Starting January 1, 2025, workers under civil contracts in Kazakhstan will have equal rights with full-time employees.

Amendments to the Social Code of the Republic of Kazakhstan were introduced at the end of 2022, but they will only come into effect at the beginning of 2025, reports inbusiness.kz.

The positive changes will affect the majority of working Kazakhstanis, as at one point employers began to transition their employees to civil law contracts (GPH) instead of traditional employment agreements. The government's first step to protect workers' rights was the mandatory transfer of pension contributions by employers to the Unified National Pension Fund (ENPF). The second step took longer to arrive, but changes will take effect on the first day of the new year.

Why it is important to make social contributions to the GFSS

Social protection in Kazakhstan is funded through payments from the republican budget and from the GFSS. Budget funds are allocated for special benefits to citizens of the country who find themselves in difficult circumstances and/or have lost their health or breadwinner. Funds from the GFSS are intended for all able-bodied Kazakhstanis for whom monthly social contributions have been made by employers. This is why workers under GPH contracts could not claim payments for sick leaves due to pregnancy and childbirth, unemployment benefits, and all other payments that are legally provided from the GFSS.

When calculating the amount of benefits, the number of months that the worker participated in the GFSS system is of significant importance. For instance, if an employer missed payment deadlines and only contributed for 8 months instead of the required 12 months, the GFSS will base its calculations on those 8 months.

Which GPH contracts are subject to the Social Code of the Republic of Kazakhstan

The categories of individuals covered by the code are described in Article 243:

"… 4) individuals receiving income under contracts of a civil law nature concluded with tax agents in accordance with the legislation of the Republic of Kazakhstan, the subject of which is the performance of work (provision of services), including those working in the representations of international organizations in the Republic of Kazakhstan, diplomatic representations, and consular institutions of foreign states accredited in the Republic of Kazakhstan (hereinafter – individuals receiving income under civil law contracts)."

Amount of social contributions starting January 1, 2025

Another change regarding social contributions. If the government does not issue a special resolution and does not suspend the operation of this norm, then starting January 1, 2025, the amount of social contributions will increase from 3.5% to 5% of the income accrued to the employee. This is a general rule for all categories of workers, including individual entrepreneurs, farmers, notaries, and so on.

"The object of calculation for social contributions for individuals specified in subparagraph 4) of Article 243 of this code is the amount of income received under the civil law contract, the subject of which is the performance of work (provision of services)…" (Article 245 of the Social Code of the Republic of Kazakhstan).