Azerbaijan

There are four ways to hire in Azerbaijan. You can pay through your HQ in short-term situations, engage contractors for independent work, set up a local entity to employ directly, or use an Employer of Record. Each option involves different compliance, cost, and administrative effort. An EOR is often used to hire employees in Azerbaijan without setting up a local company.

Generally, registering a company in Azerbaijan can take anywhere from a few days to a few weeks, depending on the complexity of the company structure and the completeness of the application.

However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, and changes in rules and regulations followed.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Azerbaijan, employment is the right structure under Azerbaijani law, covering entitlements like paid annual leave, sick leave, and social security contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Azerbaijan.

HR compliance in Azerbaijan means your policies and procedures respect all applicable Azerbaijani employment laws and regulations. When you hire in Azerbaijan, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, annual leave (21 days), minimum wage (AZN 400/month), tax credits, and the 40-hour working week. Following these is fundamental for running the business well.

As with every other country, there are certain costs associated with employing a worker in Azerbaijan that come on top of the gross salary you are offering.

An Employer of Record is the legal employer of the individual in Azerbaijan for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as 126 days of maternity leave and 21 days of annual leave. You remain responsible for sourcing workers, managing day-to-day work, and funding payroll each cycle. 

Boundless as the Employer of Record files all pertinent taxes and social security contributions as they relate to the compliant employment of an individual in their home country.

Boundless partners with employment lawyers and advisers in each country we operate in, including Azerbaijan. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

The company remains responsible and informs employees of the day-to-day management of the people and teams employed through Boundless, including any disciplinary or performance issues. Boundless ensures compliance with Azerbaijan-specific procedures, practices, and labour laws while employing people and teams on behalf of the company.

Any new employee who is locally employed through an Employer of Record gets full employment rights and benefits as specified in Azerbaijani employment law. They get a locally compliant employment contract, statutory parental leave, annual leave, illness benefits, any relevant tax credits, and many more.

Both employers and employees in Azerbaijan pay social security contributions. The employer contribution is approximately 23% of the employee’s gross salary; the employee’s is 11%. Employees also pay income tax of 3%-14%, depending on salary. To see exact figures for the salary you plan to offer, use our salary breakdown calculator to download a tailored PDF via email.