Azerbaijan may introduce minimum limit on social contributions for employers

Business Materials 12 July 2012 19:35

Azerbaijan, Baku, July 12 /Trend A.Akhundov/

Azerbaijan can set standards to calculate the minimum level of contributions for compulsory social insurance paid by the employer for various sectors of the economy, Chairman of the State Social Protection Fund of Azerbaijan Salim Muslimov told reporters on Thursday.

"They will be calculated according to the average share of the wage fund in the turnover of companies. For example, in the construction sector average of 20 percent of the company's turnover falls on the payroll. Salaries provided by the employer, may be below this level, however, the minimum deductions will be paid from this level. If wages are higher than the norm, the sum will be charged according to the fact. These standards will vary depending on the sector of the economy," Muslimov said.

He noted that it is one of the measures to combat illegal employment, and employers conceal of the real size of employees' salaries in Azerbaijan.

"In the coming days we will submit proposals to amend the Law on Social Insurance and Pensions to the Government to take drastic measures against illegal employment and the concealment of the real wage." Muslimov said.

He added that similar authority granted to the Ministry of Taxes and the State Customs Committee.

In Azerbaijan, 25 percent of salary directed for the payment of social security, 22 percent of which is paid by employer, three percent is deducted from employee wages.