Azerbaijan 2026: payroll, tax and MMC registration facts
Azerbaijan combines a verified AZN 400 monthly minimum wage with staged employment tax, medical-insurance and sector-specific payroll rules.
At a glance
| Fact | Published value |
|---|---|
| Reference rate | 1.7 AZN per 1 USD (Central Bank of the Republic of Azerbaijan — official exchange rates; effective 2026-09-23) |
| Monthly gross minimum wage | 400 AZN/month (Ministry of Labour and Social Protection — 2026 social indicators; effective 2026) |
| Monthly net minimum wage | not published — we could not confirm this at an official source on 2026 |
| Income tax | 3% up to AZN 2,500; AZN 75 + 10% over AZN 2,500 to AZN 8,000; AZN 625 + 14% over AZN 8,000 formula (State Tax Service — income-tax table; effective 2026-01-01) |
| Corporate tax | 20 % of taxable profit (State Tax Service — profit tax guide; effective 2026) |
| VAT standard rate | 18 % (State Tax Service — Tax Guide; effective 2026) |
| Dividend WHT, resident | 5 % withholding (State Tax Service — dividend tax rate; effective 2024) |
| Weekly hours | 40 hours/week (Labour Code — Article 89; effective 2026) |
| Overtime | 2 times daily official salary minimum (Labour Code — Article 165; effective 2026) |
| Annual leave | 21 calendar days minimum (Labour Code — Article 114; effective 2026) |
| Probation | 2 weeks for contracts up to 6 months; 3 months otherwise maximum probation (Labour Code — Article 51; effective 2026) |
| Notice | Redundancy: under 1 year 2 weeks; 1–5 years 4 weeks; 5–10 years 6 weeks; over 10 years 9 weeks calendar notice (Labour Code — Article 77; effective 2026) |
Currency note
No official/unofficial exchange-rate gap was found in the audited primary sources.
Payroll: what the employer and the employee pay
On top of gross pay, an employer in Azerbaijan pays Mandatory state social insurance at a banded rate, Unemployment insurance at 0.5%, Compulsory medical insurance at a banded rate. The employee's own deductions are Mandatory state social insurance at a banded rate, Unemployment insurance at 0.5%, Compulsory medical insurance at a banded rate, followed by a progressive income tax. Every rate, cap and source, plus the arithmetic on a real salary, is on the employer-cost page, where the calculator applies the same rules to any monthly gross you type.
Corporate tax, VAT and dividends
The State Tax Service record publishes 20% profit tax, 18% VAT and the AZN 200,000 VAT or simplified-tax threshold, while eligible simplified regimes and the verified 5% resident-individual dividend withholding rule remain status-specific.
Setting up a company
In Azerbaijan, the usual small-company form is the limited liability company (MMC); the state fee is 100 AZN; local-investment online service figure; registration takes 2 calendar/business days as stated by service. Not confirmed at the registry or in the law, and therefore not published here: min capital, foreign sole owner. The fees, the registry, the portal and the tax questions a new company meets first are on the company-registration page.
Working time, leave and notice
The verified baseline is a 40-hour week, at least double daily salary for the cited overtime case, 21 calendar days of leave, two weeks or three months of probation depending on contract length, and a two-to-nine-week redundancy notice schedule.
What changed in 2026
- Qualifying private non-oil/gas employment income moved to 3% / 10% / 14% staged income-tax bands from 2026-01-01.
- Compulsory medical insurance changed to 2% up to AZN 2,500 and 0.5% above for both employee and employer from 2026-01-01.
- The 2026 social-indicator table lists the minimum wage as AZN 400; no 2026 increase decree was found.
- The announced employment-income schedule sets the first band at 5% up to AZN 2,500 from 2027-01-01; no 2027 minimum-wage amount was announced.
Editor's note
From 2026, qualifying private non-oil/gas employment moved from the expiring seven-year exemption to 3%, 10% and 14% bands, while medical insurance uses 2% up to AZN 2,500 and 0.5% above; the AZN 400 wage remains the recorded baseline, and the announced 2027 schedule changes the first band without announcing a new wage amount.
The State Tax Service and labour sources verify the staged payroll bands, social and medical insurance rules, VAT and profit-tax figures, dividend material, working time, leave, overtime, probation and redundancy notice. The record does not verify a general 2026 zero-rate employment regime, an hourly wage or an end date for the reduced up-to-AZN 8,000 treatment.
Registration evidence must be read carefully because ASAN displays different local-online and foreign-investment fee contexts, while the opened primary material does not expressly confirm a sole foreign owner or director. Catering and special-zone tax details are secondary-only, so they are not presented as universal rules.
Sources used on this page
- Central Bank of the Republic of Azerbaijan — official exchange rates
- Ministry of Labour and Social Protection — 2026 social indicators
- State Tax Service — 2026 payroll rates
- State Tax Service — 2026 payroll deductions guide
- State Tax Service — profit tax guide
- State Tax Service — Tax Guide
- State Tax Service — FAQ
- State Tax Service — dividend tax rate
- ASAN — service fee table
- ASAN — foreign-investment commercial legal person registration
- ASAN — registration requirements
- Labour Code — Article 89
- Labour Code — Article 77