Azerbaijan is preparing significant adjustments to social insurance contributions for employees working in the non-oil, non-state sector – a system that has been in place since 2019.
The changes were outlined in amendments to the Law “On Social Insurance,” discussed today in the Milli Majlis.
What Has Been the System Since 2019?
For the past seven years, employees in this category have paid social insurance based on a two-tier structure:
If monthly income was up to 200 manats: employees paid 3%, while employers contributed 22%.
If income exceeded 200 manats: the employee paid 6 AZN + 10% of the amount above 200 manats; employers paid 44 AZN + 15% of the amount exceeding 200 manats.
What Will Change From January 1, 2026?
The new proposal keeps the rules unchanged only for monthly incomes up to 200 manats. Everything above this threshold will now be reorganized into a multi-tier system:
1. Income from 200 to 8,000 manats
Employee: 6 AZN + 10% of the segment between 200–8,000 AZN
Employer: 44 AZN + 15% of the segment between 200–8,000 AZN
2. Income above 8,000 manats
A new upper bracket is being introduced:
Employee: 786 AZN + 10% of income above 8,000 AZN
Employer: 1,214 AZN + 11% of income above 8,000 AZN
This results in a combined social insurance rate of 21% for high-income earners.
The aim of the reform is to standardize contributions across income groups, align with long-term fiscal planning, and modernize the insurance framework for higher-earning professionals outside the oil-and-gas sector.
After debate, lawmakers approved the draft law in its first reading.
