Kazakhstan’s new Tax Code took effect on 1 January 2026, bringing the biggest changes to salary taxes in years. If you employ people in Kazakhstan, or are planning to hire there, these changes affect how much your employees take home, how much you pay as an employer and how payroll must be calculated. Here is a clear summary of what changed and what employers should do.
- Key payroll changes at a glance
- Personal income tax: from flat 10% to progressive rates
- New basic deduction and cancelled benefits
- Social tax and employer contributions
- Health insurance caps and VAT
- A practical checklist for employers
Key payroll changes at a glance
| Item | Before 2026 | From 2026 |
|---|---|---|
| Personal income tax | Flat 10% | 10% up to 8,500 MCI per year, 15% above |
| Standard / basic deduction | 14 MCI per month | 30 MCI per month (KZT 129,750) |
| Social tax | 11%, reduced by social contributions | 6%, no reduction |
| Employer pension contribution (OPVR) | 2.5% | 3.5% |
| VAT | 12% | 16% |
Key indicators for 2026: the Monthly Calculation Index (MCI/MRP) is KZT 4,325 and the minimum monthly wage stays at KZT 85,000.
Personal income tax: from flat 10% to progressive rates
For years Kazakhstan was known for its flat 10% income tax. From 2026, individual income tax is progressive:
- 10% on annual income up to 8,500 MCI (about KZT 36.8 million per year, or roughly KZT 3.06 million per month)
- 15% only on the part of income above that threshold
Most employees earn well below the threshold and will still pay 10%. The change mainly affects senior managers, top specialists and executives. If you agreed to a fixed net salary with a high earner, your gross cost will rise.
New basic deduction and cancelled benefits
The previous standard deduction of 14 MCI has been replaced by a larger basic deduction of 30 MCI per month (360 MCI per year). This lowers the taxable income for most employees, especially those on lower and middle salaries.
At the same time, the new code cancels many individual deductions that are not listed in it. It also removes the rule that let employees earning less than 25 MCI reduce their taxable income by 90%. Mandatory pension, health insurance and similar social payments are now grouped into a single deduction category.
Social tax and employer contributions
The social tax rate fell from 11% to 6%. Previously, employers could subtract social contributions from the social tax they owed. That offset no longer exists. Employers now pay:
- Social tax: 6%
- Social contributions (SO): 5%
- Employer pension contribution (OPVR): 3.5%, up from 2.5%
- Employer health insurance (OOSMS): 3%
Overall, employer costs for a typical salary are now around 17% on top of gross pay. For a worked example, see our guide to the cost of hiring an employee in Kazakhstan.
Higher health insurance caps
The maximum salary base for mandatory social health insurance has increased significantly. For the employer’s 3% contribution it is now 40 minimum wages (KZT 3.4 million), and for the employee’s 2% contribution it is 20 minimum wages (KZT 1.7 million). Both were previously 10 minimum wages, so contributions for higher-paid staff will rise.
VAT increase to 16%
VAT is not a payroll tax, but the increase from 12% to 16% affects companies that buy services in Kazakhstan, including outsourced HR, recruitment and payroll services. Factor this into your 2026 budget.
A practical checklist for employers
- Update payroll software and formulas for progressive income tax, the new deduction and the new contribution rates and caps.
- Review employment contracts, especially those that promise a fixed net salary.
- Re-calculate your 2026 staff budget, including higher pension and health insurance costs.
- Explain the changes to employees so they understand why their payslip looks different.
- Check reporting forms and deadlines, as declaration formats have been updated under the new code.
- Consider outsourcing payroll if you do not have a local tax team that keeps up with changes.
Frequently asked questions
Q: Is income tax in Kazakhstan still 10%?
A: For most employees, yes. The 15% rate applies only to annual income above 8,500 MCI.
Q: Did employer costs go up or down in 2026?
A: The social tax rate went down, but it can no longer be offset, and the employer pension contribution and health insurance caps went up. For many employers, total costs are similar or slightly higher.
Q: Do these changes apply if I hire through an Employer of Record?
A: Yes. The same rules apply, but the EOR updates calculations and filings for you.
Stay compliant with NNRoad
Tax changes are one of the main reasons companies outsource payroll. NNRoad’s Employer of Record and payroll outsourcing services in Kazakhstan apply the latest rules to every payslip, so you don’t have to track every update yourself. Contact us at [email protected] to review your current setup.
This article is for general information only and does not constitute legal or tax advice. Details of the new Tax Code may be clarified by further regulations, so confirm specific cases with a qualified adviser.