Sourcing the right benefits and providing an acceptable level of compensation are both key to finding the right talent and staying compliant. Your employees expect to make a certain amount and at least receive guaranteed benefits required by law. Failing to meet Kazakhstan’s compensation laws or benefits requirements could lead to fines or delays.
G-P can make the entire expansion process easier through Kazakhstan compensation and benefits outsourcing. We will pay your employees through our payroll and add them to our Kazakhstan benefits management plan, all while making sure you stay compliant. Your only concern can be making your new location successful.
Kazakhstan Compensation Laws
Kazakhstan’s minimum wage has slowly increased over the years and currently is set at 2,500 tenge per month (2020). Employers establish wages for all employees, but they need to at least meet the minimum wage. Kazakhstan compensation laws also dictate that employers should pay employees at least once a month on a date included in the employment contract or collective bargaining agreement (CBA).
Guaranteed Benefits in Kazakhstan
Your Kazakhstan benefits management plan has to include guaranteed benefits such as paid time off, maternity and paternity leave, health insurance, and more. The country celebrates 12 national holidays, many of which are multi-day celebrations. Employees should also receive a minimum of 18 days of paid vacation leave, which is paid at least three days before the employee takes the leave.
Maternity leave is another important benefit for employees. Female workers should get 70 calendar days of paid leave before giving birth and 56 days of paid calendar leave after giving birth. If they have more than one child, they should get 70 calendar days of paid leave after the birth as well. Fathers typically get unpaid paternity leave.
Kazakhstan Benefits Management
Giving employees benefits should include more than just the statutory benefits required by law. Your employees should also receive additional benefits that will encourage them to stay in their positions longer. Some of the more common supplemental benefits include:
- Housing allowance
- Transportation allowance
- Company car
- Education allowance
Restrictions for Benefits and Compensation
The biggest restriction for benefits and compensation is setting up a subsidiary. You have to incorporate in Kazakhstan before you hire employees, pay them, and disperse your benefits plan. Unfortunately, the process to establish a subsidiary isn’t always smooth, and it can take months before you’re ready to start working and compensating employees.
You won’t have this restriction when you work with G-P. We’ll gladly act as the Employer of Record by using our existing subsidiary to help you start working as quickly as possible without the stress of meeting compliance standards.
Kazakhstan Competitive Benefits Planning
With a strategic employee benefits plan, you can successfully recruit employees in Kazakhstan and deepen engagement across your workforce. Your benefits scheme can strengthen your company’s international hiring efforts and long-term retention goals, so it’s wise to prioritize planning early in your growth process.
Kazakhstan employee benefits plans
Designing Kazakhstan employee benefits plans requires navigating legal compliance and employees’ personal preferences and expectations. Beyond meeting mandated standards, you can also use your plan to demonstrate how much you value your team.
By investing resources into thoughtful offerings for your employees, you can support them in a crisis, motivate them to develop professionally, and empower them to do their best work. Your benefits program is mutually beneficial to your company and your employees.
Consider offering fringe benefits such as:
- Performance bonuses
- Travel and housing assistance
- Childcare stipends
- Ongoing learning opportunities
Mandatory employee benefits in Kazakhstan
Before you add supplemental benefits to your plan, ensure you’re meeting all standards for required benefits. Employers in Kazakhstan must provide:
- Employment insurance
- Paid time off
- Additional vacation days for employees working in hazardous conditions
- Holiday leave
- Maternity leave
- Sick leave
- Parental leave
- Leave for life events, including marriage and bereavement
How to design your employee benefits program
Any country where you establish your company will have different regulations and conditions to navigate as you plan benefits. Overall, you can approach planning by following these fundamental principles.
1. Budget based on your program goals
Consult with key stakeholders about top objectives, then decide how your budget can work with those goals. Discuss what size team you can support as you start out. You might also set employee recruiting and retention goals during this stage.
Once you’ve made these decisions, you can set an adequate budget to reach your company objectives.
2. Evaluate the local economy
Tailor your recruiting and retention techniques to employee needs by discussing benefits priorities with local workers. You’ll also want to research the local market and the competition. See if you can match market standards for benefits at competitive rates.
3. Build your benefits program
With your research, you can start developing a strategic benefits scheme. Begin with mandatory requirements and use the remaining funds in your budget to support market standards and the offerings your employees want most.
Average cost of benefits per employee
Because each company’s administration, goals, and team size are different, average benefits costs will vary. Base your projected expenses on your company’s requirements and resources rather than a national average.
You might allocate a percentage of revenue each year to support your program so you can quickly scale your benefits with company growth.
How to calculate employee benefits
Follow legal mandates for any required benefits offerings. For most forms of mandatory leave, you should provide full payment at regular wage rates for each employee.
When you calculate supplemental benefits, you can use your research to set competitive rates. Your offerings can help your company stand out in the region when you begin recruiting and hiring.
How are employee benefits taxed in Kazakhstan?
Most forms of compensation and benefits are considered taxable under Kazakhstan laws. As an employer, you must withhold a flat rate of 10 percent of each employee’s income for taxes.
Employee health benefits plans
The government is currently moving the country toward universal health care, although private health insurance options exist. Some companies choose to provide supplemental insurance as a fringe benefit. Regardless of whether you include it in your plan, you must contribute to medical insurance coverage for all your employees through the national social security system.
Work with G-P to build your global team
G-P’ global employment platform helps you build and scale an international team quickly and easily, ensuring all benefits offered to candidates are compliant and in line with local regulations. Learn more about our platform and request a proposal today.