SPEAK TO AN EXPERT
Hiring employees compliantly in Afghanistan means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Afghanistan so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:
(a) Establish your own new legal entity, banking, accounting and payroll service in Afghanistan or
(b) use an Employer of Record like Global Expansion who can handle all of the details for you.
Labor Laws In Afghanistan
Employment laws in Afghanistan are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Afghanistan employment laws and Afghanistan policies here.
Probation Period in Afghanistan
- Probationary period should not exceed 2 weeks
Annual Leave in Afghanistan
- The employees are entitled to 20 days of paid recreational leave per year.
- Employees are entitled to 10 days of paid essential leave
Holidays in Afghanistan
|Liberation Day||15th February|
|First day of Ramadan|
|Mujahideen Victory Day||28th April|
|Labor Day||1st May|
|Day of Arafat|
|Afghan Independence Day||19th August|
Maternity Leave Afghanistan
- A female employee is entitled to 90 days of paid maternity leave.
- 30 days of leave is granted before the delivery and the remaining is granted post delivery
Paternity Leave Afghanistan
- There is no paternity leave
Sick Leave in Afghanistan
- An employee is entitled to 20 days of sick leave with pay and other allowances per year.
- Employee’s sick leave for up to three days can be granted on the basis of a written notice.
Work Hours in Afghanistan
- The typical working week is Sunday through Thursday.
- Business hours are typically 7:30 AM to 4:30 PM
- The Labor Law sets a maximum of 40 working hours per week on average.
Overtime in Afghanistan
- The overtime may not exceed four hours a day
- An hourly wage for overtime is paid 25% more than the official working hour rate on ordinary days and 50% more than the hourly rate on off days (weekend or holidays)
Termination of Employment in Afghanistan
Under the Labor Law, an employment contract may be terminated under the following circumstances:
- agreement by the parties
- end of contract term
- death of the employee
- a disability hindering the performance of work
- cessation of work for more than six months
- dissolution of the company or reduction in the number of staff
- final conviction leading to at least two months’ imprisonment of the employee
- disciplinary reasons
- refusal to work and
- an unsatisfactory probationary period.
- The procedures for dismissal generally require 30 days’ notice, although it is common for employers to provide one month’s salary and benefits in lieu of notice.
- Under some circumstances, the employee may also be entitled to severance pay.
- The Labor Law does not make any provision for immediate termination.
- Collective redundancies can generally not be carried out without the approval of the Ministry of Labor, Social Affairs, Martyrs and Disabled.
Notice Period in Afghanistan
- If the employer wishes to terminate the employment agreement for any of the reasons provided for in the law, one month’s notice is required.
- Although the law does not state explicitly that the notice must give in writing, it is generally recommended.
- Termination upon immediate notice is possible during the probationary period, unless the reason for termination is unsatisfactory performance of the employee.
- Employees may terminate the employment agreement without prior notice if the employer has violated the labor law or breached the provisions of the employment agreement.
- Termination without notice to employer is also allowed in the case of incurable illness of the employee. In other circumstances, one month’s prior written notice is the general rule.
Severance in Afghanistan
- When an employee is terminated because of cessation of work, reduction in staff, imprisonment or refusal to work, the employer is obliged to make severance payments, based on the duration of employment as follows:
- less than one year: one month’s salary including entitlements;
- one to five years: two months’ salary including entitlements;
- five to ten years: four months’ salary including entitlements; and
- more than ten years: six months’ salary including entitlements.
13th / 14th Month Pay
- There is no statutory requirement to pay the 13th or 14th month salary, however many employers have decided to offer the 13th month salary to their employees. There is no 14th month salary.
- Other payments over holidays:
- According to Art 50 or the Labour Code, when an employee will be paid in advance for authorised recreational leave.
- According to Art 44 in companies where the employer is unable to give holidays during public holidays because the work cannot be delayed, the employee will be entitled to 50% salary in addition to the normal overtime wage as an incentive.
Afghanistan Salary and Wages
Estimate your costs when employing in Afghanistan in 2023. Includes base salary, dependents, benefits, taxes, social contributions, and payroll costs. Monthly or yearly calculation period.
This calculator provides an estimate only. The final calculations mai differ based on the specifics of any given situation and changes in conditions.
The calculator for Afghanistan is coming soon, development in progress.
Income Tax in Afghanistan
- The natural and legal persons are obliged to pay the tax as following based on the provisions of this Law:
- Resident persons: from overall income (income from both Afghan and Non-Afghan sources)
- Non-resident persons: Only from Afghan revenue sources.
- The income tax of legal persons shall be 20 percent of taxable income for the tax year.
- The income tax shall be assessed and exchange to Afghani currency.
- The exchange rate shall be the average of open rates determined by Da Afghanistan Bank on the basis of buy rate at the end of each month.
- Effective as of 1 Hamal 1388, the new tax law reduced the monthly exemption from AFN 12,500 to AFN 5,000 (or prorated share for alternate payroll periods) per person.
- The tax law also added a 2 percent tax bracket.
- The Income Tax Law (Article 4) provides a monthly schedule of withholding rates.
- The income tax of natural persons is calculated as below chart:
|Income slab per month||Applicable Rate|
|Between AFN 0 and 5000||0%|
|Between AFN 5000 and 12,500||2% of amount over 5000|
|AFN 12,500 to 100,000||150 + 10% of amount over 12,500|
|Over 100,000||8,900 + 20% of the amount over 100,000|
Social Security in Afghanistan
Social Insurance Program
- Employed persons in private-sector establishments, cooperatives, social organizations, joint enterprises, and government are covered
Social Insurance Program
- Applicants for an Afghan visa, regardless of the type of visa, are required to obey the laws of the Islamic Republic of Afghanistan.
- Currently, the standard visa processing time is 5-7 business days but this may vary on an individual basis.
- Foreign nationals who have entered Afghanistan on an Entry Visa or a Work Visa are eligible to work.
- This category of individuals must obtain a work permit from relevant agencies after entry to Afghanistan.
- If employment is the purpose of your visit, an official letter of introduction from your employer, sponsoring government or organization stating the purpose and duration of your trip is required.
- Please also include any sponsorship information and a financial guarantee for expenses that will be incurred in Afghanistan.
- Applicants applying for a Work Visa should be below the age of retirement (65) and must provide their educational documents along with the visa application, invitation or introduction letter from the employer company in Afghanistan (including passport information, the purpose of travel and duration of stay of the applicant).
- Additionally, they should also have a confirmation letter from Consular Affairs Directorate-General of the Ministry of Foreign Affairs of the I.R. of Afghanistan.
- Those who intend to travel to Afghanistan for investment and business purposes can apply for an Afghan Business Visa by providing the following documentation:
- Introduction or permission letter from the Ministry of Foreign Affairs, Chamber of Commerce, or other related official bodies
- Work permit and business license
- Address of the company
- Documents providing the type of commercial activities, payment of taxes and bank account number
Type of Visa/Permit
|Official Visa (OV)||
|Business Visa (BV)||
||1 to 3 years||
|Working Entry Visa (WV)||
Value Added Tax (Vat)
- The Afghanistan Revenue Department (ARD) has announced that the country is moving forward with the implementation of its new VAT regime with effect from 22 December 2021
- The standard VAT rate is 10%
Mandatory Benefits Of Afghanistan
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay
- Statutory benefits also include social security benefits
Mandatory Benefits Overview
Social Security Benefits
Payments And Invoicing in Afghanistan
- The taxable year is the solar year which starts from the first day of Jadi (21st December) and ends on the last day of Qaws (20th December).
- A legal person (but not a natural person) wishing to use a different taxation year may apply in writing to the Ministry of Finance explaining the reasons for the requested change.
- The Afghanistan Revenue Department (ARD) is responsible for the administration and collection of tax and non-tax revenue for the Government of Afghanistan
Accrued Benefits in Afghanistan
|Christmas Bonus Over Vacations %||0%|
|Severance per Year %||Severance payments, based on the duration of employment are as follows:
• less than one year: one month’s salary (8.33% of annual salary)
• one to five years: two months’ salary (16.66% of annual salary)
• five to ten years: four months’ salary (33.33% of annual salary)
• more than ten years: six months’ salary (50% of annual salary).
|Vacations %||Based on 20 days of paid vacation a year
(5.49% of annual salary)
|Notice %||One month’s notice is required (8.33%)|
|Christmas Bonus Over Notifications%||0%|
|Vacations Plus%||Based on 20 days of paid vacation a year
(5.49% of annual salary)
|Total percentage of Salary (yearly)||The total employment accruals as a percentage of salary per anum are equal to 22.15% of annual salary.|
Payroll Accruals in Afghanistan
Country Accruals Additional Information
Payroll Accruals Additional information
|Annual Leave||Employees are entitled to 20 days of paid recreational leave and 10 days of paid essential leave. Therefore, Employers must take into account the costs associated with this paid leave.||This equals 30 days of pay or 8.22% of annual salary (30/365 days)|
|Maternity Leave||A female employee is entitled to 90 days of paid maternity leave.||This equals 24.65% of annual salary (90/365)|
|Sick Leave||An employee is entitled to 20 days of sick leave with pay||This equals 5.48% of annual salary (20/365)|
|Overtime Pay||An hourly wage for overtime is paid 25% more than the official working hour rate on ordinary days and 50% more than the hourly rate on off days (weekend or holidays). The overtime may not exceed four hours a day|
|Severance Pay||Severance Pay is based on duration of employment: -
• less than one year: one month’s salary including entitlements;
• one to five years: two months’ salary including entitlements;
• five to ten years: four months’ salary including entitlements; and
• more than ten years: six months’ salary including entitlements. Note: - For the purpose of this calculation, assume one to five years employment period.
|This equals 16.66% of annual salary (2/12 months)|
|Social Security Contribution||Employers are not required to make any contribution to the social insurance program.|
Why use Global Expansion to hire in Afghanistan
Establishing a branch office or subsidiary in Afghanistan can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Afghanistanian labor laws are complex.
The company also has a responsibility to comply with specific employment practices dictated by Afghanistanian law to maintain its good standing as an equal opportunity employer.
Global Expansion makes it easy for you to expand into Afghanistan. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.
We enable you to stay in control of everything. Our Afghanistanian Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.