Azerbaijan EOR & PEO

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Hire in Azerbaijan

Azerbaijan is a developing country between Russia and Iran, known for its abundant oil and natural gas. The former Soviet state gained independence in 1991 and has earned the nickname “Land of Fire” for its natural gas-burning fire on a mountain in Absheron. Despite the pandemic affecting tourist activity in 2020, year-on-year international visitors have surged by 102%. Azerbaijan’s GDP is set to rise by 28%, reaching almost 9 billion euros, owing to its tourism sector alone. The average monthly wage in Azerbaijan totals AZN 925 (approximately $544), and many people work well into retirement. If you are ready to adopt a workforce in Azerbaijan, now is the right time to hire in the country.

Facts & Stats

hire employees in Azerbaijan

What Is a Azerbaijan EOR?

An Azerbaijan employer of record, or EOR, can help businesses establish and expand their workforce in the region. An EOR works with foreign companies that are unable to establish or register a business in a country where they would like to hire employees. The EOR in Azerbaijan represents your company, acts on your behalf as a legal entity, and can undertake various HR tasks, including onboarding, offboarding, and overseeing employee contracts. The purpose of an Azerbaijan EOR is to maintain compliance with the labor laws in the country so you can hire the best talent without the risk of fines or lawsuits.

It’s easy to get confused with the terms “EOR” and “PEO.” A PEO is known as a professional employer organization, and they don’t have the same legal capacity as an EOR. Sometimes, a PEO is suited to a business that is looking for an HR service to manage administrative tasks. While both a PEO and an EOR can administer benefits and manage payroll, the former cannot act independently and is not considered a legal entity. An EOR can take over tax requirements and adherence to employment regulations, helping to make important staff decisions.

Save Money And Time with A Azerbaijan EOR

What Are the Benefits of a Azerbaijan EOR?

Unless you speak the national languages of Azerbaijani, Russian, and Armenian and are familiar with the local labor laws, it’s better to hire an Azerbaijan EOR who will guide you every step of the way. An EOR in Azerbaijan aids international businesses that want to hire employees quickly without the cost or hassle of setting up a registered entity. The EOR is well-versed in the local languages, culture, and, most importantly, the employment rules and regulations. They can negotiate contract terms and conditions on your behalf, and they manage various HR operations within the confines of the law. Not only will your workforce be operational efficiently, but your company will save on the costs of hiring multiple services or registering their own business in the country.

Horizons is Best IN Class

Why Choose Horizons?

Horizons stands out as a Azerbaijan EOR through:

A strong regional presence in the Asia-Pacific region, meaning senior management are on the ground to deal with any issues.
Client-focused infrastructure. Horizons won’t oversell you on products and services you don’t need. Horizons offers the easiest platform to compliantly hire and pay people worldwide.
Cost-effective solutions. At $499 per employee, per month, no EOR in Azerbaijan is more affordable. The cost is 100% transparent (onboarding, offboarding, deposit, no extra charges).
A customer-first culture. Horizons is an efficient bootstrapped company. It is not an externally-funded company burning investor cash to aggressively acquire new clients. Horizons is the only EOR that grows with its customer, reflecting the level of care and personal attention provided to each customer. Horizons will carefully advise on the best setup in each country: the type of contract needed, how to structure your benefits, and how to offboard a person while minimizing the risk of conflicts and extra cost
A long-term partnership. Horizons is the only EOR platform with a recruitment arm — a direct response to client demand. If any employee is leaving, or if our clients want to explore a new country, Horizons can recruit new candidates directly for the client. Horizons is:
- The only EOR doing this in-house — no subcontracting
- The only EOR doing this without a retainer — clients are only charged upon success
- The only EOR charging just a 2% fee per month.

Step-by-step Azerbaijan EOR

How Does a Azerbaijan EOR Work?

An Azerbaijan EOR is responsible for keeping you compliant with the national labor laws. They help businesses hire employees, and they act on your behalf by securing employment contracts, negotiating benefits, and assisting with a confident and satisfied workforce. Discover the following services provided by a professional EOR in Azerbaijan:

Hire your employees: If you were to hire employees in Azerbaijan with little to no knowledge of the regulations and processes, it would be time-consuming and expensive. That’s because the employer company would have to learn local laws and comply with payroll and statutory employee benefits. An employer of record is based in the same country as employees and can communicate in the national language to assist in finding the best workers in Azerbaijan.
Manage employment contracts and onboarding: Azerbaijan operates according to the Labor Code of the Republic of Azerbaijan. An EOR in Azerbaijan will provide clarity on the types of employment contracts that are permitted. These include permanent, part-time, and temporary agreements presenting the terms and conditions of employment. These terms must coincide with the labor laws that an EOR can facilitate.

In addition to managing contracts, EOR professionals help companies with the process of onboarding. Experts will simplify onboarding in an unfamiliar labor market by effectively communicating between the new talent and the employer. They will create effective workflows and introduce the company culture to new employees to support their successful integration into the workforce.
Process payroll and handle employment taxes: The employment laws concerning taxation in Azerbaijan differ between residents and foreign nationals. Being mindful of and integrating payroll and employment tax regulations is mandatory in the country. An EOR will pay employees their wages on time, and they will ensure that the company pays taxes such as social security contributions and income tax. An income tax of 14% is generally paid on salaries below AZN 2500.
Administer benefits: Employees must receive mandatory benefits, such as paid leave and severance pay. Relying on the services of a professional EOR in Azerbaijan guarantees that employee benefits, including social security, overtime, and outstanding leave, are paid.
Take care of exit procedures: Whether an employee has engaged in gross misconduct or is no longer performing up to par, contracts can be terminated. However, before ending a contract, an experienced EOR will guide the client on the process. This includes issuing employees notice periods based on the length of time the employee has worked for the company. This involves severance pay and settling any outstanding leave to avoid disputes and non-compliance with labor laws.

stay compliant with Azerbaijan labor laws

Labor Laws

The Labor Code of the Republic of Azerbaijan was adopted by the Law of Azerbaijan Republic on February 1, 1999. It constitutes the regulations that businesses must abide by when hiring employees, drawing up contracts, and administering benefits. A closer look at local labor law can safeguard the company and its employees.

Employment contract types

Most employees in Azerbaijan sign a permanent contract or a standard employment agreement. Here, there is no end date to the agreement, but it requires consistent and clear communication concerning employee benefits, termination procedures, severance, and wages. The minimum wage in Azerbaijan is AZN 345 per month.

Another common type of contract is a fixed-term contract, in which staff work for a predetermined period. This can include temporary or contract workers.

All contracts must be presented in written form and signed by the employee. It is preferable to create an employment contract in the national language of Azerbaijani, although this is not a mandatory requirement. All new employees, whether on a permanent or fixed-term contract, must receive a probation period of 3 months.

Project-based

Fixed-term

Indefinite

Working hours in Azerbaijan

The standard workweek in Azerbaijan is 5 days at 8 hours per day. According to Art. 89 of the Labour Code of Azerbaijan, a work week must not exceed 40 hours. All workers must receive at least 2 days of rest per week. If employers require a 6-day workweek, they must keep track of the total number of hours worked, which cannot exceed 7 days.

Overtime must be compensated in the following way:

Holiday Schedule in Azerbaijan [2024]

Azerbaijan upholds the following international and traditional public holidays:

Date	Holiday name
1 Jan, 2024	New Year’s Day
2 Jan, 2024	New Year’s Holiday
8 Mar, 2024	Women’s Day
21 Mar to 26 Mar	Nowruz
9 May, 2024	Victory Day over Fascism
28 May, 2024	Independence Day
15 Jun, 2024	National Salvation Day of the Azerbaijani people
26 Jun, 2024	Day of Armed Forces of the Republic of Azerbaijan
18 Oct, 2024	Day of Restoration of Independence
8 Nov, 2024	Victory Day
9 Nov, 2024	National Flag Day of the Republic of Azerbaijan
12 Nov, 2024	Constitution Day
17 Nov, 2024	National Revival Day
31 Dec, 2024	World Azerbaijanis Solidarity Day

Paid time off

The amount of paid time off employees are eligible to receive is based on how long they have been employed at their current company:

Sick leave in Azerbaijan

Employees in Azerbaijan are entitled to 14 days of sick leave per year. For workers protected by state social insurance, they can extend their leave within reasonable limits provided a medical certificate is issued. If the employee cannot return to work after 4 months, their contract may be terminated unless they sustained an injury on duty or have taken maternity leave.

Less than 6 months of sick leave:

(percentage of regular wages owed to the employee)

Over 6 months of sick leave

In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.

Maternity leave in Azerbaijan

All pregnant women have the right to 126 days of maternity leave, fully paid by the State Social Protection Fund. They can take 70 days off before the arrival of their baby and the remaining 56 days thereafter.

Annual leave in Azerbaijan

Azerbaijani workers must receive at least 21 days of yearly leave, which is mandatory. For high-level positions, including management and specialists, annual leave is extended to 30 days in the country. However, employees do not receive the benefit of annual leave for their first year of working with the company.

Termination & severance in Azerbaijan

The termination of an employment contract in Azerbaijan must follow strict legal practices to protect the rights of workers. Employers who fail to adhere to these regulations can face hefty penalties, including fines.

If an employee’s position has become redundant, they must receive 3 months’ full pay upon terminating their contract.

Some of the most common reasons to end an employment contract include:

The expiry of a fixed-term contract
The employee has failed their probation
Both parties agree to end the contract
The employee has broken the terms of the employment contract

Employees generally receive a severance of two months’ salary if their contract is terminated due to medical reasons or changes in employment conditions. Workers must be paid their unused leave when a contract ends.

Azerbaijan's compulsory social security contributions

Social security contributions are primarily for the purpose of funding pensions, social insurance, and other social benefits. These contributions are mandatory and are used to fund the social security system, which provides benefits such as pensions, disability benefits, and various other social insurance benefits.

Azerbaijan social security for foreigners

Employers are required to make social security contributions for all employees, including foreign employees, at the same rates as for local employees.

Azerbaijan has social security agreements with some countries to avoid double payment of social security contributions. These agreements typically allow foreign workers to remain covered under their home country’s social security system while working in Azerbaijan, and vice versa.

Individual income tax

The individual income tax system in Azerbaijan is structured to ensure that both residents and non-residents contribute to the nation’s revenue based on their earnings.

For residents, they pay around 14% to 25% depending on their income. Non-residents are taxed at a flat rate of 14% on their Azerbaijan-sourced income.

Health insurance

Health insurance in Azerbaijan primarily revolves around the mandatory health insurance system, which aims to provide comprehensive healthcare coverage to all citizens and residents. Contributions are shared between employers and employees, ensuring that a wide range of medical services are accessible and affordable.

MHI covers a wide range of medical services, including primary care, specialized care, emergency services, surgeries, diagnostic services, and essential medicines.

In addition to mandatory health insurance, residents can opt for private health insurance plans. These plans offer additional services and benefits not covered by MHI, such as private hospital care, advanced treatments, and wider choice of healthcare providers.

hassle-free Azerbaijani compensation & benefits

Compensation & Benefits

Azerbaijan compensation laws

The Azerbaijan Labor Code has a payment cycle in which a monthly salary is paid in two parts: one as an advance and the second as the remaining salary. These payments must be made within 16 days of each other.

Annual salaries are paid monthly.

13 month salary in Azerbaijan

Azerbaijani employees are not entitled to a 13-month salary, but employers generally offer bonus pay as an incentive based on job roles.

Medical insurance is a statutory benefit as of January 2021.

Social security for Azerbaijani nationals

In Azerbaijan, social security contributions became mandatory as of January 2019. Employers contribute 2% of an income of AZN 200, or for amounts above AZN 200, a contribution of AZN 44 + 15% of the sum above AZN 200 is required.

Azerbaijan Employer Of Record Peo

Navigation

Hire in Azerbaijan

What Is a Azerbaijan EOR?

What Are the Benefits of a Azerbaijan EOR?

Why Choose Horizons?

How Does a Azerbaijan EOR Work?

Labor Laws

Employment contract types

Working hours in Azerbaijan

Compensation & Benefits

Frequently asked questions

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Frequently asked questions

How does an EOR in Azerbaijan manage compliance with local labor laws?

An EOR in Azerbaijan is knowledgeable about local labor laws, and they will closely follow these regulations when assisting businesses with various employment and HR processes. These include mandatory benefits, paying the minimum wage, administering payroll, and presenting a signed and sealed contract of employment. Because the Azerbaijan EOR is located in the country, they are recognized as a legal entity and are held responsible for compliance with the Labor Code of the Republic of Azerbaijan.

What are the advantages of using an EOR for hiring in Azerbaijan?

An EOR in Azerbaijan will streamline administrative HR tasks, hire employees faster, and guide you on labor laws. They will break down the language and cultural barriers that make it challenging to find the perfect match for the job role and corporate culture. For many international businesses interested in hiring in Azerbaijan, the prospect of registering a business and learning the labor laws makes it impractical and far too expensive. Using an EOR will connect you to talented employees with the skills and experience to match the position.

Azerbaijan EOR & PEO

Start hiring in Azerbaijan

Simple, compliant hiring with Horizons EOR & PEO

Hire in Azerbaijan

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hire employees in Azerbaijan

What Is a Azerbaijan EOR?

Save Money And Time with A Azerbaijan EOR

What Are the Benefits of a Azerbaijan EOR?

Horizons is Best IN Class

Why Choose Horizons?

Step-by-step Azerbaijan EOR

How Does a Azerbaijan EOR Work?

stay compliant with Azerbaijan labor laws

Labor Laws

Employment contract types

Project-based

Probationary period

Termination

Severance

Fixed-term

Probationary period

Termination notice period

Severance

Indefinite

Probationary period

Termination notice period

Severance

Working hours in Azerbaijan

Overtime must be compensated in the following way:

For a regular workday:

For a rest day:

For a statutory holiday:

Paid time off

Under 1 year of employment

1-10 years of employment

10-20 years of employment

20+ years of employment

Sick leave in Azerbaijan

Less than 6 months of sick leave:

Under 1 year of employment

1-10 years of employment

10-20 years of employment

20+ years of employment

Over 6 months of sick leave

Under 1 year of employment

1-3 years of employment

3+ years of employment

Maternity leave in Azerbaijan

Annual leave in Azerbaijan

Termination & severance in Azerbaijan

Azerbaijan's compulsory social security contributions

Azerbaijan social security for foreigners

Individual income tax

Health insurance

hassle-free Azerbaijani compensation & benefits

Compensation & Benefits

Azerbaijan compensation laws

13 month salary in Azerbaijan

Social security for Azerbaijani nationals

Hire in Azerbaijan in 24h without your own local entity.

Frequently asked questions

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