Hiring, payroll and HR administration in Uzbekistan

HR errors in the Republic of Uzbekistan cost more than accounting errors: they touch every employee and surface for the whole period at once. HR records are inspected separately from tax filings, and they are harder to reconstruct after the fact than accounting registers.

Employment is governed by the Labour Code of the Republic of Uzbekistan, approved by Law No. ZRU-798 of 28.10.2022 and in force since 30 April 2023. The Code has been amended almost every year, so the version applicable on your date is checked on lex.uz.

Employment contract or civil law contract?

An employment contract covers ongoing work in a position, with the employee subject to internal working rules. A civil law contract covers a defined result: a one-off task, a volume of work, or a service accepted by an act.

Substituting one for the other does not work. Where a contractor follows a schedule, works on the company's premises and performs a function rather than delivering a discrete result, the relationship is reclassified as employment, with personal income tax, social tax and late payment interest assessed for the whole period.

For a resident of the Technological Park of Software and Information Technologies (IT Park) the substitution is also economically pointless: the reduced 7.5% personal income tax applies to pay under employment contracts — see the IT Park cluster.

Which documents are required when hiring?

The HR package is assembled before the employee actually starts work, not afterwards. Not every document can be reconstructed later, and some lose evidential value when it is.

• A written employment contract stating the position, place of work, pay terms and working time arrangements.
• A hiring order and entry of the hiring details into the Unified National Labour System — an employer obligation under the Labour Code of the Republic of Uzbekistan.
• A job description, where the functions are not set out in the contract.
• Internal labour regulations and a pay policy as local acts.
• A working time record sheet, kept regardless of where the work is performed.
• A leave schedule and orders for HR events: transfer, leave, dismissal.

Local acts adopted by an employer must not worsen the employee's position compared with the collective agreement or with legislation. A clause of an employment contract that contradicts the Labour Code does not apply, even if the employee signed it.

How is payroll calculated and taxed?

Pay for an employee who has met the established work norms cannot fall below the minimum wage. The minimum wage and the base calculation value (BRV) are set by presidential decree and revised, so their values are taken as at the calculation date.

Employee pay is subject to personal income tax at 12%, withheld by the employer, and social tax at 12% for non-budget employers, charged on top of the salary. Mandatory contributions to employees' individual funded pension accounts are calculated in addition.

The full list of forms and dates is in the reporting calendar; rates and regimes are covered in the taxes cluster.

How do you hire a foreign employee?

Hiring a foreign national in the Republic of Uzbekistan requires two documents: a permit for the employer to engage foreign labour, and a confirmation of the right to work for the employee. Working without that confirmation is prohibited.

The fee for issuing the confirmation is differentiated by category: 1 BRV for highly qualified foreign specialists, 2 BRV for qualified specialists and for compatriots, 5 BRV for foreign doctors, and 30 BRV for other foreign nationals.

Some categories are exempt from the permit procedure. Foreign nationals who have invested at least 8,500 times the base calculation value in the Republic of Uzbekistan by acquiring shares or participatory interests in business entities, or by creating a foreign enterprise, may work in that organisation in any position without permit formalities; holders of a residence permit are also exempt.

The permit documents are obtained before the employment contract is signed and before work begins. The same applies to a foreign director: they are an employee of the company even when they are also its founder — see the company registration cluster.

What do inspections find most often?

HR inspections are separate from tax audits and rely on formal criteria. A missing document is a breach in itself, regardless of whether any employee was harmed.

• The employment contract is not registered in the Unified National Labour System. The duty is set out directly in the Labour Code of the Republic of Uzbekistan.
• The employee started work before the contract was signed. The relationship exists, the paperwork does not, and the period worked has to be proved indirectly.
• No working time records for remote staff. There is no basis for the payroll calculation and no defence in a labour dispute.
• Local acts contradict the Labour Code. The clauses do not apply and the company answers for adopting them.
• Pay below the minimum wage where the work norm was met. The breach is found arithmetically and applies to every affected period.
• A foreign employee working without confirmation. Liability arises for the employer and for the employee.

What comes next

HR administration is cheaper to set up once, when the first employee is hired, than to reconstruct before an inspection. The minimum set is a contract, an order, registration in the national system, a time record sheet and local acts on pay.

TheBux runs payroll and HR administration, including onboarding foreign employees — the scope is set out on the service page.