Employment Law

Employment Contract in Mongolia

When hiring employees in Mongolia, employers are legally required to provide a written labor contract. These contracts should always include any details related to the employment, such as salary/wage information, expected responsibilities and working hours, and should be written in Mongolian, using the Mongolian Tugrik (or simply Tugrik) as the local currency.

Fixed Term

Indefinite

Mongolian Working Hours

The standard working week for Mongolian employees is five days and 40 hours.

Holiday Policy

Mongolia Vacation

Employees in Mongolia are generally entitled to a basic allowance of 15 days, which increases with the employee's years of service. After six years of service, employees receive three additional days of paid vacation, and after 32 years of service, this number gradually increases to a maximum of 14 days.

Mongolian Sick Leave

Employees in Mongolia are generally entitled to unlimited sick leave if required.

Parental Leave in Mongolia

Female employees in Mongolia are entitled to four months (120 days) of paid maternity leave. Compensation during this period is at least 70% of regular salary.

Termination and Dismissal of Mongolia

Employers and employees in Mongolia are generally required to give notice of termination of an employment contract. The length of notice depends on the exact reason for termination, but is usually between 30 days and two months. In addition, employees are usually entitled to approximately 30 days of regular pay as severance pay when they are laid off.

Mongolian Taxes

Both employees and employers in Mongolia are required to pay social security contributions. Men and women are equal, pensions account for 7% of wages, unemployment insurance accounts for 0.2% of wages, and medical insurance accounts for 2% of wages. In addition, employees must pay a small premium for benefit insurance (up to 3%).

Income tax in Mongolia is progressive and therefore varies according to income level. For residents, the tax rate ranges from 10% to 40%. For non-residents, the flat rate is 20%.

Corporate tax in Mongolia ranges from 1% to 25% based on profits.

Health Insurance in Mongolia

Mongolia has a state-funded healthcare system, but many employers do offer private health insurance to employees, so this may form part of a benefits package.

Salary and Benefits

Mongolia’s Compensation Law

The mandatory minimum wage in Mongolia is MNT 420,000 per month (as of 2020).

Welfare Management in Mongolia

Employees in Mongolia often expect benefits packages to be part of their employment agreement, so you may want to set up a benefits management system when recruiting in the country. But setting up and managing a benefits system in Mongolia can be complex, especially if you're unfamiliar with the country's unique regulations and procedures.

Outsourcing your benefits administration processes can save you time and money and ensure you are fully compliant with relevant laws. Remoly can simplify your Mongolia benefits management, and our Mongolia experts will set up and manage everything for you, helping you focus on successfully expanding your business.