Uzbekistan: A Guideline to Payroll and Employer of Record

Run your business seamlessly with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Uzbekistan.

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Overview

Situated in the heart of Central Asia, Uzbekistan strategically occupies the space between the Syr Darya and Amu Darya rivers. Within this dynamic geographical context, the nation's economy is anchored by the pillars of cotton production, textiles, mining, and extraction of natural resources.

This orchestrated interplay of agricultural productivity and substantial gold and natural gas reserves fuels the nation's upward trajectory. Organizations looking to hire local talent in Uzbekistan don't always need a physical entity or a local provider to manage their payroll.

Neeyamo assists with onboarding and managing employees in Uzbekistan and processing a firm's payroll, compliance, benefits, and more.

 

Tools And Instances

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Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

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Global Work

A tech-based EOR solution to manage your extended workforce

Facts And Stats

Capital

Tashkent

Currency

Uzbekistani So'm (UZS)

Official Language

Uzbek

Fiscal Year

1 January - 31 December

Date Format

DD/MM/YYYY

Country Calling Code

+998

Time Zone

UTC + 05:00 Uzbekistani time (UZT)

Global Payroll

Overview

Handling payroll for a wide spread workforce can pose as a major challenge for any firm. The added complication of compliances can make things worse and drastically effect the time and efforts that can be used in other equally important aspects of an organization's development.  

Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform, Neeyamo Payroll.

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the welfare of the general population.

Employee Taxes

Social Security – With effect from 1 January 2019, Social Security contributions for individuals were abolished.

Employee Income Tax is capped at a 12.00% Flat Rate.

Employer Taxes

Employers have to contribute 12% towards Social Security.

Payroll Cycle

Overview

Undoubtedly, payroll is a critical process for any organization. The pay cycle in Uzbekistan refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

Frequency

Frequency cycle is Monthly.

13th Month Cycle

Thirteenth-month payments are not mandatory. Employers can pay bonuses at their discretion.

Global Work

Overview

An Employer of Record service provider helps you get rid of the hassle of handling the complexities that come with setting up a new employee in remote locations. They act as legal employers, facilitate salary payments, and handle everything from health insurance. payroll taxes, and employee benefits to comply with local tax laws and regulations.

This ensures that the client company can focus on the employee’s everyday tasks safely in the knowledge that they have a cost-effective solution as they continue their global expansion.

HR Mandates and Practices

Minimum Wage  

The current minimum wage in Uzbekistan is UZS980,000.00 per month in 2023.

The Official Gazette has published an increase in the guaranteed minimum monthly salary effective from January 1, 2024.

  • The guaranteed minimum monthly salary increases to €820.00 from €760.
  • This increase applies to all workers, including part-time workers.
  • The minimum salary in the autonomous regions of Madeira and the Azores may be subject to different regulations.

Overtime

Overtime work must not exceed 4 hours within two consecutive days and cumulatively 120 hours a year.

The rate is stipulated in the employment contract/collective agreements etc. This rate is commonly 200% of the employee’s regular rate of pay.

Hiring and Onboarding Requirements

Hiring

Companies can benefit from creating a clear employment contract when they hire Uzbekistan employees. Fixed-term contracts are permitted under limited circumstances, with a maximum term limit of three years as of April 30, 2023.

As of 2020, Uzbekistan has digitized labor relations, and all employment contracts are concluded electronically via the country’s Single National System of Work. A strong written contract in Uzbek will go further in protecting you from any misunderstandings or litigation. Try to include the most important employment terms, such as compensation, benefits, termination requirements, working hours, and related factors. If you include any salary or bonus amounts, make sure you use Uzbekistan Som instead of another foreign currency.

Onboarding

The following information is required while onboarding local residents:

  • Name.
  • Date of Birth
  • Nationality
  • Occupation
  • Position
  • Passport number
  • Address

The following information is required while onboarding foreigners:

  • Name.
  • Date of Birth
  • Nationality
  • Occupation
  • Phone number
  • Identity Card
  • Passport Number
  • Permanent Address

Probation

The term of the preliminary test may not exceed three months.

An employment contract may be concluded with a preliminary test (probation period) in order to:

  • Check the compliance of the employee with the assigned work;
  • For the employee to decide whether to continue the work specified in the employment contract.

Leave

Public Holidays

The following public holidays are observed in Uzbekistan:

  • Jan. 1: New Year's Day.
  • Jan 14: Day of Defenders of the Native Land.
  • Mar 8: International Women's Day
  • Mar 21: Navruz.
  • Apr 21: Eid Al-Fitr
  • May 9: Day of Memory and Honor
  • Jun 28: Eid Al-Adha.
  • Sept. 1: Independence Day.
  • Oct. 1: Teachers' Day.
  • Dec. 8: Constitution Day.

Annual Leave

Following the completion of 6 months of continuous employment, employees are entitled to a minimum of 15 days of paid vacation per year. The amount of paid leave that kids and workers with hazardous employment are entitled to may grow.

Sick Leave

The number of sick leaves per year is not limited. Only the number of paid sick days is limited. The employee can be sick for no more than 30 calendar days per year.

If the employee is sick for a long time, the sick leave can be extended only by a special medical commission. The extension period is another 30 calendar days.

Maternity Leave

Women are granted a maternity leave of 70 calendar days before childbirth and 56 calendar days (in case of complicated childbirth or when two or more children are born – 70 calendar days) after childbirth with the payment of state social insurance benefits.

At the end of maternity leave, at the request of a woman, she is granted leave to care for a child until the child reaches the age of two years with the payment of benefits for this period.

Paternity Leave

There is no statutory paternity leave.

Parental Leave

One of the parents (guardian, custodian) raising a child with a disability up to the age of 16 is provided with one additional day off per month with payment in the number of daily earnings at the expense of state social insurance.

Women who have two or more children under the age of 12 or a child with a disability under the age of 16 are granted an additional annual paid leave of at least three working days.

Adoption Leave

The employee who have adopted newborn children directly from the maternity hospital or who have established guardianship over them are granted leave for the period from the date of adoption (establishment of guardianship) and until the expiration of 56 calendar days from the date of the birth of a child with the payment of state social insurance benefits during this period.

Marriage Leave

Employees studying in higher and secondary specialized educational institutions are provided with additional leave with the preservation of the average wage for the period of participation in the laboratory examination session.

Termination

Notice Period

The notice period depends on the reason for termination:

  • Redundancy – 2 months’ notice 

  • Lack of qualification or health reason that impedes the employee’s ability to carry out their duties– 2 weeks’ notice 

  • Change in the company’s ownership – 2 months’ notice 

  • Gross misconduct or performance- 3 days’ notice 

  • Payment in lieu of notice is permissible.

Severance Pay

The amount of severance pay cannot be less than the average monthly wage, then under the new code, the amount of severance pay will depend on the length of service with the employer:

  • for employees with work experience of up to 3 years – from 50% of the average monthly salary

  • for employees with work experience from 3 to 5 years – from 75% of the average monthly salary

  • for employees with work experience from 5 to 10 years – from 100% of the average monthly salary

  • for employees with work experience from 10 to 15 years – from 150% of the average monthly salary

  • for employees with more than 15 years of experience – at least 200% of the average monthly salary

Visa

Overview

In general, to obtain a business visa to Uzbekistan, a visa applicant should submit the following documents to the relevant consular office of Uzbekistan:

  • Invitation letter from the hosting organization (for example, a business partner or an Uzbek company) that is duly processed through the Ministry of Foreign Affairs of Uzbekistan in Tashkent (this requirement does not apply to the nationals of those countries for which Uzbekistan has a simplified procedure for issuing visas)
  • Two copies of the completed and signed visa application form
  • Valid passport or document of a stateless person
  • Two passport-size pictures
  • Proof of visa fee payment unless a visa fee exemption has been established by an intergovernmental agreement between Uzbekistan and the respective foreign country, and/or Uzbekistan legislation

Last updated on August 7, 2023

If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com.

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