Payroll and Benefits Guide Uzbekistan

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employer Social Tax

Employee Income Tax

General

The national minimum wage in Uzbekistan is 980,000 UZS.

Payroll Cycle

The payroll frequency is typically monthly. Employers must make the payment of salaries on the last working day of the month.

General

The standard working week consists of 40 hours over the course of five or six days. Working hours are reduced for minors and employees in difficult and dangerous sectors.

Overtime

All work more than the standard working hours per week is to be paid as overtime and is regulated by employment contract/collective agreements. When an employee is requested to work overtime or work on holidays, there are maximums in relation to the number of hours allowed.

All overtime hours in excess of 40 hours a week are paid at an overtime compensation rate; this rate is stipulated in the employment contract/collective agreements etc. This rate is commonly 200% of the employee’s regular rate of pay.

Working Week

Monday–Friday/Monday-Saturday

Paid Time Off

Employees are entitled to a minimum of 15 days of paid vacation year after completing 6 months of continuous employment. The paid leave entitlement may increase for minors and employees with difficult and dangerous jobs.

Public Holidays

The local government decides each year if holidays falling on the weekend are lost or moved to a working day in lieu.

Religious holidays are determined by the lunar cycle and will show as ‘tentative’ until they are confirmed nearer the date of the holiday.

Sick Days

Sick leave is paid by the employer but is excluded from the employer’s taxable income. Sick leave compensation must be paid to an employee in the event of illness, injury and in cases where an employee is caring for a sick family member, as well as in some other instances.

Sick leave compensation payment ranges between 60% to 80% of an employee’s average earnings, dependent on the employment contract, reasons for sick leave, and length of service. In addition, employees are required to submit a medical certificate for any absence after their recovery and return to work.

In cases of a labor-related injury or occupational disease or other special qualification of the employee, the amount of sick leave compensation is 100% of the employee’s average earnings.

Maternity Leave

An employee is entitled to paid maternity leave of up to 126 days, 70 days of leave prior to the birth of a child and 56 days after the birth. Employees are given 70 days in the case of multiple/complicated birth.

During maternity leave, an employee is entitled to social security benefit of 100% of their regular salary.

Paternity Leave

There are no provisions in the law regarding paternity leave.

Parental Leave

There are no provisions in the law regarding parental leave.

Other Leave

In Uzbekistan, an employee is entitled to 56 days of paid leave following the adoption of a child; if an employee adopts multiple children, the entitlement increases to 70 days of paid leave.

Termination Process

The termination process varies according to the employment agreement or collective agreement in place and is based on the type of contract and reason for termination. However, no termination due to economic reasons or long-term disability can occur without the Employee Insurance Agency (UWV).

If an employee is a trade union member, the employer must receive approval before terminating the employee. Upon receipt of approval, the employee must proceed to dismiss the employee within one month.

Notice Period

The notice period depends on the reason for termination:

• Redundancy – 2 months’ notice
• Lack of qualification or health reason that impedes the employee’s ability to carry out their duties– 2 weeks’ notice
• Change in the company’s ownership – 2 months’ notice
• Gross misconduct or performance- 3 days’ notice

Payment in lieu of notice is permissible.

Severance Pay

The amount of severance pay cannot be less than the average monthly wage, then under the new code, the amount of severance pay will depend on the length of service with the employer:

• for employees with work experience of up to 3 years – from 50% of the average monthly salary
• for employees with work experience from 3 to 5 years – from 75% of the average monthly salary
• for employees with work experience from 5 to 10 years – from 100% of the average monthly salary
• for employees with work experience from 10 to 15 years – from 150% of the average monthly salary
• for employees with more than 15 years of experience – at least 200% of the average monthly salary

Probation Period

A provisional trial can be established only when an employee is hired. It is not allowed to establish a provisional trial when transferring an employee to another job and seconding an employee to another employer.

The provisional trial period cannot exceed three months and for heads of organizations, their deputies, chief accountants, and heads of separate divisions of organizations – six months.

VISA

Most nationals require either a B-1 Business Visa or a B-2 Business Visa to enter Uzbekistan to conduct business activities in Uzbekistan and must obtain it before travel from an Uzbek Consulate or Embassy.

Foreign nationals arriving from countries without an Uzbek consulate or embassy may apply for a visa upon arrival at the airport in Uzbekistan provided that a request for a visa upon arrival is included in a visa application form and approved by the Consulate Department of the Ministry of Foreign Affairs of Uzbekistan.

Apart from Turkmenistan and Tajikistan, nationals from the Commonwealth of Independent States (CIS) do not require a business visa and are visa-waivered to enter Uzbekistan and conduct business activities.

In Uzbekistan, the requirement for a work permit is generally determined by the nature of the work assignment. An employee can conduct most unremunerated activities on a short-term basis with a business visa. However, a legal assessment is recommended before travel to Uzbekistan.

Whether a work permit is required depends on levels of qualifications, employer entity, and nature of work. The most common Uzbek work authorization is a work permit (direct-hire work permit).

General

The standard rate of VAT in Uzbekistan is 12.00%.