Starting January 1, 2027, Kazakhstan plans to increase the minimum wage (MW) from KZT 85,000 to KZT 110,000. This change will affect employers by raising not only the minimum level of remuneration but also the calculation bases for mandatory pension contributions, social contributions, and overall personnel costs. Alongside the planned minimum wage increase, the rate of mandatory employer pension contributions (MEPC) is scheduled to rise from 3.5% to 4.5%. Companies should assess the upcoming changes in advance, review their payroll budgets, and prepare their payroll systems to comply with the new requirements.<\/p>\n
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Under the proposed changes, the minimum wage in Kazakhstan will increase from the current KZT 85,000 to KZT 110,000 starting January 1, 2027. The final amount must be established by the Law on the Republican Budget for 2027\u20132029. According to Article 103 of the Labor Code of the Republic of Kazakhstan, the salary of an employee who has fully completed the monthly working hours and fulfilled their employment duties cannot be lower than the statutory minimum wage. Employers must consider the following requirements:<\/p>\n
Companies with employee salaries below the proposed minimum will need to review their remuneration arrangements and, where necessary, update their HR documentation.<\/p>\n
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One of the key changes is the increase in the mandatory employer pension contribution rate. In accordance with Article 251 of the Social Code of the Republic of Kazakhstan, the MEPC rate is scheduled to increase gradually:<\/p>\n
MEPC are paid from the employer’s own funds and are not deducted from employees’ salaries.<\/p>\n
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If an employee born in 1990 works full-time and receives the statutory minimum wage, the employer’s pension contributions will be calculated as follows:<\/p>\n
As a result, the employer’s monthly MEPC expenses for this employee will increase by KZT 1,975. Overall personnel costs will also rise due to the higher minimum wage and changes in other mandatory contributions. It should be noted that certain categories of employees are exempt from MEPC. These include individuals born before January 1, 1975, employees who have reached retirement age, and other categories specified in Article 248 of the Social Code.<\/p>\n
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The increase in the minimum wage will lead to adjustments in the minimum and maximum income thresholds used to calculate certain mandatory contributions.<\/p>\n
Employers must take these adjustments into account when calculating salaries, determining mandatory contributions, and planning personnel expenses.<\/p>\n
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Starting January 1, 2027, the unified payroll payment rate is scheduled to increase from 24.8% to 25.8%. The unified payment combines several mandatory taxes and social contributions, including MEPC. It is available to certain categories of employers specified in the Tax Code of the Republic of Kazakhstan, particularly micro, small, and medium-sized businesses applying eligible special tax regimes. Employers using the unified payment include MEPC within the combined payment and do not calculate them separately. For employees exempt from certain social contributions, the applicable rate is adjusted in accordance with legislative requirements. Companies should review their tax regimes and procedures for calculating mandatory payments to ensure accurate payroll processing from the beginning of 2027.<\/p>\n
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The planned increase in the minimum wage will lead to higher payroll expenses, particularly for companies employing a significant number of workers whose salaries are currently at the statutory minimum. According to preliminary estimates, employers’ total payroll expenses may increase by approximately KZT 426 billion. At the same time, higher salary expenses and mandatory social contributions may affect corporate income tax (CIT) liabilities. Under the Tax Code of the Republic of Kazakhstan, payroll expenses, social contributions, MEPC, and mandatory social health insurance contributions may be deducted when determining taxable income, provided the applicable legal requirements are met. Therefore, an increase in payroll expenses may result in higher tax deductions and a corresponding reduction in taxable income. The actual impact on CIT will depend on the company’s financial performance and applicable tax regime.<\/p>\n
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To ensure a smooth transition to the new calculation parameters, companies are advised to review their existing remuneration systems and HR documentation in advance. Key preparation measures include:<\/p>\n
Timely preparation will allow companies to reduce the risk of payroll calculation errors, maintain compliance with labor legislation, and improve the accuracy of personnel cost planning.<\/p>\n
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FChain Kazakhstan provides professional accounting, tax, HR, and legal services for businesses. Comprehensive support enables employers to adapt their internal processes to legislative changes, ensure accurate payroll and mandatory contribution calculations, and manage personnel expenses efficiently.<\/p>\n
Payroll Services<\/strong><\/a> \u2014 Professional calculation of salaries, pension contributions, taxes, and social payments in compliance with applicable legislative requirements.<\/p>\n Accounting and Tax Services<\/strong><\/a> \u2014 Accounting and tax recordkeeping, recognition of personnel expenses, and preparation of mandatory financial and tax reports.<\/p>\n HR Services<\/strong><\/a> \u2014 HR administration, employment documentation management, and updates to personnel records following changes in remuneration conditions.<\/p>\n HR Audit<\/strong><\/a> \u2014 Review of HR documentation, employment agreements, and compliance with statutory remuneration requirements.<\/p>\n Legal Support for Business<\/strong><\/a> \u2014 Legal assistance to employers in implementing new legislative requirements and managing employment relationships.<\/p>\n Drafting Contracts<\/strong><\/a> \u2014 Preparation and revision of employment agreements and supplementary agreements to reflect changes in remuneration conditions.<\/p>\n Legal Audit<\/strong><\/a> \u2014 Assessment of internal corporate documents and procedures for compliance with labor and tax legislation.<\/p>\n