Hire and pay employees in
Mongolia, hassle-free

In Mongolia the individual income tax ranges from 10% to 20%. A non-resident taxpayer of Mongolia is subject to a flat tax rate of 20% on income earned in or sourced from Mongolia. 

Income tax is calculated according to progressive rates:

Standard working hours are 8  hours per day, 40 hours per week . The standard work week is from Monday to Friday.

Overtime payment is mandatory. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 4  hours of overtime per day and 56 hours per week. For additional hours, employees are paid:

• 150% of the hourly rate  for work days and weekends
• 200% of the hourly rate for public holidays

• First 5 days: the employer will pay 100% of the base salary
• The remaining approved days, Social Insurance will pay 50-75% of the base salary. 

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Mongolia can be complex. There is no at-will termination in Mongolia for outside the probation period and termination must be done for just cause or mutual agreement.

• Compliant terminations may occur through the following means:
• Voluntary resignation by the employee
• Mutual agreement between the parties
• Unilateral termination by the employer based on:
• Probation period evaluation
• Objective grounds
• Disciplinary reasons
• Unsuitability for the job performance
• Expiration of the employment contract

• the employee has been called to active duty;
• the employer's organization has been dissolved, or;
• the job or position within it has been discontinued;
• the employee fails to meet the job description due to qualifications or health reasons; 
• the employee reached 60 years of age and is eligible to receive a pension.

If the employee is terminated with one of those reasons and has been for more than 6 months with the company they will be entitled to a minimum of one month base compensation.

Employees terminated during the probation period are not entitled to severance pay.  

Full-time employees are entitled to 15 working days of paid time off (PTO) per year, accruing at a rate of 1.25 days per month. Part-time employees are entitled to a prorated calculation based on their working hours. However, it is common practice to grant a minimum of 10 days. Employees become eligible for annual leave after 6 months from the employment start date.

The employee will be entitled to additional time off based on their tenure:

• From their 6th year of employment: 3 additional days
• From their 11th year of employment: 5 additional days
• From their 21st year of employment: 7 additional days
• Over 21 years: 9 additional days, up to 14 days.

Mongolia  celebrates 9 national holidays that can last up to 16 days. National public holidays include:

• New Year’s Day
• Tsagaan Sar
• International Women’s Day
• Buddha Day
• Mother’s and Children’s Day
• Naadam
• Genghis Khan’s Birthday
• Republic Day
• Independence Day

Onboarding takes 5 business days after the SOW signature.

The employee is required to provide all compliance documents to enable them to sign the contract and be registered with Social Insurance.

Contracts must be in English and can be bilingual. They must be in writing and signed by both parties.

A contract must include:

• name
• start date
• length of the employment
• job description
• termination conditions
• payment terms