Employer of Record & PEO Services in Afghanistan

Expanding your workforce in Afghanistan requires a thorough understanding of the local hiring landscape. e-square Afghanistan Employer of Record (EOR) and Professional Employer Organization (PEO) services streamline the hiring process, ensuring compliance with Afghan labor regulations. We facilitate talent acquisition, from recruitment to onboarding in 20+ Countries, making it easier for you to attract and integrate top talent into your organization.

As remote work gains prominence, our services support your ability to employ remote workers in Afghanistan while ensuring to local employment laws and tax requirements. This flexibility allows you to tap into a broader talent pool across the country, enhancing your organizational capabilities.

All employment agreements must be in writing. The fixed-term contract, which is concluded for a defined period of one year and renewable with the parties' consent, is the most typical employment agreement in Afghanistan. A contract is deemed to have an indefinite duration if it lasts longer than that time frame.

Comprehending and complying with Afghanistan's labor laws is essential for maintaining a legally sound workforce. e-square experts provide invaluable guidance on employment standards, workers' rights and workplace regulations, ensuring that your operations align with the Afghan legal framework.

The Afghanistan minimum wage rate is AFN 6,000 Afghani per month for government workers with AFN 5,500 minimum set for private sector workers.

The maximum working hours per day is 8 hours and employees are entitled to a one hour for lunch break and prayers for Muslim, which is not included in such work hours.

Navigating Afghanistan's complex tax system can be challenging. We handle all aspects of payroll, including tax deductions, contributions and timely tax payments. By entrusting us with your employment tax responsibilities, you can be confident that your obligations in Afghanistan are met accurately and in compliance with local tax laws.

Corporate Tax Rate in Afghanistan remained unchanged at 20 % in 2023.

As of last updated on September 2023, Average Personal Income Tax rate in Afghanistan remained unchanged at 20 Percent in 2023.

The tax law also added a 2 percent tax.

Afghanistan has four Tax brackets, the employee income tax rates for Resident natural persons is calculated as below:

• For the First tax bracket 0 – AFN 6,000 of chargeable income Tax: 0 %
• For the Second tax bracket AFN 6,000 – AFN 15,000: 2 % Amount Over 6000
• For the Third tax bracket AFN 15,000 – AFN 120,000: 180 + 10 % Amount Over 15,000
• Above AFN 120,000: 10,680 + 20 % Amount Over 120,000

Revenue Department (ARD) of Afghanistan has introduced its new VAT with effect from 22 December 2021.

The VAT rate is 10%.

While health insurance is not mandatory in Afghanistan, offering health insurance benefits can be a valuable incentive for your employees. We assist you in providing health insurance benefits, promoting employee well-being.

Afghan female employees are entitled to 90 days of paid maternity leave. Leaves are approved for 30 days prior a child birth and the remaining 60 days after delivery.

An employee is entitled to 20 days of paid sick leave per year in addition to other benefits.

The employees are entitled to 20 days of paid Vacation leave per year.

The following severance payments must be made by the employer, based on the length of employment, when an employee is terminated due to discontinuation of work, decrease in staff or unwillingness to work.

One month salary plus benefits for employment of less than a year;

Two months' salary plus benefits for employment of one to five years;

Four months' salary plus benefits for employment of five to ten years;

and six months' salary plus benefits for employment of more than ten years.

Terminating an employee in Afghanistan must adhere to specific legal procedures. An employer must give one month notice period to employee, If a fixed-term contract is terminated, If an open-ended contract is terminated, the employer must give two months’ notice.

Our comprehensive compensation and benefits solutions are tailored to your specific business needs. From structuring competitive salaries to designing retirement plans and employee benefit programs, we help you create attractive compensation packages that not only attract top talent but also retain and motivate your workforce in Afghanistan.