Afghanistan: 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 Afghanistan.

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Overview

Situated at the crossroads of ancient civilizations, Afghanistan has long been a meeting point for Persians, Greeks, Arabs, Turks and Mughals. That rich history of migration and exchange has produced a culturally diverse population and a workforce with deep local knowledge and practical skills.

Do your organization's expansion plans require hiring employees in Afghanistan? Do you lack a physical entity in the country – a key requisite to hire local talent? Neeyamo – one of the top Global payroll providers, assists organizations worldwide with onboarding and managing employees in Afghanistan - processing payroll, managing local compliance requirements, 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

Kabul 

Currency

Afghani Afghan (AFN)

Official Language

Dari and Pashto

Fiscal Year

21 March - 20 March

Date Format

DD/MM/YYYY

Country Calling Code

+93

Other Languages

Uzbeki, English, Turkmeni, Urdu, Pashai, Nuristani, Arabic and Balochi

Time Zone

GMT +04:30

Global Payroll

Overview

Handling payroll for a widespread workforce can pose a major challenge for any firm. The added complication of compliance can make things worse and drastically affect 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.

How is payroll calculated?

Neeyamo acts as a personalized payroll tax calculator for employers looking to outsource their payroll needs. Neeyamo ensures adherence to local regulatory requirements using multi-level controls, provides timely and accurate payroll courtesy of our experts worldwide, and uses a tech-based integrated smart helpdesk solution with seamless support experience manned by payroll experts - Neeyamo has all your payroll needs covered.

Payroll Taxes

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

Employee Taxes

  • Tax Residency
    • Residents are taxed on income from both Afghan and foreign sources.
    • Non-residents are taxed only on Afghan-source income.
  • Withholding Requirement
    • Employers must withhold tax from employee salaries if the monthly income exceeds AFN 5,000.
    • Tax is deducted and remitted to the Ministry of Finance by the 15th of the following month.
  • Monthly Income Tax Rates

Monthly Income (AFN)

Tax Rate

0 – 5,000

0%

5,001 – 12,500

2% of amount over 5,000

12,501 – 100,000

AFN 150 + 10% of amount over 12,500

Above 100,000

AFN 8,900 + 20% of amount over 100,000

 

Employer Taxes

  • Corporate Income Tax: Flat 20% on net taxable income of legal entities.
  • Tax Scope:
    • Resident entities – taxed on worldwide income.
    • Non-resident entities – taxed on Afghan-source income only.
  • Currency & Filing:
    • Taxes assessed and paid in AFN.
    • Corporate tax returns due within 3 months after the end of the tax year (1 Hamal – 29 Hoot).
  • Employer Obligations:
    • Must register with the Ministry of Finance and obtain a Tax Identification Number (TIN).
    • Required to withhold employee taxes, maintain payroll records, and ensure timely remittance.

Social Insurance / Social Security

Afghanistan currently does not operate a formal, nationwide social insurance programme that covers private sector employees on a contribution basis. While government (public-sector) employees had a pension-type scheme, private-sector workers do not generally enjoy mandatory social insurance coverage. Some end-of-service benefits may apply in the private sector under labour-law provisions, but this should not be construed as full social insurance.

Payroll Cycle

Overview

Undoubtedly, payroll is a critical aspect of any organization. The Pay cycle is a notable feature that provides a sense of accountability for an employee to be paid consistently for their work.

Frequency

Afghanistan's Payroll Frequency is Monthly.

13th  and 14th Month Cycle

  • There is no statutory requirement to pay a 13th-month or 14th-month salary in Afghanistan.
  • Any such payment is voluntary and typically depends on company policy, employment contract, or collective agreement.

Global Work

Overview

What is an Employer of Record?

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

This ensures that the client company can safely focus on the employees' everyday tasks, knowing it has a cost-effective solution as it continues its global expansion.

HR Mandates and Practices

Minimum Wage

  • There is no statutory minimum wage prescribed for the private sector under the Labour Law of Afghanistan.
  • The private sector may determine wages through employment contracts or collective agreements, subject to mutual consent between employer and employee.

Working Hours and Overtime

  • The standard workweek is Sunday through Thursday, totaling 40 hours per week on average.
  • Business hours generally run from 7:30 AM – 4:30 PM, though this may vary by organization.
  • The maximum overtime permitted is 4 hours per day, as per the Regulation for Employees Overtime Management (2011).
Overtime pay rates:
  • Ordinary working days: 25% higher than the regular hourly rate
  • Rest days / public holidays: 50% higher than the regular hourly rate

Data Retention Policy

  • Afghanistan currently has no general personal data protection law and no dedicated data protection authority.
  • The Constitution of Afghanistan guarantees the right to privacy and confidentiality of communications.
  • Employers handling personal or employment data are advised to maintain internal confidentiality policies consistent with constitutional privacy rights and international best practices.

Hiring and Onboarding Requirements

Hiring

Hiring Options
Establish a Local Entity:
  • Employers may register a company in Afghanistan, obtain a Tax Identification Number (TIN), and directly manage payroll, tax withholding, and compliance with the Labor Law.
Use an Employer of Record (EOR):
  • Companies without a local entity can engage a licensed EOR that serves as the legal employer, handling local contracts, payroll, and statutory obligations on behalf of the organization.
Hiring Preferences
  • Afghan labor law requires priority employment for Afghan nationals when qualified candidates are available.
  • Hiring foreign employees is permitted only when no qualified Afghan worker can fill the position.

Onboarding

New employees (both Afghan nationals and foreign nationals) should be asked to provide the following documentation as part of the on boarding process:
  • Personal Details (Full Name, Surname, DOB)
  • Valid passport (for foreign nationals) or national identity card (Tazkera / e-Tazkera) for Afghan nationals.
  • Proof of identity document (e.g., national identity card)
  • Proof of educational qualifications (degree certificates, diplomas) as required for the role.
  • For foreign nationals: Police Clearance Certificate (from their country of origin or last residence) and copy of any pre-existing work authorization.
  • Employment contract duly signed (in Pashto/Dari or as required) and other on boarding paperwork such as bank details, local address, tax information.

Probation

A probationary period is permitted under the Afghan labour law. It must not exceed three months. During probation, either the employer or employee may terminate the contract with shorter notice.

Leave

Public Holidays

The following public holidays are generally observed in Afghanistan (dates vary annually according to the Islamic lunar calendar and government announcements):

  • Liberation Day
  • Ramadan
  • Eid al-Fitr (and related Eid al-Fitr holidays)
  • Mujahideen Victory Day
  • Labor Day
  • Day of Arafat
  • Eid al-Adha (Eid al-Qurban) and related holidays
  • Ashura
  • Anniversary of Taliban Rule (Victory Day)
  • Independence Day (National Day)
  • Anniversary of the Withdrawal of Foreign Troops (Departure Day)
  • Martyrs and Ahmad Shah Masoud Day
  • The Prophet’s Birthday (Mawlid al-Nabi)
Payments over holidays:
  • If employees are required to work on an official public holiday due to the nature of work or business necessity, they are entitled to overtime compensation.
  • In such cases, employees must receive at least 50% additional pay (i.e., 150% of the normal hourly rate) for work performed on a public holiday.

Recreational (Annual) Leave

Employees are entitled to 20 days of paid annual leave each year after completing one year of service.

  • Employees under 18 years receive 25 days, while those engaged in hazardous or underground work receive 30 days annually.
  • Leave can be taken at once or in parts, based on mutual agreement between employer and employee. 
  • Unused annual leave must be paid out upon termination of employment.

Urgent (Casual) Leave

Employees are allowed up to 10 days of paid urgent leave each year for personal or family emergencies, such as marriage, childbirth, or the death of a close relative.

  • Up to 3 days can be taken without prior approval, provided the employer is informed.
  • For longer urgent leave (up to the 10-day limit), employer approval is required.
  • Unused urgent leave cannot be carried forward to the next year.

Sick Leave

Employees are entitled to 20 days of paid sick leave per year, including full wages and allowances.

  • Up to 5 days can be taken with written notice only.
  • If sickness lasts more than 5 consecutive days, a medical certificate is required from a recognized doctor or health center.
  • If illness continues beyond 20 days, additional paid sick leave may be granted upon submission of a valid medical certificate from a government or non-government health center.

Maternity Leave

  • Female employees are entitled to 90 days of paid maternity leave.
    • 30 days before delivery, and
    • 60 days after childbirth.
  • In the case of complicated delivery or multiple births (twins), an additional 15 days of leave is granted.
  • Maternity leave is paid in full, including salary and applicable allowances, upon submission of a valid medical certificate from a hospital or recognized health institution.
  • The employee must return to work within 5 days after the expiry of maternity leave unless additional leave is medically approved.

Pilgrimage (Hajj) Leave

Employees are entitled to 45 days of paid leave once during their entire employment to perform Hajj or another religious pilgrimage.

  • The employee must present an official confirmation from the Department of Hajj and Religious Affairs.
  • If additional days are required, they can be covered using other available leave types (e.g., annual leave).

Termination

Overview

Under the Afghanistan Labor Law, an employment contract may be terminated under the following circumstances:

  • Mutual agreement between employer and employee
  • Expiry of a fixed-term contract
  • Retirement of the employee
  • Death of the employee
  • Disability preventing the employee from performing work duties
  • Cessation of the employer’s operations for more than six months
  • Dissolution of the company or reduction in workforce (redundancy)
  • Final conviction of the employee resulting in at least two months’ imprisonment
  • Unsatisfactory performance during the probationary period
  • Refusal to return to work or reassignment
  • Disciplinary reasons consistent with the Labor Law

Note: Collective redundancies generally require prior approval from the Ministry of Labor, Social Affairs, Martyrs and Disabled (MoLSAMD).

Notice Period

  • Employers must provide at least 30 days’ prior notice before terminating an employment contract.
  • Termination upon expiry of a fixed-term contract does not require additional notice.
  • During the probationary period (maximum three months), either party may terminate the contract without notice.
  • Employees may resign without notice if:
    • The employer breaches the employment contract or violates the labor law, or
    • The employee suffers from an incurable illness preventing continued work.
  • Although not explicitly mandated in writing, written notice is recommended to avoid disputes.

Severance Pay

When termination occurs for eligible reasons—such as cessation of work, company dissolution, staff reduction, conviction, or refusal to work—the employer must pay severance compensation based on the employee’s total service period

Length of Service

Severance Entitlement

Less than 1 year

1 month’s salary 

1 to 5 years

2 months’ salary 

5 to 10 Years

4 months salary

More than 10 Years

6 months’ salary

  • Note: Severance pay is not required in cases of voluntary resignation, retirement, death, mutual agreement, or contract expiry.

Visa

General Requirements

  • All foreign nationals must obtain a visa from an Afghan Embassy or Consulate before entering the country.
  • Standard processing time: approximately 5–7 business days, depending on documentation and location. 
  • Passport must be valid for at least six months with blank visa pages.

Work Visa

  • Required for foreigners intending to work in Afghanistan.
  • Applicants must provide:
    • Completed visa application and valid passport
    • Letter of introduction/invitation from the employer or sponsoring organization
    • Work permit approved by the relevant Afghan labor authority
    • Educational or professional qualification documents
  • Applicants are generally required to be under 65 years of age.
  • Visa is usually issued for single entry, with renewal possible in Afghanistan through the Ministry of Labor and Social Affairs.

Employee Background Checks

Overview

  • There are no specific laws mandating or prohibiting employee background checks in Afghanistan.
  • Employers may legally conduct background verification as part of the recruitment process, with the candidate’s consent.
  • Certain sectors — particularly security, defense, finance, education, and international NGOs — may require additional screening or a police clearance certificate from the Ministry of Interior.
  • Afghanistan currently has no comprehensive data protection law, so employers should follow international best practices for handling personal data and consent.
Common Types of Checks Conducted
  • Identity Verification: Verification of the national identity card (Tazkira) or passport for Afghan nationals; passport and visa verification for expatriates.
  • Educational Background: Confirmation of academic qualifications and professional certifications.
  • Employment History: Verification of previous employment and references to confirm work experience.
  • Criminal Record / Police Clearance: May be required for sensitive or high-security roles; typically issued by the Ministry of Interior Affairs upon request.
  • Immigration / Work Authorization: For foreign nationals, verification of valid work permit and residence visa.

If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com.  Last updated on November 04, 2025.

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