Salary Calculator
Azerbaijan

The Native Teams payroll calculator for Azerbaijan helps employers estimate the total cost of hiring by factoring in mandatory contributions and taxes.

Simply enter the employee’s gross salary—the total earnings before deductions—and the calculator will apply income tax, social security contributions, and medical insurance according to Azerbaijan’s regulations.

After accounting for all required deductions, including pension contributions, health insurance, and personal income tax, the calculator provides a clear breakdown of both employer costs and the employee’s net salary, ensuring full transparency in payroll planning.

The total cost of employment in Azerbaijan includes employer and employee contributions, along with income tax deductions. 

The gross salary represents the total salary amount before any deductions. Employers must contribute 22% of the gross salary to social security, 2% for mandatory health insurance, and 0.5% for unemployment health insurance. For certain industries, an additional 10% contribution is applied towards social security.

Employees also have deductions from their gross salary, including 2% of their gross salary for mandatory health insurance, 0.5% for unemployment insurance, and 3% for social protection fund contributing to future pension and social benefits. 

Additionally, employees are subject to income tax, which follows a progressive tax system based on their earnings. Once all of these deductions are applied, the net salary represents the final amount employees receive in their bank accounts.

Employees in Azerbaijan must pay an income tax, which is deducted by their employer and submitted to the tax authorities. The income tax is calculated progressively, depending on the total amount of earnings:

-Income up to AZN 8,000: Tax rate of 0%.
-Income over AZN 8,000: Tax rate of 14%. 

While the tax rates above are applicable in most employment cases, certain sectors, such as oil, gas, and government sectors, apply different tax rates, as follows:

-Income up to AZN 2,500: Tax rate of 14%.
-Income over AZN 2,500: A base rate of AZN 350 + 25% tax rate on the excess.

*Please note that these rates can vary based on legislative changes.

Employers in Azerbaijan must provide mandatory benefits to their employees, ensuring they have the necessary social protection and financial security. These benefits cover contributions to social insurance, pensions, and medical coverage, which employers must submit to the relevant government authorities.

In addition to this, employed individuals in Azerbaijan are also entitled to paid annual leave, public holidays, sick leave in cases of illness and injury, maternity/paternity leave, and others. 

Finally, employers must also provide unemployment insurance coverage and severance pay in specific cases when ending the employment relationship. 

Many employers in Azerbaijan provide additional employee benefits to foster a positive work culture, enhance workers’ satisfaction, and attract new employees to their organisations. 

One of the most common benefits is private health insurance, which provides employees with extended healthcare coverage beyond the state healthcare system. Some employers also offer supplementary pension contributions and life insurance for enhanced financial security.

Besides health and financial benefits, employers in Azerbaijan offer transportation allowances, meal vouchers, performance-based bonuses, and other benefits that enhance overall well-being and job satisfaction. Some employers may also support their employees by covering the costs for training programmes, professional certifications, or even higher education relevant to their field. 

The gross and net salaries in the Azerbaijan payroll calculator represent different stages of an employee’s monthly earnings.

The gross salary is the total salary agreed upon between the employer and the employee before any deductions. This amount serves as the basis for calculating taxes and mandatory deductions, including income tax, social security, and unemployment insurance.

The net salary is the final amount the employee takes home after all deductions have been applied. It represents the actual amount received in their bank account after meeting all legal obligations.