Azerbaijan: 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 Azerbaijan.

Contact Us


An eternal flame sounds improbable, right? Yanar Dag proves you wrong; the major tourist attraction in Azerbaijan is a natural gas fire in the Absheron district, 25 kilometers north of Baku. The flame blazes continuously on the hillside where it was accidentally set alight by a shepherd in the 1950’s. Yanar Dag has been declared a state-protected conservation area and is one of the many unique aspects of Azerbaijan alongside its dedicated and talented workforce. 

Do your organization's expansion plans require hiring employees in Azerbaijan? If you lack a physical entity in the country – a key requisite to hiring local talent, your solution is right here with Neeyamo – Payroll management systems. Global payroll companies, such as Neeyamo, assist organizations worldwide with onboarding and managing employees in Azerbaijan- providing payroll accounting and payroll software, managing local compliance requirements, benefits, and more.

Tools And Instances

SVG Icon
Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

SVG Icon
Global Work

A tech-based EOR solution to manage your extended workforce

Facts And Stats





Official Language


Fiscal Year

January 1 - December 31

Date Format


Country Calling Code


Other Languages

Lezgian, Talysh, Avar, Russian, Tat, Tsakhur, Khinalug

Time Zone

GMT +04:00

Global Payroll


What does Payroll mean? 

Payroll is the list of compensation to be paid to employees of a company or organization for a set period or date. Global payroll provider companies allow organizations to outsource their payroll, allowing employers to focus on other aspects of their business.

What is Global Payroll?

Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. The solution to this is using a global payroll outsourcing company such as Neeyamo.

What is a Payroll System?

A payroll system is software that is used to manage employee payments, inclusive of their wages, deductions, bonuses, etc. Global payroll processing is typically done with the assistance of an outsourced payroll provider.

Over the years, Neeyamo – payroll service providers have observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll. Neeyamo's global payroll solutions ease the process for companies looking to outsource their global payroll requirements and aid them in maneuvering the tricky payroll system in Azerbaijan. Neeyamo's payroll management software provides the perfect solution for all your global payroll needs – for employees working in primary geographies, the long-tail region, remote or internationally located.

How is payroll calculated?

Neeyamo acts as your personalized Payroll Calculator. Ensuring adherence to local regulatory requirements using multi-level controls. Providing timely and accurate payroll, courtesy of our experts worldwide and using 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 welfare of the general population.

Employee Taxes

Employee Payroll Contributions:

  • Social Security: 3.00% under 200 and 10% in excess of 200 AZN + 6 AZN
  • Unemployment: 0.5%
  • Mandatory Medical Insurance: 1% up to 8,000 AZN; 0.5% above AZN 8000 + 160 AZN
  • Total Employee Cost: 5.50%

Employer Taxes

Employee Payroll Contributions:

  • Social Security: 2.00% up to 200 AZN; 15% above 200 AZN + 44 AZN
  • Unemployment: 0.5%
  • Mandatory Medical Insurance: 1% up to 8,000 AZN; 0.5% above AZN 8000 + 160 AZN
  • Total Employee Cost: 22%

Payroll Cycle


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.

Payroll Cycle

In accordance with the Labor Code of Azerbaijan (LCA), monthly salaries should be divided into two parts (advance and remaining portions of the wage) and paid to employees twice a month with an interval not exceeding 16 days.

Annual salaries should be paid not less than once a month, which is now becoming the normal practice.

13th Month Cycle

There is no requirement for the 13th salary payment in Azerbaijan.

Global Work


What is Employer of Record?

An Employer of Record services / EOR services provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account, prior to making a job offer to an international hire.

An Employer of Record services / EOR services provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.

This allows organizations to focus on collaborating with the employee in Azerbaijan for operational tasks, with the knowledge that they have a cost-effective solution to support their global payroll management & HR requirements as they continue their global expansion.

Neeyamo, a global payroll provider, using its Cloud-based HR and Payroll software, strives to provide its customers with a seamless employee management experience and offers global payroll compliance as well as EOR services with our Global Payroll Technology Stack. Neeyamo provides both managed payroll services with an automated payroll system as well as EOR services under one umbrella.

HR Mandates and Practices

Minimum Wage

The national minimum wage for 2024 in Azerbaijan is  AZN 270.


Overtime shall be considered time beyond the established workday during which an employee consensually performs his duties based on an order (instructions, decision) from his employer. Every employee cannot be assigned to overtime work in a row for two working days more than 4 hours, and in workplaces with difficult and harmful working conditions – more than 2 hours.


Overtime shall be permitted only in the following cases:

  1. During the performance of work necessary for national defense or to prevent or immediately respond to a social or natural disaster or industrial accident;
  2. during the performance of work vital to the general public, such as the supply of water, gas, heat, light, sewage, transportation, and communications, to clean up accidents or solve unanticipated problems that interfere with their proper functioning;
  3. if it is necessary to complete a job that has already begun and cannot be completed within normal working hours due to unanticipated or accidental delays caused by technical conditions and if failure to complete the work may entail inevitable commodity damage or loss;
  4. during temporary work to repair and restore mechanisms or structures when their failure to function shall idle a large number of employees.
  5. In cases when a break at work is impossible due to the absence of a substituting employee.

Compensation for Overtime:

Wages for each hour of overtime work shall be paid to employees as follows:

  • If wages are based on time worked, the amount paid per hour shall not be less than twice the standard hourly wage.
  • If wages are paid on the basis of piecework performed by the employee, extra wages must be paid in an amount no less than the hourly wages of employees with the same pay scale

Additional payment for overtime work may be stipulated in employment contracts and collective agreements.

Overtime work may not be replaced by an additional day off. Labour Code: Sec 99-101, 165

Data Retention Policy

Personal data must be immediately deleted in the following cases:

  • the purposes of its collection and processing have been achieved, and the need for their retention has been eliminated;
  • termination of the state registration of information system; and
  • The reasons for collection and processing of personal data of special category are eliminated, if the data subject does not give consent for retention of such data in the information system or transfer of such data to the national archive.

Hiring and Onboarding Requirements


Employers must not discriminate against candidates based on their citizenship status, sex, race, language, age, religion, political views, trade union membership, economic and family circumstances, or any other factor unrelated to their professional qualifications and skills or job performance.

Women do have additional protections under Azerbaijan law.


The following information is required during onboarding:

  • Candidate Full Name
  • Address
  • Contact Number
  • Copy of Identification Card
  • Work Visa/ Permit
  • Educational Certificates


In Azerbaijan, the standard probation period is up to 3 months.

During this time, either the employee or employer can cancel the employment agreement with three days’ notice.


Public Holiday

National Holidays

There are 13 public holidays.

January 1 to 4: New Year's Day
January 20: Martyr's Day
March 8: Women's Day
March 20 to 24: Nowruz
April 21 to 24: Ramadan
May 9: Victory Day over Fascism
May 28: Republic Day
May 29: Day off for Republic Day
June 15: Day of National Salvation of the Azerbaijani People
June 26: Azerbaijan Armed Forces Day
June 28 and 29:Feast of the Sacrifice
November 8: Victory Day of the Republic of Azerbaijan
November 9:State Flag Day of Azerbaijan
December 25: Christmas Day
December 31: World Azerbaijanis Solidarity Day

Annual Leave

Employees shall be granted paid basic leave of at least 21 calendar days. An employee shall be eligible for a vacation after six months of employment following the signing of the employment contract with his employer. Leave is granted annually for the relevant working year. A work year begins on the day the employee is hired and ends on the same day of the following year. If an employee’s working year has not started at the time of his / her application for leave, the employee may be granted leave only after the beginning of the working year.

Employees working in seasonal jobs shall be granted basic leave, as a rule, at the end of the season for a period of not less than two calendar days for each working month. Public Holidays corresponding to the period of annual leave are not included in the calendar days of leave and are not paid.

Terms and procedure for granting additional leave for the length of service

Depending on the length of service:

  • in case of five to ten years of work experience – 2 calendar days;
  • in case of ten to fifteen years of work experience – 4 calendar days;
  • if the length of service is more than fifteen years – additional leave is granted for a period of 6 calendar days.

The period of additional leave for the length of service shall be determined on the basis of the period during which the employee actually worked in one enterprise by concluding an employment contract with the employer.

Additional Leave for Women with Children

Irrespective of the duration of the main and additional leave, women with two children under the age of 14 shall be granted additional leave for two calendar days, and women with three or more children at this age, as well as women with disabilities – for five calendar days.

Fathers raising children alone, as well as persons who have adopted children, are entitled to an additional leave of 2 calendar days. The right to additional leave established by this Article shall be retained even if one of the children has reached the age of 14 by the end of the relevant calendar year.

If an employee is simultaneously entitled to two or more additional leave provided for in Articles 115 (harmful work) and 116(increase in annual leave for the length of service) of this Code, one additional period of additional leave shall be combined with his main leave.

Holidays that are not considered working days during the period of leave are not included in the calendar days of leave and are not paid.

Division of Leave:

Leave may be granted in installments at the request of the employee and with the consent of the employer, provided that the duration of one of the divided parts of leave is not less than two calendar weeks. If a part of the leave is used, the rest of it is given until the end of the working year at the end of the calendar year, or at the request of the employee, combined with the leave of the next working year.

An employee recalled from leave with the employee’s consent shall, with the consent of the parties, be paid either from the date of commencement of work and shall be granted additional unpaid leave (compensation) in lieu of days worked or from the date of commencement of employment.

Vacation Pay

When calculating the average salary paid for the period of leave, all types of payments included in the definition of salary shall be taken, except for lump-sum payments not included in the current system of remuneration. The average salary paid for the period of leave shall be determined on the basis of the average salary of the 12 calendar months preceding the month in which the leave was granted, regardless of the year in which it was granted. The average monthly salary of an employee who has worked less than 12 calendar months and is on leave shall be calculated on the basis of the full calendar months in which he/she actually works. In order to determine the salary for vacation days, the amount of average monthly salary is found by dividing the total amount of salary for 12 calendar months before vacation by 12 and dividing the received amount by the average annual number of calendar days of the month – 30.4. the amount is determined. The amount of one day’s salary determined by this rule is multiplied by the number of calendar days of the leave period. The procedure for calculating the salary for the payment of leave shall also apply to the payment of compensation to the employee for unused leave. The average salary for the period of leave shall be paid to the employee no later than three days prior to the beginning of the leave. Labour Code: Sec 113-117, 139-141 Additional days are granted as annual leave for employees working in specific sectors. Labour Code: Sec 114,118-119.

Maternity Leave

Women working during pregnancy and the postpartum period shall be granted paid leave for a period of 126 calendar days (70 calendar days before delivery and 56 calendar days after delivery). If the birth is difficult, if two or more children are born, the maternity leave is granted for a period of 70 calendar days. Maternity benefits are paid in full by the Ministry of Labor and Social Protection. Labour Code: Sec 125.

Adoption Leave

Women who adopt or raise a child under the age of two months are entitled to 56 days of postpartum social leave, as well as additional paid leave provided for in annual leave for women with children ( Article 117) and social leave (Article 127). Labour Code: Sec 126.

Partially Paid Social Leave:

One of the parents directly caring for the child or another member of the family shall be entitled to a partially paid social leave in the amount established by the legislation for the care of the child until the child reaches the age of three. An employee caring for a child may exercise the right to partially paid social leave in full or in part on the basis of a written application. Labour Code: Sec 127.

Creative Leave:

Paid creative leave is granted for up to 2 calendar months to complete the dissertation for the degree of Doctor of Philosophy, and up to 3 calendar months for completing the dissertation for the degree of Doctor of Sciences.

Studying for a doctorate (adjunct) in addition to work ( including for admission to a doctorate (adjunct) ) shall be granted 30 calendar days of paid leave in each academic year.

Employees engaged in writing textbooks or teaching aids may be granted paid creative leave for up to 3 months by the decision of the relevant executive authority and on the basis of a certificate.

Salary paid during the creative leave is calculated on the basis of the monthly salary determined for the position (profession) of the employee. Labour Code: Sec 122.

Paid Study Leave:

Employees studying in addition to work are provided with the following paid study leave:

  • to participate in training sessions in the relevant academic season, to carry out laboratory work, to pass tests and examinations;
  • to take state exams;
  • to prepare and defend a diploma project (work).

During the period of paid educational leave, an employee shall be paid an average salary.

Duration of Leave:

30 calendar days in the first and second courses in each academic year, 40 calendar days in the remaining courses, and 20 calendar days in the first and second courses of secondary special education institutions for employees studying in correspondence departments of higher education institutions during their laboratory work, testing, and examination. On calendar day, other courses are given a leave of absence of 30 calendar days.

Employees studying in correspondence departments of higher and secondary special education institutions shall be granted leave for a period of 30 calendar days during the state examinations.

During the period of preparation and defense of the thesis, employees studying in correspondence departments of higher education institutions shall be granted a leave of up to 4 calendar months, and employees studying in correspondence departments of secondary special education institutions up to 2 calendar months.

Employees studying in vocational education institutions without leaving production shall be granted leave for a period of 30 calendar days in the academic year to prepare for and pass examinations.

Employees studying in correspondence groups of general education institutions shall be granted leave for a period of 20 calendar days to take their final exams.


In all cases, except for the salary for the period of leave, the average salary is found by dividing the average salary earned by the employee in the two calendar months prior to the total number of working days in those months by multiplying the number of working days with which the salary is withheld. For employees who have worked for less than 2 months, the average monthly salary is calculated as follows: the daily salary is determined by dividing the salary earned by the employee during the actual days worked, the amount received is multiplied by the number of working days. Labour Code: Sec 123-124.

Donor Leave:

Donors who donate blood or blood components free of charge each time are given an additional day off with an average salary. This day off may be added to the annual leave at the request of the donor or used at any time during the year. Labour Code Sec 103.

Unpaid Leave:

Unpaid leave is granted at the request of employees by mutual agreement of the parties or by the code.

Based on the mutual consent of the employee with the employer, as well as in cases provided for in collective agreements, including on the conditions specified in the employment contract, employees may provide unpaid leave, the duration of which is set at the discretion of the parties, but not more than six months. At the request of employees and with the consent of the employer, unpaid holidays in one working year are granted in the following cases and for terms:

  • On the basis of the conclusion of the medical consulting commission, one of the parents with a child with chronic disease, or another family member directly caring for the child – until the child reaches four years;
  • Husbands whose wives are on leave in connection with childbirth – 14calendar days:
  • Women or single parents, trustees, guardians, with a child under 16 years old – up to 14 calendar days;
  • Regardless of the group and reasons for disability for disabled persons, employees under 18 with disabilities- up to 1 calendar month;
  • To persons who took part in the war as part of an active army – up to 14 calendar days;
  • employees injured (wound, trauma, contusion) during the protection of territorial integrity and sovereignty Republic of Azerbaijan – up to 14 calendar days;
  • Parents raising children with AIDS or infected with the human immunodeficiency virus (HIV), as well as those with children under 18 with disabilities – up to 14 calendar days;
  • Employees studying in postgraduate and doctoral studies – up to 1 calendar month;
  • Employees admitted to the entrance exams for higher educational institutions – 14 calendar days,
  • Employees admitted to the entrance examinations in secondary specialized educational establishments – 7 calendar days;
  • Authors whose invention or rationalization proposal is being introduced for the first time outside the enterprise where it works -up to 14 calendar days;
  • One of the relatives caring for a sick family member on the conclusion of a healthcare institution, up to 14 calendar days;
  • Employees with children with health disabilities for up to 18 years – up to 14 calendar days
  • Employees for solving family, household, and other social questions – up to 7 calendar days.
  • Employees with harmful and difficult working conditions shall be granted additional leave in proportion to the time actually worked during the working year in the relevant production, profession, or position. The employee’s right to this additional leave arises when he/she has worked at those jobs for at least six consecutive months.


Notice Period

The notice period for an employee is set out in Section 20 of the Employees Act (Angestellten-Gesetz). All employees must give at least one month’s notice, regardless of their length of service. However, contractually, the notice period can be increased up to six months. The standard notice period that the employer must give to an employee is also dependent on the employee’s length of service:

  • 2 years of service or less – 6 weeks’ notice.
  • Between 2- and 5-years’ service, two months’ notice.
  • Between 4- and 15-years’ service, three months’ notice.
  • Between 15- and 25-years’ service – 4 months’ notice.
  • More than 25 years’ service – 5 months’ notice.

All employees must give at least one month’s notice, regardless of their length of service. The notice period can be increased to six months, subject to contractual agreement.

When terminating an employment agreement due to downsizing, two months’ notice is required. During this 2-month period, the employee can take one day of paid time off per week for the purpose of finding new employment.

Severance Pay

For employees who are terminated based on redundancy, a minimum of 3 month’s severance pay is required.

In general, Severance pay varies depending on the length the employee has been employed:

1 years service or less one month's salary

  • Between 1 and five years’ service, 1.4 the monthly salary.
  • Between 5 and ten years’ service, 1.7 the monthly salary.
  • More than ten years’ service 2X the monthly salary.

In addition to general severance pay, a termination payment of 2 months’ salary must be given if:

  • Terms of employment were changed
  • The employee is called for Military Service
  • The employee can no longer perform their duties due to a permanent disability.

In the event that the employee dies whilst still in employment, three-month salary allowance is given to their family members.



Migration Service of the Republic of Azerbaijan through their employers. The work permit only lasts up to one year at a time; therefore, an employee would have to be re-issued with this multiple times during their employment.

Within 15 days of arrival in the country, an application should be made via the electronic services of the official website of the State Migration Service of the Republic of Azerbaijan, e-government portal, and e-mail ( or in-person to the regional migration department, or “ASAN service” centers.

The following documentation would be required for this submission:

  1. A completed application form
  2. A copy of an employee’s passport (other border crossing documents, including the visa page and pages indicating the last entry to the country).

All visitors to Azerbaijan are recommended to obtain a visa prior to their arrival. Passports without visas are retained by the immigration authorities at the airport. Visitors then must apply to the Consular Department of the Ministry of Foreign Affairs during working hours to retrieve their passport with a visa.

Once the work permit is issued, it serves as the basis for obtaining a temporary residence permit. Temporary residence permits are initially issued for up to one year based on the submitted application and may subsequently be extended for no more than two years at a time.

The maximum timeframe for obtaining a temporary residence permit is 20 working days after submission of the complete application package.

Employee Background Checks

Legal and Background Checks

The following background checks are necessary in Azerbaijan:

  • Education degree verification
  • Criminal Record Search
  • Employment verification
  • ID check
  • Passport validation

Last updated on January 11, 2024.

If you have any queries or suggestions, reach out to us at

Heeft u vragen? Neem contact met ons op

Neem contact op met een van onze experts en neem een korte demo van onze diensten

Neem contact met ons op