According to the Law of the Republic of Azerbaijan “On Health Insurance,” from January 1, 2021, mandatory health insurance premiums will be collected from employees in the public sectors, as well as the private and non-oil sectors, and natural people providing work (services) under civil and legal contracts, and individuals engaged in entrepreneurial activity.
Thus, employers and employees in the public and oil sectors will be charged 2% of the monthly wage bill up to 8,000 manat and 0.5% of the part of the monthly wage bill over 8,000 manat.
For example:
By the employer -
1. The employer has set a monthly salary of 500 AZN for the employee. This means that the employer will pay a mandatory health insurance premium of 2% of this amount, i.e., 10 AZN monthly (500 * 2% = 10) for the employee.
2. The employer has set a monthly salary of 8,500 AZN for the employee. In this case, 2% of 8000₼ – i.e., 160₼ (8000 * 2% = 160) – and 0.5% of the remaining 500₼ – i.e., 2.5₼ (500 * 0.5% = 2.5) – will be charged as a mandatory health insurance premium. As a result, the employer will pay a monthly mandatory health insurance premium of 162.5 AZN for the employee.
By the employee -
1. The employee's monthly salary (including wage bonuses, salary increment, etc.) is 500₼. In this case, 2% of his salary – i.e., 10 AZN (500 * 2% = 10) – will be deducted as a monthly mandatory health insurance premium.
2. The employee's monthly salary (including wage bonuses, salary increment, etc.) is 8,500₼. In this case, 2% of 8000₼ – i.e., 160₼ (8000 * 2% = 160) – and 0.5% of the remaining 500₼ – i.e., 2.5₼ (500 * 0.5% = 2.5) – will be charged as a mandatory health insurance premium. As a result, 162.5 AZN will be deducted from the employee's salary as a monthly mandatory health insurance premium.
Taking into account that, until January 1, 2022, a 50% discount is applied to the amount of insurance premium paid from a part of monthly wage bill up to 8,000 manat for employers and employees in the non-public and non-oil sectors; these employers and employees will be charged 1% of the part of the monthly wage bill up to 8,000 manat and 0.5% of the part of the monthly wage bill over 8,000 manat as a mandatory health insurance premium. From 2022, employers and employees in these sectors will be charged 2% of the monthly salary fund (wage bill), up to 8,000 manat.
For example:
By the employer -
1. The employer has set a monthly salary of 700 AZN for the employee. That is, the employer will pay 1% of that amount, which will be the monthly 7₼ (700 * 1% = 7) mandatory health insurance premium for the employee.
2. The employer has set a monthly salary of 8,500 AZN for the employee. In this case, 1% of 8000₼ – i.e., 80₼ (8000 * 1% = 80) – and 0.5% of the remaining 500₼ – i.e., 2.5₼ (500 * 0.5% = 2.5) – will be charged as mandatory health insurance. As a result, the employer will pay a monthly mandatory health insurance fee of 82.5 AZN for the employee.
By the employee -
1. The employee's monthly salary (including wage bonuses, salary increment, etc.) is 700₼. In this case, 1% of his salary – i.e., 7 AZN (700 * 1% = 7) – will be deducted as monthly mandatory health insurance.
2. The employee's monthly salary is 8,500 AZN. In this case, 1% of 8000₼ – i.e., 80₼ (8000 * 1% = 80) – and 0.5% of the remaining 500₼ – i.e., 2.5₼ (500 * 0.5% = 2.5) – will be calculated as a mandatory health insurance premium. As a result, a monthly mandatory health insurance fee of 82.5 AZN will be deducted from the employee's salary.
The mandatory health insurance premium is fixed at 2% of the monthly income up to 8,000 manat and 1% of the monthly income over 8,000 manat for natural people providing work (services) under civil-legal contracts.
For example:
1. A person earns 500₼ per month. In this case, he will pay 2% of his income – i.e., 10₼ (500 * 2% = 10) – as a monthly mandatory health insurance.
2. A person earns 8,500 AZN per month. In this case, 2% of 8000₼ – i.e., 160₼ (8000 * 2% = 160) – and 1% of the remaining 500₼ – i.e., 5₼ (500 * 1% = 5) – is calculated as the mandatory health insurance fee. As a result, a person must pay a monthly mandatory health insurance fee of 165 AZN.
A mandatory health insurance premium of 4% of the minimum monthly salary is set for natural people (individual entrepreneurs, private notaries, members of the bar) registered as taxpayers under the Tax Code, except in cases of temporary suspension of entrepreneurial activity or other taxable operations.
For example:
At present, the minimum monthly wage in the country is 250 AZN. Individuals engaged in entrepreneurial activity must pay 4% of this amount – i.e., 10 AZN (250 * 4% = 10) – as a monthly mandatory health insurance premium.
Citizens can calculate the amount of mandatory health insurance premiums deducted from their salaries or incomes using a calculator posted on the official website of the State Agency on Mandatory Health Insurance.
