Kazakhstan is the world’s largest landlocked nation, situated in the continent of Eurasia. A growing business, planning to expand internationally, would find it to be an excellent location, given its easy access to both European and Asian nations. But before start doing business in Kazakhstan, you must adhere to the nation’s tax laws, follow the country’s tax guidelines, and more. The following text explains the Kazakhstan payroll tax calculations.
Payroll tax calculation simulation for Kazakhstan
An example of payroll taxes calculation for a salary of 4,000 USD (1,760,000 Kazakh Tenge (KZT)) is presented in the following table. This example is relevant as of May 2024. The calculations are given for an employee who is a citizen of Kazakhstan working in the territory of Kazakhstan. A sample of payroll tax calculation in Kazakhstan in Excel file format can be downloaded from the following link.
The calculation of payroll taxes for tax non-residents and non-citizens of Kazakhstan (Expat) will differ from the presented rules.
Employee taxes
The total tax burden on an employee in Kazakhstan is 19-20%, depending on the amount of salary. Employees in Kazakhstan pay the following taxes:
| Personal Income Tax | 10% |
| Pension Fund contribution (PF) | 10% |
| Employee Medical Insurance Contribution (EMI) | 2% |
Kazakhstan uses a flat personal income tax rate, which does not change with income growth, unlike most Western countries, which use a progressive tax rate. When calculating individual income tax, gross wages are reduced by Pension Fund Contributions (PF) and Employee Medical Insurance contribution (EMI) and the so-called standard tax deduction (SD). The standard tax deduction is equal to 14 Monthly Calculation Indices. The Monthly calculation index (MCI) is a conditional value set by the Government of Kazakhstan for calculating taxes, allowances, fines, etc. In addition to the MCI indicator, the Minimum Wage indicator (MW) is involved in the formulas for calculating taxes. In 2024, the set values of indicators were:
- Monthly calculation index (MCI) – KZT 3,692 ($ 8.4);
- The Minimum Wage (MW) – KZT 85,000 ($ 193).
Pension Fund contributions (PF) and Employee Medical Insurance contributions (EMI) have an upper ceiling. Thus, the salary taken into account for calculating these contributions cannot exceed:
- For Pension Fund contributions (PF) – 50 Minimum Wages, which is KZT 4,250,000 ($9,660).
- For Employee Medical Insurance contributions (EMI) – 10 Minimal Wages (MW), which is KZT 850,000 ($ 1,932).
Accordingly, the maximum values of the contributions themselves are:
- For Pension Fund (PF) KZT 425,000 ($966);
- For Employee Medical insurance (EMI) KZT 17,000 ($39).
Employer taxes
The total tax burden on an employer in Kazakhstan is 11-13%, depending on salary amount. An employer should pay the following taxes for employee he hired in Kazakhstan:
| Social contributions (SC) | 3.5% |
| Employer Medical Insurance | 3% |
| Social tax | 9.5% |
| Employer Pension Fund contribution | 1.5% |
| Accident Insurance payments | 0,12%-2,96% |
For the following employer taxes the maximum salary amount which is taxed is set:
- For Social Contributions (SC) – 7 Minimum wages, which is 595,000 KZT;
- For Employer Medical Insurance – 10 Minimum wages, which is 850,000 KZT;
- For Employer Pension Fund – 50 Minimal Wages, which is 4,250,000 KZT.
Accordingly, the maximum amount of the taxes itself are:
- For Social Contributions (SC) – 20 825 KZT ($ 47);
- For Employer Medical Insurance – 25 500 KZT ($ 58);
- For Employer Pension Fund – 63 750 KZT ($ 145).
Employer Pension Fund contributions are paid for employees born after January 1, 1975. The rate of Employer Pension Fund contributions will increase and is set for the following years as follows:
- from January 1, 2024 – 1.5 percent;
- from January 1, 2025 – 2.5 percent;
- from January 1, 2026 – 3.5 percent;
- from January 1, 2027 – 4.5 percent;
- from January 1, 2028 – 5 percent.
When calculating social tax (ST) from gross wages the Employee Pension Fund contributions (PF) and Employee Medical Insurance (EMI) are deducted. The amount of Social tax (SC) itself is then reduced by the amount of Social Contributions (SC).
Payments for Accident Insurance are not part of the tax system; they are provided for by the Law on Compulsory Accident Insurance of Employees. Every employer is obliged to insure workers he employs in Kazakhstan by concluding an agreement with the insurance company, he has chosen. Insurance rates are established by the Law and vary depending on the level of risk of the company’s activities from 0.12% (for office workers) to 2.96% (for workers employed in hazardous industries). Since these costs are inherently associated with the process of employment in Kazakhstan, we include this payments here.
Engaging a Professional Employer Organization (PEO) to calculate payroll taxes
A crucial component of growing your company in Kazakhstan is employ the correct staff, provide them on time salary payment and benefits and comply with the local law. The task of accelerated study of tax legislation in an unfamiliar country allows for a great deal of room for error, which can carry severe penalties. Companies can choose to work with a professional employer organization (PEO) like Atlas Employment to protect themselves against this. Our Recruitment and Employment of Record services will help you to get rid of the need to hire employee, calculating payroll, paying salary and taxes, while insure fast building of your own team, paying benefits to employee, on time salary payment and 100% compliance with the local low.
Download an example of calculating payroll taxes in Kazakhstan in a table Excel file
At the link bellow you can download a simulation for payroll tax calculation in Kazakhstan in Excel format. All Excel formulas are preserved and works. You can input in the file the needed salary amount to get payroll tax calculation for your Kazakhstan Employee.
If you have any questions, please contact us by Tel./ WhatsApp: +7 707 727 7874, Tel. +44 204 577 3290 or email alexo@employment-atlas.com
