How does an Employer of Record (EOR) manage payroll taxes in Kazakhstan
- Natia Gabarashvili
- Oct 17
- 11 min read
Table of contents:
TL;DR: Payroll Taxes and EOR in Kazakhstan
Hiring in Kazakhstan without the right setup is like playing with fire: one mistake in payroll taxes, social contributions, or filings can cost your company tens of thousands in fines, or worse, trigger a tax audit that stalls your expansion.
Here’s how an Employer of Record (EOR) saves you:
Handles everything for you: 10% personal income tax, employee social contributions (~10%), employer contributions (~12–15%), and unemployment insurance (~0.5%)
Becomes the legal employer: Your company avoids entity setup and compliance risk
Manages monthly payroll and filings: Submits everything electronically through the State Revenue Committee (SRC)
Mitigates risk: Protects against fines, misclassification, and errors, while ensuring employees are paid correctly
Bottom line: If you’re serious about hiring in Kazakhstan without the legal and financial headaches, an EOR makes payroll taxes simple, compliant, and risk-free.
Introduction
Imagine hiring your first employee in Kazakhstan and discovering a month later that payroll taxes weren’t filed correctly, fines, backpay claims, and audits are suddenly staring you in the face.
It’s a nightmare no foreign company wants, yet it’s all too common for teams navigating Kazakh labor law alone.
Enter the Employer of Record (EOR): your compliance superhero. The EOR becomes the legal employer, taking responsibility for contracts, payroll, tax withholdings, and social contributions.
They ensure every salary is processed correctly, every filing goes through the State Revenue Committee (SRC), and your business stays fully compliant, all while you focus on scaling your team.
In Kazakhstan, employees face a flat 10% income tax on monthly salaries, with social contributions around 10%. The EOR handles these deductions, submits payments via official channels, and keeps accurate records for audits, making payroll and compliance effortless for foreign companies.
Let’s dive deeper into it.
Overview of payroll taxes in Kazakhstan
Hiring in Kazakhstan is exciting, but it comes with a complex web of payroll taxes, social contributions, and statutory obligations that can trip up even experienced foreign employers.
Navigating these correctly is essential to staying compliant, avoiding fines, and accurately budgeting your labor costs.
Using an Employer of Record (EOR) provider in Kazakhstan simplifies this process, but understanding the rules helps you appreciate the value they provide.
1. Personal income tax (PIT)
Flat rate: 10% of gross salary
Applies to all employees, both local and foreign nationals
Withheld at source by the employer or EOR and remitted to the State Revenue Committee (SRC)
Impacts employee's net salary directly
Example:
An employee earns 500,000 KZT/month. PIT = 500,000 × 10% = 50,000 KZT withheld. The net salary is 450,000 KZT before any social contributions.
2. Social tax and mandatory contributions
Kazakhstan requires both employers and employees to contribute to social security, pensions, and health insurance.
Employer contributions include:
Pension fund contributions (~10% of gross salary)
Health and social insurance (~2–3% depending on sector)
Unemployment insurance (~0.5% of gross salary)
Employee contributions include:
Pension (~10% of gross salary)
Social insurance (~1–2% depending on income)
These contributions are remitted monthly through official channels like the SRC’s online systems.
Example:
Monthly gross salary: 500,000 KZT
Employer pension: 50,000 KZT
Employer health & social insurance: 10,000 KZT
Employer unemployment: 2,500 KZT
Employee pension: 50,000 KZT
Employee social insurance: 5,000 KZT
Total employment cost to employer: 500,000 + 62,500 = 562,500 KZT
Employee take-home pay: 500,000 – 55,000 = 445,000 KZT
3. Other mandatory contributions
Some sectors or employee classifications require additional levies, such as occupational hazard insurance or sector-specific social contributions
These are usually handled automatically by an EOR, ensuring accuracy and compliance
4. Payroll tax vs income tax
It’s critical to distinguish between the two: payroll versus income tax:
Type | Paid By | Purpose | Impact |
Income Tax (PIT) | Employee | Tax on wages | Reduces net salary |
Payroll Taxes | Employer & Employee | Social contributions, pensions, health, and unemployment | Increases total employment cost and funds statutorybenefits |
Understanding this distinction is essential for accurate budgeting and compliance reporting. Many foreign companies underestimate the total cost of employment in Kazakhstan by focusing solely on gross salaries.
5. Employer vs employee obligations
Employee-paid: Personal income tax (10%) + employee portion of pension/social insurance
Employer-paid: Social tax (~12–15% total, including pensions, health, unemployment)
The EOR ensures all calculations are accurate, deductions are made correctly, and payments are remitted on time
By outsourcing payroll to an EOR, foreign employers transfer compliance risk, ensure filings are on schedule, and remain audit-ready with proper documentation.
How an EOR manages payroll tax withholding and payments
Payroll in Kazakhstan is more than just transferring salaries; it’s a legal obligation with strict deadlines and complex calculations.
For foreign companies, errors can result in fines, audits, or back-pay claims. An Employer of Record (EOR) simplifies this process by taking on the responsibilities of the legal employer, ensuring compliance and accuracy every month.
1. Withholding employee income tax and social contributions
An EOR is responsible for calculating and withholding personal income tax (PIT) from each employee’s gross salary.
In Kazakhstan, the PIT is typically 10%, deducted at source and remitted to the State Revenue Committee (SRC).
Additionally, the EOR manages employee social security contributions, which include:
Pension fund contributions
Health and social insurance premiums
These deductions reduce the employee’s net salary but are critical for compliance with Kazakh labor law. The EOR ensures all amounts are calculated accurately according to official rates and salary brackets.
2. Employer social tax obligations
Employers in Kazakhstan have statutory obligations to contribute to social security and other payroll-related taxes:
Employer pension contributions: ~10% of gross salary
Health and social insurance: ~2–3% of gross salary
Unemployment insurance: ~0.5% of gross salary
The EOR calculates these employer-side contributions on top of the employee’s gross salary, ensuring total payroll costs are accurate and fully compliant with local regulations.
3. Monthly Remittance and Reporting
EORs handle the entire monthly payroll cycle, including:
Salary calculation: Gross-to-net computations, including PIT and social contributions
Withholding and remittance: Employee deductions and employer contributions are submitted to the SRC on schedule
Reporting: Electronic filing of payroll taxes, social contributions, and unemployment insurance
Audit readiness: Maintaining detailed records of all payroll calculations, deductions, and filings
By managing this process, the EOR ensures timely remittance, proper reporting, and compliance with Kazakhstan’s labor and tax regulations, reducing your company’s risk of penalties or audits.
Why this matters
With an EOR, foreign companies can:
Hire employees without setting up a local entity
Ensure accurate payroll tax calculations every month
Remain fully compliant with Kazakh labor and tax law
Avoid administrative burden and potential fines or legal exposure
How payroll taxes are calculated in Kazakhstan
Payroll taxes in Kazakhstan are not just numbers on a spreadsheet; they’re legal obligations that determine both employee take-home pay and total employer costs.
For foreign companies, understanding these calculations is essential, and this is exactly where an Employer of Record (EOR) adds value.
They ensure taxes are computed correctly, remitted on time, and compliant with Kazakh labor law.
1. Employee contributions
Employees in Kazakhstan contribute to social security and pension funds, in addition to personal income tax (PIT).
Personal Income Tax (PIT):
Flat rate: 10% of gross salary
Withheld at source by the employer/EOR
Social contributions:
Pension fund: ~10% of gross salary
Health and social insurance: 1–2% depending on sector
Unemployment insurance: 0.5%
Example:
Monthly gross salary = 500,000 KZT
PIT: 500,000 × 10% = 50,000 KZT
Pension: 500,000 × 10% = 50,000 KZT
Health & social insurance: 500,000 × 2% = 10,000 KZT
Unemployment insurance: 500,000 × 0.5% = 2,500 KZT
Total employee deductions: 112,500 KZT
Net salary: 500,000 – 112,500 = 387,500 KZT
2. Employer contributions
Employers also contribute to the social system:
Pension contributions: ~10% of gross salary
Health and social insurance: 2–3%
Unemployment insurance: 0.5%
Example: Same employee with 500,000 KZT gross salary
Pension: 500,000 × 10% = 50,000 KZT
Health & social: 500,000 × 2% = 10,000 KZT
Unemployment: 500,000 × 0.5% = 2,500 KZT
Total employer cost: 500,000 + 62,500 = 562,500 KZT
3. Caps and limits
Certain contributions have upper limits on the taxable base for high earners, ensuring that very high salaries do not result in disproportionate contributions.
The EOR automatically applies these caps, so calculations remain compliant and accurate, even for top-tier employees.
4. Why this matters
Accurate payroll tax calculations impact:
Employee net pay and satisfaction
Employer total labor costs
Compliance with Kazakh labor and tax regulations
Risk mitigation for fines, audits, or back-pay claims
An EOR automates these calculations, integrates local regulations and caps, and ensures that payroll is both accurate and timely.
Payroll tax reporting and compliance
Payroll taxes in Kazakhstan aren’t just about calculations—they’re legal obligations with strict deadlines and serious consequences. For foreign companies, missing a filing or making an error can trigger fines, audits, or back-pay claims. An Employer of Record (EOR) handles this entire process, ensuring compliance and peace of mind.
Monthly payroll tax reporting and payment deadlines
EORs manage all reporting and remittance obligations for employees:
Payroll Tax Declarations: Filed monthly with the Kazakhstan tax authorities, detailing employee salaries, withheld personal income tax (10%), and employer social tax contributions.
Payment Deadlines: Taxes and contributions must be remitted by the 15th of the month following the payroll period. For example, January payroll taxes must be filed and paid by February 15.
Reporting Format: Electronic submissions via the online tax portal ensure accurate reporting of salaries, withholdings, and employer contributions.
Additional Reporting: EORs may also handle annual reconciliations and provide employees with annual tax certificates for income tax purposes.
Penalties for late filings or inaccuracies
Failing to meet reporting requirements can carry significant consequences:
Late Submission Penalties: Fines and interest accrue for declarations or payments submitted after the 15th-day deadline, increasing with the duration of delay.
Errors and Omissions: Inaccurate or incomplete filings can trigger audits, corrective actions, and additional taxes owed.
Non-Compliance Risks: Persistent violations may lead to reputational damage, operational disruption, and more severe financial penalties under Kazakhstan tax law.
How an EOR ensures compliance
EORs protect foreign employers by handling payroll tax compliance end-to-end:
Accurate Payroll Processing: Specialized payroll software and local tax expertise ensure withholding taxes and employer contributions are calculated correctly.
Automated, Timely Reporting: Systems prepare and submit monthly tax declarations well before deadlines, minimizing the risk of late filings.
Dedicated Compliance Teams: EORs maintain teams that stay up-to-date on Kazakhstan tax laws, manage audits, reconcile taxes, and proactively handle compliance issues.
Document Retention and Transparency: Comprehensive payroll records support accurate reporting and provide transparency for both employers and tax authorities.
Risk Mitigation: Rigorous processes reduce errors, late submissions, and audit exposure, ensuring foreign employers remain compliant while focusing on their core business.
Benefits of using an EOR for payroll taxes in Kazakhstan
You want to hire in Kazakhstan. But do you want the paperwork too?
Because that’s exactly what’s waiting if you try the long route. Entity setup. Tax registration. Social security interpretation. Monthly filings with the State Revenue Committee. And yes, back-and-forth emails just to get approvals for payroll remittance working.
At the same time, you don’t want to hand off your hiring to some faceless consultant halfway across the world. You want control. You want speed. And you want it all without tripping over local tax law.
This is where an Employer of Record (EOR) gets interesting.
Simplifies compliance without the headache
An EOR becomes the legal employer, taking over all payroll tax obligations: personal income tax, social contributions, unemployment insurance, and mandatory health coverage. You still manage your team, but the EOR handles the calculations, deductions, filings, and remittances every month. No missed deadlines, no miscalculations, no fines.
Skip the entity setup
Opening a legal entity in Kazakhstan is slow, expensive, and full of bureaucracy. With an EOR, you can hire legally without establishing a local entity, meaning your team can start this month, not in six.
Local expertise, payroll tech, and risk mitigation
EORs combine Kazakh legal know-how with advanced payroll systems:
Accurate deductions and contributions every month
Electronic filings through official SRC portals
Continuous updates for regulatory changes and contribution caps
Audit-ready documentation for both employees and authorities
It’s like having a local HR and payroll team in your back pocket, without the overhead. For details on pricing and service structures, see our EOR Cost Guide (EOR-05).
Why this actually matters
Using an EOR isn’t just about legal compliance in Kazakhstan; it’s about getting your hires fast, keeping them happy, and staying legally safe.
You reduce risk, avoid bureaucracy, and turn payroll from a stress point into a non-issue.
Think of it as speed + safety + expertise in one package.
And in a market where mistakes can cost tens of thousands of KZT (or more), that’s exactly the kind of ROI every founder and HR leader wants.
Conclusion
Hiring in Kazakhstan comes with more than just paperwork—it’s navigating tax laws, social contributions, and monthly filings that can trip up even the savviest foreign company.
Getting it wrong isn’t just inconvenient; it can mean fines, audits, and back-pay obligations. That’s why trusting an Employer of Record (EOR) matters.
An EOR becomes the legal employer, taking responsibility for payroll tax calculations, withholding, remittance, and reporting. This ensures every employee is compliant with Kazakh labor law, while you stay focused on building and managing your team.
Partnering with an established EOR provider means your international hires are onboarded legally, efficiently, and without the administrative headache. You get speed, compliance, and local expertise, all in one package.
Frequently asked questions
How are payroll tax expenses recorded in Kazakhstan?
In Kazakhstan, payroll taxes include personal income tax (PIT), social tax, and mandatory pension and insurance contributions.
These are recorded as part of total employment costs. When using an Employer of Record (EOR), these payments are included in a single monthly invoice, covering salary, taxes, and compliance, making it simple for your accounting team.
What payroll taxes do employers pay in Kazakhstan?
Employers in Kazakhstan typically contribute the following on top of gross salary:
Social Tax: 9.5% of gross pay
Social Medical Insurance (SMI): 3%
Mandatory Pension Contribution (Employer share): 5%
Employer Liability Insurance: 0.5% These contributions fund the national healthcare, pension, and social insurance systems.
What payroll taxes do employees pay in Kazakhstan?
Employees contribute:
Personal Income Tax (PIT): 10% of gross income (after deductions)
Mandatory Pension Contribution: 10% of gross salary
Social Health Insurance: 2% of gross salary The EOR withholds and remits these amounts directly to Kazakhstan’s tax authorities each month.
What is the difference between an Employer of Record and a direct employer in Kazakhstan?
A direct employer must set up a local legal entity, handle payroll, file taxes, and comply with labor laws. An EOR becomes the legal employer in Kazakhstan on your behalf. They manage employment contracts, payroll, and compliance—allowing your company to operate legally without a local subsidiary.
Do employers pay state or regional payroll taxes in Kazakhstan?
No, payroll taxes in Kazakhstan are managed at the national level. There are no separate state or municipal payroll taxes.
Which payroll taxes must an EOR withhold in Kazakhstan?
An EOR withholds and remits:
Personal income tax (10%)
Employee pension and insurance contributions (12% total)
Employer’s social tax and insurance (around 18%) All filings are done through Kazakhstan’s unified e-government portal in compliance with local regulations.
How does an EOR calculate employer contributions in Kazakhstan?
Employer contributions are calculated as fixed percentages of each employee’s gross salary. The EOR automatically applies the correct rates for:
Social tax (9.5%)
Pension fund (5%)
Medical insurance (3%)
Liability insurance (0.5%). These are based on the most current Kazakhstani tax laws.
What payroll reporting deadlines must an EOR meet in Kazakhstan?
Payroll taxes and social contributions are due monthly, generally by the 25th of the following month. The EOR handles all filings and payments to ensure compliance and avoid penalties.
Do EORs handle pension and social contributions for employees in Kazakhstan?
Yes. A compliant EOR in Kazakhstan manages all pension, medical, and social insurance contributions, ensuring employees are fully covered under the national social protection system.
How does using an EOR affect employee tax residency in Kazakhstan?
Employee tax residency in Kazakhstan is determined by physical presence—183 days or more in a calendar year. Using an EOR does not change residency status but ensures that taxes and withholdings are processed correctly under local tax rules.
What are the advantages of using an Employer of Record in Kazakhstan for payroll compliance?
Working with an EOR in Kazakhstan offers:
Full compliance with tax and labor laws
Elimination of permanent establishment risk
Streamlined payroll and reporting
Access to compliant employment contracts
No need for a local legal entity
