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Employer of record and Payroll Services in Azerbaijan


Employer of Record (EOR) in Azerbaijan


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Introduction


Azerbaijan, straddling the crossroads of Europe and Asia, is fast becoming a go-to destination for businesses looking to make their mark in both regions. Thanks to our Caucasus Employer of Record services helps brands tap into this vibrant market. 


Many western companies utilize outstaffing and staff augmentation strategies in Azerbaijan to scale up their operations smartly and effectively. 


Leading IT staff augmentation agencies are zeroing in on Azerbaijan as a prime spot for unearthing top-notch talent, particularly in the tech arena. Businesses are harnessing these models for scaling and for startup MVP development, ensuring they've got the perfect team lined up for their specific project demands.



Employer of record meaning


An Employer of Record refers to the legal employment of your team by an EOR provider. In this setup, your team in Azerbaijan works for you, but officially, they're employed by the EOR. This arrangement is ideal for smoothly navigating the local employment landscape without hassle.



Hire employees remote in Azerbaijan


Hire employees remote in Azerbaijan


Eyeing Azerbaijan for your next remote team expansion? You're making a smart move! With Gegidze's Employer of Record (EOR) and payroll services, hiring employees in Azerbaijan remotely in 2024 isn't just doable; it's a total game-changer.


Venturing into Azerbaijan is like uncovering a hidden treasure. And guess what? It's easier than you may think, especially with an Employer of Record service by your side. Forget the headache of navigating local employment laws or tax regulations. Your focus can stay firmly on growing your business while the EOR takes care of the other details.


The trend of hiring remote developers and freelance professionals is gaining momentum in Azerbaijan. This surge is fueled by the increasing demand for flexible work setups and the growing pool of skilled remote workers. Businesses are jumping on this trend to form dedicated remote development teams, opening doors to a talent marketplace and cost optimization.



Employer of record agreement


In Azerbaijan's growing economy,  employee payment record management is crucial. 


  • Streamlining employment management - employer of record (EOR) simplifies the complexities of local employment laws and payroll regulations. This service ensures that all aspects of employee management, from hiring to payroll, are handled with precision and in compliance with Azerbaijani laws.

  • Strategic business focus - we can take care of all the administrative and legal responsibilities so you can focus on strategic growth and business operaitons.

  • Reliable employee management: we manage meticulous management of employee payment records. It ensures adherence to legal standards and contributes to a positive employee experience by guaranteeing accurate and timely payroll processing.



Overview of Azerbaijan


Hire employees in Azerbaijan


Azerbaijan is rapidly establishing itself as a crucial player in the global business arena. This Eurasian nation, known for its strategic geographical position, creates waves in the economic sector. Let’s delve into what makes Azerbaijan an attractive destination for businesses looking to expand globally.


Economic overview


Azerbaijan's economy is changing its game. It's stepping up from just oil and gas to include different areas. The government is making it easier for businesses from other countries to come in and set up shop. It is especially true in the tech world, which is booming thanks to tech-smart people and innovations.


But there's more than just tech. Tourism is also taking off. Azerbaijan has a lot of history and culture, and more people from the globe start to notice. 


Moreover, Azerbaijan's economy is worth about $216 billion. That's a whole 37% more than what people first thought. That's a big deal! Azerbaijan is making a name for itself and showing everyone what it can do.


Market size


Despite its modest geographical size, Azerbaijan's market is full of potential. Positioned at the crossroads of Europe and Asia, it offers businesses a gateway to diverse markets. With a population of over 10 million, Azerbaijan presents a promising consumer base and a skilled talent pool. This makes it an ideal market for businesses looking to introduce innovative products and services.


Hire, pay, and manage your talent in one click with Gegidze


At Gegidze.com, we offer a streamlined solution for your business needs. With our service, you can hire, pay, and manage your team effortlessly – all with a single click. It's designed to be straightforward and efficient, suited for the fast-paced business environment. 


And the best part? The best Employer of Record Services is available for just 199 € per person/month.



cta gegidze


A brief of the tech industries in Azerbaijan


Azerbaijan's technology sector is evolving, presenting new opportunities for businesses and professionals alike. This change is marked by an increase in demand for specialized skills and the growth of tech-focused initiatives.


Employment opportunities in the Tech sector


With the tech industry growth, there's an increasing demand for skilled professionals such as dedicated PHP programmers, WordPress developers, or React native developers. This demand creates opportunities for HR staffing services and top I staff augmentation agencies to connect talented individuals with emerging tech companies in Azerbaijan.


The rise of remote work


The trend towards remote work is evident in Azerbaijan's tech sector. Companies are increasingly looking to hire dedicated development teams that can work remotely. This shift aligns with global trends and offers flexibility for businesses and employees. It also opens doors for outsourcing and outstaffing models, as companies seek to optimize their workforce cost-effectively.



Staff augmentation in Azerbaijan



hiring from azerbaijan


The need for specialized skills in the tech industry has led to the rise of staff augmentation agencies. These agencies help businesses find the right talent for specific projects or roles. For companies in Azerbaijan, this means access to a wider pool of skilled professionals, enhancing their ability to innovate and compete in the global market.


Azerbaijan's dynamic industrial growth, competitive cost of living, and favorable employment laws, presents a compelling case for businesses looking to expand. Whether to hire a dedicated web designer or a team of PHP developers or establish an HR staffing service, Azerbaijan offers a unique blend of opportunities and affordability.



Cost of living in Azerbaijan


The cost of living in Azerbaijan is a critical factor for businesses and expatriates considering a move to the region. The average monthly expenses for a single person are around 500 AZN (approx. $294), excluding rent. This affordability is particularly attractive for companies looking to hire remote development teams or dedicated web designers, offering them a cost-effective base of operations. This affordability is particularly attractive for companies looking to hire remote teams. 


Cost of renting 


In Baku, the average monthly rent for a one-bedroom apartment in the city center is approximately 600 AZN (around $353).


Top industries hiring in Azerbaijan


Key industries like IT, construction, and services are on the rise, as reported by Glassdoor. This growth opens doors for skilled professionals, businesses, and companies hiring remote workers in Azerbaijan. 


Top skills in Azerbaijan


The demand for skilled professionals in Azerbaijan aligns with global trends, focusing on IT, engineering, and project management. The growing tech sector, highlighted in reports by the World Bank, needs tech-savvy professionals. This trend creates opportunities for businesses and individuals alike, making Azerbaijan an attractive destination for those looking to develop their careers or expand their operations.


Salary structure for various roles


The salary structure in Azerbaijan varies across industries and roles, offering a competitive yet reasonable range. For instance, a mid-level web designer can expect to earn about 1,200 AZN per month roughly $706, This range is attractive for companies looking to establish a strong presence in the region, allowing them to offer competitive salaries without compromising on quality.



Payroll tax in Azerbaijan



Payroll tax in Azerbaijan


Understanding the payroll tax system in Azerbaijan is crucial for businesses operating in the country. The tax structure includes a 14% income tax for monthly salaries below 2,500 AZN  ($1470) and higher salary rates above this threshold. This knowledge is vital for companies, particularly those in the tech sector, as it impacts financial planning and budgeting. 


Employee income tax


  • Salaries below 2,500 AZN: Subject to a 14% wage tax.

  • Salaries above 2,500 AZN: Taxed at 350 AZN plus 25% of the excess amount.


Employer social security contributions


  • Employers in Azerbaijan are required to contribute 22% towards social security for their employees. 


Azerbaijan weekend days


  • In Azerbaijan, the standard weekend days are Saturday and Sunday. 


Azerbaijan public holidays 2024


  • 1 - 2 January: New Year Holiday

  • 20 January: National Mourning Day

  • 8 March: International Women's Day

  • 20 - 24 March: Novruz Holiday

  • 10 - 11 April: Ramazan Bayram Holiday

  • 9 May: Victory Day

  • 28 May: Republic Day

  • 15 June: Salvation Day

  • 16 - 18 June: Gurban Bayram Holiday

  • 17 June: Salvation Day Holiday

  • 26 June: Armed Forces Day

  • 8 November: Victory Day (Zəfər Günü)

  • 9 November: Flag Day

  • 11 November: Flag Day Holiday

  • 31 December: Solidarity Day of Azerbaijanis



Employment laws in Azerbaijan


Hours & pay regulations


  • Normal working hours: The maximum working hours for your team are set at 8 hours per day, capping the week at 40 hours.

  • Aggregate accounting of working time: For companies needing flexibility, Azerbaijan allows 'aggregate accounting' of working hours. It means you can balance work hours annually,, accommodating seasonal peaks and troughs in your business. Just remember, daily work must not exceed 12 hours.

  • Reduced working hours: If your business operates in high-risk environments, note that working hours are reduced to a maximum of 36 hours per week. This is crucial for ensuring the health and safety of your employees in challenging conditions.

  • Part-time work: In Azerbaijan, you can offer part-time arrangements to meet your business needs and your employees' preferences or requirements, such as health-related adjustments.


Overtime regulations


  • Overtime work: Overtime work is clearly defined in Azerbaijan. If your employees work beyond their standard hours, it's considered overtime. However, it's limited to ensuring employee well-being – a maximum of 4 hours over two consecutive days or 2 hours in demanding work conditions.

  • Overtime compensation: overtime work is compensated at least double the standard hourly wage.



Night work considerations


  • Night time hours: The period from 10 pm to 6 am is considered nighttime. Employees working during these hours, especially in heavy and harmful conditions, are entitled to reduced working hours and increased pay.


Breaks and rest periods


  • Daily rest: Employees must have at least 12 hours between working days. This ensures adequate rest and recovery.

  • Weekly rest: A standard five-day working week includes two days off, while a six-day week includes one day off. These rest days are essential for maintaining a healthy work-life balance.


The Growing IT Sector in Azerbaijan


Azerbaijan's IT sector is experiencing significant growth, creating opportunities for outsourcing and outstaffing services. This growth attracts top IT staff augmentation agencies and companies looking to hire freelance dedicated PHP programmers and developers in other specialized areas. The sector's expansion is a boon for businesses focused on hiring dedicated development teams and exploring innovative tech solutions.



Set your team in Azerbaijan


Set your team in Azerbaijan


Azerbaijan's evolving business landscape presents unique opportunities for remote team expansion. The country's skilled talent pool, particularly in the tech sector, is an untapped resource for global businesses. Remote employment solutions are increasingly popular, offering flexibility and access to diverse skills. Companies can leverage these opportunities to build robust teams that drive innovation and growth.


Risks of misclassification


In the realm of remote employment, the significance of employer-of-record (EOR) services cannot be overstated. These services are essential in navigating the complexities of employment laws in Azerbaijan. EOR services ensure legal compliance, particularly in managing payroll, taxes, and employee benefits. They act as a legal employer on behalf of companies, mitigating risks associated with the misclassification of employees and contractors. 



Employing in Azerbaijan


Employing in Azerbaijan involves understanding and adhering to the country's Labor Code. This includes regulations on working hours, leave entitlements and employee rights. Businesses must know these laws to ensure smooth operations and avoid legal pitfalls. This is where EOR services and staff augmentation agencies become invaluable, providing expertise and support in compliance and HR management.



Competitive benefits package in Azerbaijan


Employers in Azerbaijan recognize the importance of offering competitive benefits packages to attract and retain top talent. These packages often include a mix of traditional and modern benefits tailored to the workforce needs.


Key components of benefit packages


  • Health insurance: Comprehensive health insurance is a standard part of benefits packages, providing employees with essential health coverage.

  • Dental and vision Insurance: Alongside health insurance, many employers also offer dental and vision insurance, covering a range of services from routine check-ups to more complex procedures.

  • Mental health support: Recognizing the importance of mental well-being, employers incldue mental health support services in their benefits packages. This can cover access to counseling services, mental health days, and wellness programs.

  • Pension or 401(K) plans: To support employees' long-term financial security, pension plans or equivalent retirement savings plans like 401(K)s are often part of the benefits package.

  • Life and disability insurance: Life and disability insurance provide additional security for employees, offering protection and support in case of unforeseen circumstances.


Additional incentives


  • Performance bonuses: Some employers in Azerbaijan offer bonuses or other financial incentives to reward good performance or motivate employees. These can be based on individual or company-wide achievements.


Taxes in Azerbaijan


Azerbaijan's approach to personal income tax is comprehensive, encompassing both residents and non-residents and is crucial for businesses and individuals operating within the country. Here's a breakdown of the aspects:


Taxation for Residents and Non-Residents


  • Residents: In Azerbaijan, residents are taxed on their worldwide income. This means that all income generated within and outside Azerbaijan is subject to taxation.

  • Non-Residents: Only the income generated from sources within Azerbaijan is taxable for non-residents. This distinction is vital for individuals and businesses with international operations.


Taxable base calculation


  • Residents: The taxable base for residents is calculated as the difference between their gross income for a calendar year and any allowable expenses or deductions.

  • Non-Residents with Permanent Establishment (PE): For non-residents engaged in activities through a PE in Azerbaijan, the taxable base is the gross income from Azerbaijani sources minus related expenses or deductions.


Personal income tax rates


  • General tax rates: From 1 January 2019, a special exemption applies to employees in non-oil-gas and non-government sectors. For these employees, monthly income up to AZN 8,000 is exempt from tax, while income above AZN 8,000 is taxed at 14% of the amount exceeding AZN 8,000.



Types of leave



Parental leave


  • Maternity leave: Expectant mothers are entitled to 126 days of paid maternity leave, divided into 70 days pre-delivery and 56 days post-delivery. This period can be extended by 14 days in case of a difficult birth. The State Social Protection Fund covers maternity leave at the full salary rate.

  • Paternity leave: Fathers can avail 14 days of unpaid paternity leave following the birth of their child.

  • Adoption leave: Women adopting infants under two months old are eligible for 56 leave days.



Sick Leave


  • Employees can take paid sick leave upon presenting medical documentation. The first 14 days are employer-paid, with subsequent days compensated by the State Social Protection Fund.



Paid Leave


  • Azerbaijan observes 24 public holidays. Employees are guaranteed a minimum of 21 days of paid annual leave, increasing with tenure at the company.



Employment Termination



Termination process


Employment contracts in Azerbaijan must be terminated following the guidelines of the Employees Act. This includes ensuring the final payment is made before the last working day and notifying the Ministry of Labour and Social Protection of Population about the termination details.



Notice period


The notice period varies based on the employee's tenure, ranging from 6 weeks for those with up to 2 years of service to 5 months for those with over 25 years. In cases of downsizing, a 2-month notice is mandatory, with provisions for job search leave.



Severance pay


Severance pay depends on the duration of employment, from one month's salary for less than a year of service to double the monthly salary for over 10 years of service. Additional severance is required in specific circumstances like redundancy or disability.



Probation periods


In Azerbaijan, the typical probationary period can extend to three months. Within this timeframe, the employer and employee can end the employment contract, provided they give a notice of three days. This probationary phase is essential, as it allows both parties to evaluate if the role is a good fit.



tech talent hub


Hire top talent in the Caucasus


Think hiring top-notch tech minds is pricey? Think again! For just 199€ a month, you can hire employees in your team. It’s quality expertise without the hefty price tag.


Also, with us, one click is all it takes to hire freelancers who are ready to contribute to your projects.


The best part? We connect you with top tech talent from the Caucasus, at half the cost you'd expect in the U.S. and EU. So, you get the best for less – it's as simple as that!


Hire Android Developers


The Caucasus is a goldmine for Android developers. With Gegidze, you can easily connect with these experts, known for their prowess in mobile app development. Hiring an Android developer here means bringing cost-effective and innovative solutions to your mobile app needs.


Hire Data Analysts


Data analysts from the Caucasus are the key to unlocking valuable insights from your data. These analytical professionals will help you make data-driven decisions, a crucial step for businesses aiming to stay ahead in the market.



Hire DevOps Engineers


For businesses looking to streamline their development and operations, the Caucasus offers skilled DevOps engineers. These professionals are invaluable for companies planning to hire remote development teams, ensuring seamless integration and continuous delivery.



Build dedicated remote teams in Azerbaijan


In Azerbaijan's evolving business landscape, the opportunity to hire dedicated development teams is vast. Gegidze offers a streamlined pathway for companies to access top-tier talent, including dedicated Java developers, iOS developers, and experts in various other technologies. Whether you're looking to establish an in-house team or a dedicated sales team, Gegidze's platform is your solution.



Hire Marketing teams in Azerbaijan


For businesses aiming to amplify their marketing efforts, Gegidze is the go-to. With our help, you can hire a marketing team that's adept in modern marketing strategies. This includes teams proficient in digital marketing, capable of leveraging social media and SEO to elevate your brand's presence. 



Hire Design teams in Azerbaijan


Companies can benefit from local talent in creating visually appealing and brand-aligned designs for websites, social media profiles, and marketing materials. Utilizing remote design teams can provide cost savings and access to a diverse range of design expertise.


Hire Development Teams in AzerbaijanIn the heart of Azerbaijan's burgeoning tech scene, Gegidze stands as a beacon for businesses seeking to hire dedicated development teams. Specializing in IT outsourcing and outstaffing solutions, we tailor our services to meet your unique business requirements, ensuring a perfect synergy between your goals and our expertise.


With us, you can hire dedicated developers such as:

  • Java Developer

  • Ios Developer

  • Laravel Developer

  • Angular Developer

  • Dedicated android developer

  • etc...



F.A.Q


What is the law on employment in Azerbaijan?

The Labor Code of Azerbaijan governs employment law in the country. This detailed legal framework establishes rules for employment relationships, defining both employer and employee rights and responsibilities. It encompasses a range of employment aspects, such as working conditions, employment contracts, wages, working hours, leave, and termination procedures.

What is the severance pay in Azerbaijan?

What are the maximum working hours in Azerbaijan?

What is the payroll tax in Azerbaijan?

What are the working hours in Azerbaijan?


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