How will the employee's net salary change?

Will there be changes in the company's expenses?

According to Article 101.1 of the Tax Code, 14% of the salary up to 2500 AZN is subject to income tax, and 350AZN + 25% of the part exceeding 2500AZN is subject to income tax.

In addition to tax deductions from wages, there are also mandatory state social deductions. Social insurance deductions from wages were calculated according to Articles 14.3.1 and 14.3.2 of the Law on Social Insurance as follows:

However, there were certain exemptions in these calculations for a certain period. Thus, Article 101.1-1 of the Tax Code provides for the exemption of monthly income from hired work of individuals working for taxpayers not engaged in oil and gas activities and belonging to the non-state sector for a period of 7 years from January 1, 2019, and Article 14.4 of the Law on Social Insurance. There were exemptions from monthly income from hired work of insured persons working for insurers not engaged in oil and gas activities and belonging to the non-state sector for a period of 7 years from January 1, 2019. You can familiarize yourself with the calculation of wages for 2019-2025 by accessing the link www.growth.az  that we shared earlier.

From January 1, 2026 to January 1, 2027, 3 percent of monthly income up to 2,500 manat, 75 manat from monthly income from 2,500 to 8,000 manat + 10 percent of the amount from 2,500 to 8,000 manat, and 625 manat + 14 percent of the amount exceeding 8,000 manat if the monthly income exceeds 8,000 manat will be deducted from income tax.

Now let's explain both calculation forms in a comparative form with examples:

source: tax code, law on social insurance