistic yet inspiring, guiding teams towards achieving their potential while maintaining clear authority.

  • Statutory and Regional Holidays: Understanding national and local holidays is important for business operations, as these can significantly affect work schedules and productivity.

Overall, success in Kazakh business environments requires an understanding of nuanced communication, respect for hierarchical structures, and cultural sensitivity towards local traditions and holidays.

Frequently Asked Questions for Employer of Record services in Kazakhstan

Who handles the filing and payment of employees' taxes and social insurance contributions when using an Employer of Record in Kazakhstan?

When using an Employer of Record (EOR) like Rivermate in Kazakhstan, the EOR handles the filing and payment of employees' taxes and social insurance contributions. This includes the calculation, withholding, and remittance of income taxes, as well as contributions to social insurance programs such as pension funds, social security, and health insurance. The EOR ensures compliance with local tax laws and regulations, thereby relieving the client company of the administrative burden and complexities associated with payroll and tax compliance in Kazakhstan. This allows the client company to focus on its core business activities while ensuring that all legal obligations related to employee compensation are met accurately and on time.

What is the timeline for setting up a company in Kazakhstan?

Setting up a company in Kazakhstan involves several steps and can take a varying amount of time depending on the efficiency of the processes and the preparedness of the applicant. Here is a detailed timeline for setting up a company in Kazakhstan:

  1. Name Reservation (1-2 days):

    • The first step is to reserve a unique company name. This can be done online through the Ministry of Justice's website or in person at the Public Service Center. The process typically takes 1-2 days.
  2. Preparation of Documents (2-5 days):

    • Prepare the necessary documents, including the charter (articles of association), the decision of the founder(s) to establish the company, and other required forms. This step can take between 2 to 5 days depending on the complexity and the number of founders.
  3. Notarization of Documents (1-2 days):

    • The prepared documents need to be notarized. This can be done at a local notary office and usually takes 1-2 days.
  4. State Registration (5-7 days):

    • Submit the notarized documents to the Public Service Center for state registration. The registration process typically takes 5-7 business days. Upon completion, you will receive a certificate of state registration and a business identification number (BIN).
  5. Tax Registration (1-2 days):

    • Register the company with the tax authorities to obtain a taxpayer identification number (TIN). This process usually takes 1-2 days and can often be done simultaneously with the state registration.
  6. Opening a Bank Account (1-3 days):

    • Open a corporate bank account in a local bank. This process can take between 1 to 3 days, depending on the bank's requirements and procedures.
  7. Social Security and Pension Fund Registration (1-2 days):

    • Register the company with the social security and pension fund authorities. This step typically takes 1-2 days and is necessary for compliance with local labor laws.
  8. Obtaining Necessary Licenses and Permits (Variable):

    • Depending on the nature of your business, you may need to obtain additional licenses or permits. The time required for this step can vary widely based on the specific industry and regulatory requirements.

In summary, the entire process of setting up a company in Kazakhstan can take approximately 2 to 4 weeks, assuming there are no significant delays or complications. However, this timeline can be extended if additional licenses or permits are required or if there are issues with document preparation or submission.

Using an Employer of Record (EOR) service like Rivermate can significantly streamline this process. An EOR can handle many of these steps on your behalf, ensuring compliance with local laws and regulations, and allowing you to focus on your core business activities. This can be particularly beneficial for companies looking to enter the Kazakh market quickly and efficiently.

What options are available for hiring a worker in Kazakhstan?

In Kazakhstan, employers have several options for hiring workers, each with its own set of legal, administrative, and financial implications. Here are the primary methods:

  1. Direct Employment:

    • Local Entity Establishment: This involves setting up a local subsidiary or branch office in Kazakhstan. This option requires navigating the local business registration process, understanding tax obligations, and complying with Kazakhstani labor laws. It provides full control over the hiring process and employee management but can be time-consuming and costly.
    • Compliance with Local Labor Laws: Employers must adhere to Kazakhstan's labor code, which includes regulations on employment contracts, working hours, minimum wage, social security contributions, and employee benefits.
  2. Independent Contractors:

    • Freelancers and Consultants: Hiring independent contractors can be a flexible and cost-effective option. However, it is crucial to ensure that the relationship is genuinely that of an independent contractor and not an employee to avoid misclassification risks. Misclassification can lead to legal and financial penalties.
    • Contractual Agreements: Clear, well-drafted contracts are essential to define the scope of work, payment terms, and other conditions to avoid disputes and ensure compliance with local laws.
  3. Employer of Record (EOR) Services:

    • Using an EOR like Rivermate: An EOR can simplify the process of hiring employees in Kazakhstan by acting as the legal employer on behalf of the client company. This allows businesses to hire local talent without establishing a legal entity in Kazakhstan.
    • Compliance and Administration: The EOR handles all aspects of employment, including payroll, tax withholding, social security contributions, benefits administration, and compliance with local labor laws. This reduces the administrative burden and ensures compliance with local regulations.
    • Risk Mitigation: By using an EOR, companies can mitigate risks associated with employment law compliance, such as wrongful termination claims, misclassification issues, and other legal disputes.
  4. Staffing Agencies:

    • Temporary and Contract Staffing: Staffing agencies can provide temporary or contract workers for short-term projects or to meet seasonal demand. This can be a flexible solution for businesses needing to scale their workforce quickly.
    • Agency Compliance: The staffing agency is responsible for ensuring compliance with local labor laws, including payroll, taxes, and benefits. However, the client company should still perform due diligence to ensure the agency's compliance practices are robust.
  5. Outsourcing:

    • Business Process Outsourcing (BPO): Companies can outsource specific business functions, such as customer service, IT support, or accounting, to third-party providers in Kazakhstan. This can be a cost-effective way to access specialized skills and services.
    • Service Level Agreements (SLAs): Clear SLAs should be established to define the scope of services, performance metrics, and other terms to ensure the outsourcing arrangement meets business needs.

Each of these options has its advantages and considerations. For companies looking to expand into Kazakhstan without the complexities of establishing a local entity, using an Employer of Record like Rivermate can be an efficient and compliant solution. It allows businesses to focus on their core operations while the EOR manages the intricacies of local employment laws and administrative tasks.

Is it possible to hire independent contractors in Kazakhstan?

Yes, it is possible to hire independent contractors in Kazakhstan. However, there are several important considerations and legal nuances to keep in mind:

  1. Legal Framework: Independent contractors in Kazakhstan are governed by the Civil Code rather than the Labor Code. This means that the relationship is based on a civil contract (service agreement) rather than an employment contract. The terms and conditions of the engagement, including payment, scope of work, and duration, are outlined in this civil contract.

  2. Taxation: Independent contractors are responsible for their own tax filings and social contributions. They must register with the tax authorities and pay individual income tax, which is typically 10% of their income. Additionally, they may be required to make social security contributions.

  3. Employment Misclassification: One of the risks of hiring independent contractors is the potential for misclassification. If the relationship between the company and the contractor resembles that of an employer-employee relationship (e.g., fixed working hours, direct supervision, provision of tools and equipment), the authorities may reclassify the contractor as an employee. This can lead to penalties, back taxes, and social contributions.

  4. Benefits and Protections: Unlike employees, independent contractors are not entitled to benefits such as paid leave, health insurance, or severance pay. They also do not have the same protections under labor laws, such as protection against unfair dismissal.

  5. Compliance and Documentation: It is crucial to have a well-drafted service agreement that clearly defines the nature of the relationship, the scope of work, payment terms, and other relevant conditions. Proper documentation helps mitigate the risk of reclassification and ensures compliance with local laws.

  6. Employer of Record (EOR) Services: To navigate the complexities of hiring in Kazakhstan, many companies opt to use an Employer of Record (EOR) service like Rivermate. An EOR can handle all aspects of employment, including payroll, tax compliance, and benefits administration, ensuring that the company remains compliant with local laws. This can be particularly beneficial for companies that do not have a legal entity in Kazakhstan or are unfamiliar with local regulations.

In summary, while it is possible to hire independent contractors in Kazakhstan, it is essential to understand the legal and tax implications and ensure proper documentation to avoid potential issues. Using an EOR service can simplify the process and provide peace of mind by ensuring compliance with local laws.

What are the costs associated with employing someone in Kazakhstan?

Employing someone in Kazakhstan involves several costs that employers need to consider. These costs can be broadly categorized into direct compensation, statutory contributions, and administrative expenses. Here is a detailed breakdown:

  1. Direct Compensation:

    • Gross Salary: This is the primary cost and includes the agreed-upon salary between the employer and the employee. Salaries in Kazakhstan can vary widely depending on the industry, role, and experience level.
    • Bonuses and Incentives: Depending on the employment contract and company policy, employers may also need to budget for performance bonuses, annual bonuses, and other incentive payments.
  2. Statutory Contributions:

    • Social Tax: Employers in Kazakhstan are required to pay a social tax, which is calculated at a rate of 9.5% of the employee's gross salary.
    • Pension Contributions: Employers must contribute 10% of the employee's gross salary to the Unified Accumulative Pension Fund.
    • Social Insurance: Employers are also required to contribute to social insurance, which covers various social benefits. The rate is 3.5% of the employee's gross salary.
    • Mandatory Health Insurance: Employers must contribute to the mandatory health insurance system, which is 2% of the employee's gross salary.
  3. Administrative Expenses:

    • Recruitment Costs: These include expenses related to advertising job openings, conducting interviews, and possibly using recruitment agencies.
    • Onboarding and Training: Costs associated with onboarding new employees, including training programs, orientation sessions, and any necessary certifications.
    • HR Management: Ongoing HR management costs, including payroll processing, compliance management, and employee relations.
    • Legal and Compliance Costs: Ensuring compliance with local labor laws and regulations may require legal consultations and regular audits.
  4. Other Benefits and Allowances:

    • Health and Safety: Employers may need to provide additional health and safety measures, especially in industries with higher risks.
    • Transportation and Housing Allowances: Depending on the location and industry, employers might offer transportation or housing allowances to attract talent.
    • Meal Allowances: Some employers provide meal allowances or subsidized meals as part of the employment package.

Using an Employer of Record (EOR) like Rivermate can help manage these costs more efficiently. An EOR handles all aspects of employment, including payroll, tax compliance, and benefits administration, ensuring that all statutory contributions and legal requirements are met. This can significantly reduce the administrative burden and potential risks associated with employing staff directly in Kazakhstan.

Do employees receive all their rights and benefits when employed through an Employer of Record in Kazakhstan?

Yes, employees in Kazakhstan can receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. An EOR ensures compliance with local labor laws and regulations, which is crucial for protecting employee rights and benefits. Here are some key points to consider:

  1. Compliance with Labor Laws: An EOR in Kazakhstan ensures that employment contracts, payroll, and benefits administration comply with the country's labor laws. This includes adhering to regulations regarding working hours, overtime, minimum wage, and termination procedures.

  2. Social Security and Taxes: The EOR is responsible for managing social security contributions and tax withholdings. In Kazakhstan, this includes contributions to the State Social Insurance Fund, the Pension Fund, and mandatory health insurance. The EOR ensures that these contributions are made accurately and on time, safeguarding employees' social security rights.

  3. Employee Benefits: Employees are entitled to statutory benefits such as paid annual leave, sick leave, and maternity/paternity leave. An EOR like Rivermate ensures that these benefits are provided in accordance with Kazakhstani law. Additionally, the EOR can offer supplementary benefits such as private health insurance or additional leave, depending on the employer's policies.

  4. Work Permits and Visas: For foreign employees, an EOR handles the complexities of obtaining work permits and visas, ensuring that all legal requirements are met. This is particularly important in Kazakhstan, where immigration laws can be stringent.

  5. Local Expertise: An EOR has in-depth knowledge of local employment practices and cultural nuances. This expertise helps in creating a positive work environment and addressing any issues that may arise, ensuring that employees feel supported and valued.

  6. Risk Mitigation: By using an EOR, companies mitigate the risks associated with non-compliance, such as fines or legal disputes. This protection extends to employees, who can be confident that their employment is legally sound and their rights are protected.

In summary, an Employer of Record like Rivermate ensures that employees in Kazakhstan receive all their rights and benefits by maintaining strict compliance with local labor laws, managing social security and tax obligations, providing statutory and supplementary benefits, handling work permits and visas, leveraging local expertise, and mitigating legal risks.

How does Rivermate, as an Employer of Record in Kazakhstan, ensure HR compliance?

Rivermate, as an Employer of Record (EOR) in Kazakhstan, ensures HR compliance through several key mechanisms:

  1. Local Expertise and Knowledge: Rivermate employs local HR professionals who are well-versed in Kazakhstan's labor laws, regulations, and cultural nuances. This local expertise ensures that all employment practices are compliant with national legislation, including hiring, contracts, benefits, and terminations.

  2. Employment Contracts: Rivermate prepares and manages employment contracts that comply with Kazakhstan's legal requirements. This includes ensuring that contracts are written in the local language, contain all mandatory clauses, and adhere to the standards set by Kazakh labor laws.

  3. Payroll Management: Rivermate handles payroll processing in accordance with Kazakhstan's tax laws and social security regulations. This includes accurate calculation of wages, tax withholdings, and contributions to social insurance funds, ensuring timely and correct payments to employees and government authorities.

  4. Tax Compliance: Rivermate ensures that all tax obligations are met, including income tax, social security contributions, and any other mandatory deductions. They stay updated on any changes in tax legislation to ensure ongoing compliance.

  5. Employee Benefits Administration: Rivermate manages statutory benefits such as health insurance, pension contributions, and other mandatory employee benefits. They also offer additional benefits that align with local market practices, ensuring competitive and compliant compensation packages.

  6. Labor Law Adherence: Rivermate ensures compliance with Kazakhstan's labor laws, including working hours, overtime regulations, leave entitlements, and occupational health and safety standards. They monitor and implement any changes in labor legislation to maintain compliance.

  7. Termination and Severance: Rivermate manages the termination process in accordance with Kazakh labor laws, ensuring that all legal requirements are met, including notice periods, severance pay, and proper documentation. This minimizes the risk of legal disputes and ensures fair treatment of employees.

  8. Data Protection and Privacy: Rivermate adheres to Kazakhstan's data protection laws, ensuring that employee data is handled securely and confidentially. They implement robust data protection measures to safeguard personal information and comply with local privacy regulations.

  9. Regular Audits and Reporting: Rivermate conducts regular audits and provides detailed reporting to ensure ongoing compliance with all HR and employment regulations. This proactive approach helps identify and address any potential compliance issues before they become problematic.

By leveraging these mechanisms, Rivermate ensures that companies operating in Kazakhstan can focus on their core business activities while maintaining full compliance with local HR and employment laws.

What legal responsibilities does a company have when using an Employer of Record service like Rivermate in Kazakhstan?

When a company uses an Employer of Record (EOR) service like Rivermate in Kazakhstan, the EOR assumes many of the legal responsibilities associated with employment. Here are the key legal responsibilities that the EOR handles:

  1. Employment Contracts: The EOR is responsible for drafting and maintaining compliant employment contracts in accordance with Kazakh labor laws. This includes ensuring that contracts include all necessary terms and conditions, such as job description, salary, working hours, and termination clauses.

  2. Payroll Management: The EOR manages payroll processing, ensuring that employees are paid accurately and on time. This includes calculating wages, withholding taxes, and making necessary deductions for social security and other contributions.

  3. Tax Compliance: The EOR ensures compliance with Kazakh tax laws by withholding the appropriate amount of income tax from employees' salaries and remitting these taxes to the relevant authorities. They also handle the filing of necessary tax returns and reports.

  4. Social Security Contributions: The EOR is responsible for making contributions to Kazakhstan's social security system on behalf of both the employer and the employee. This includes contributions to pension funds, health insurance, and other mandatory social security programs.

  5. Labor Law Compliance: The EOR ensures that all employment practices comply with Kazakh labor laws, including regulations on working hours, overtime, rest periods, and leave entitlements. They also ensure compliance with laws related to workplace safety and anti-discrimination.

  6. Employee Benefits: The EOR manages employee benefits as required by Kazakh law, such as paid leave, maternity/paternity leave, and any other statutory benefits. They may also administer additional benefits provided by the employer, such as health insurance or retirement plans.

  7. Termination and Severance: The EOR handles the legal aspects of employee termination, ensuring that terminations are conducted in compliance with Kazakh labor laws. This includes providing the appropriate notice period, calculating severance pay, and managing any disputes that may arise.

  8. Record Keeping: The EOR maintains accurate and up-to-date employment records as required by Kazakh law. This includes records of employment contracts, payroll, tax filings, and any other relevant documentation.

  9. Legal Representation: In the event of a labor dispute or legal issue, the EOR may represent the employer in dealings with Kazakh labor authorities or in court. They ensure that the employer's interests are protected and that any legal proceedings are handled in compliance with local laws.

By using an EOR service like Rivermate in Kazakhstan, companies can significantly reduce their administrative burden and ensure full compliance with local employment laws. This allows them to focus on their core business activities while mitigating the risks associated with international employment.

What is HR compliance in Kazakhstan, and why is it important?

HR compliance in Kazakhstan refers to the adherence to the country's labor laws, regulations, and standards that govern employment practices. This includes compliance with the Labor Code of Kazakhstan, which outlines the rights and obligations of employers and employees, as well as other relevant legislation such as tax laws, social security regulations, and occupational health and safety standards.

Key aspects of HR compliance in Kazakhstan include:

  1. Employment Contracts: Employers must provide written employment contracts that specify the terms and conditions of employment, including job duties, working hours, salary, and other benefits. These contracts must comply with the Labor Code and other relevant laws.

  2. Working Hours and Overtime: The standard working week in Kazakhstan is 40 hours. Any work beyond this must be compensated as overtime, with specific rates and conditions outlined in the Labor Code.

  3. Minimum Wage: Employers must adhere to the national minimum wage, which is periodically adjusted by the government. This ensures that employees receive fair compensation for their work.

  4. Leave Entitlements: Employees are entitled to various types of leave, including annual paid leave, sick leave, maternity and paternity leave, and other statutory leave. Employers must ensure that these entitlements are granted in accordance with the law.

  5. Health and Safety: Employers are required to provide a safe working environment and comply with occupational health and safety regulations. This includes conducting regular risk assessments, providing necessary safety equipment, and ensuring that employees are trained in safety procedures.

  6. Social Security Contributions: Employers must make contributions to the state social security system on behalf of their employees. This includes contributions for pensions, health insurance, and other social benefits.

  7. Termination and Severance: The Labor Code outlines the procedures for terminating employment, including notice periods, valid reasons for termination, and severance pay. Employers must follow these procedures to avoid legal disputes.

Importance of HR Compliance in Kazakhstan:

  1. Legal Protection: Compliance with HR laws protects employers from legal disputes and potential penalties. Non-compliance can result in fines, legal action, and damage to the company's reputation.

  2. Employee Rights: Ensuring compliance helps protect the rights of employees, fostering a fair and equitable work environment. This can lead to higher employee satisfaction and retention.

  3. Business Reputation: Companies that adhere to HR compliance standards are viewed more favorably by employees, customers, and business partners. This can enhance the company's reputation and competitiveness in the market.

  4. Operational Efficiency: Proper HR compliance ensures that employment practices are standardized and transparent, leading to more efficient and effective HR management.

  5. Risk Management: By adhering to HR compliance, companies can mitigate risks associated with labor disputes, workplace accidents, and other employment-related issues.

Using an Employer of Record (EOR) like Rivermate can significantly simplify HR compliance in Kazakhstan. An EOR takes on the responsibility of ensuring that all employment practices comply with local laws and regulations. This includes managing payroll, tax filings, social security contributions, and other administrative tasks. By partnering with an EOR, companies can focus on their core business activities while ensuring that they remain compliant with Kazakhstan's HR laws.

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