How to Hire Remote Employees In 

Afghanistan

The Basics

Currency
Afghan afghani (AFN)
Employer Taxes
20%
Payroll Frequency
Monthly
Official Language
Pashto and Persian

Employment in 

Afghanistan

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

Afghanistan

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Afghanistan can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Afghanistan, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Afghanistan.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Afghanistan is not the same as paying workers in your own country. Employees have to be paid using Afghanistan’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Afghanistan

 Specific Information

Working Hours

A lawful working period is 40 hours per week and most employees work eight hours per day.

Employers may adjust an employee’s hours as needed, so long as their working period balances to only 40 hours each week. Under special circumstances, employers must cap the workweek earlier.

Pregnant women and youths aged 15 to 18 may work only 35 hours per week.

Employees who perform work in dangerous conditions may work just 30 hours each week.

Employees should receive a one-hour lunch break, which does not qualify as part of their working time.

Overtime

Employees who perform night work or work in dangerous conditions must not work overtime.

Pregnant women and women with children younger than two years of age are also ineligible.

Payroll Tax

Employer

Employer

  • Pensions
  • Labor

Minimum Wage

Minimum wage rate is 5,500 Afghani per month for government workers with no minimum set for for private sector workers,but labor law forbids a lower wage. on-permanent private sector AFN5,500, Permanent government workers AFN6,000.

Payroll

Pay Cycle

The employees in Afghanistan receives their salary monthly.

13th Salary

No info.

Leave

Paid Time Off (PTO)

Employees receive one day of paid leave for every 18 days of work after a year of service if they work in a commercial establishment, factory, shop or transport.

If they work for a newspaper, they receive one day of vacation for every 11 days worked.

Public Holidays

Afghanistan observes both national and religious holidays. Employees are entitled to paid leave on the following days:

  • Friday (the last day of the week)
  • Nawruz (the first day of the new year)
  • The 28 of Assad/July 19 (the day of restoration and independence)
  • The Eighth of Sawr (the Victory of the Islamic Revolution of Afghanistan)
  • The first day of Ramadan
  • Three days for Eid-e-Feter
  • Three days for Eid-e-Said-e-Adah and one day for Arafat
  • The 12 of Rabiul Awal (Hazrat-e-Mohammad’s birthday)
  • The 10 of Muharam/the Day of Ashura
  • The 26 of Dalwe (the return of former Soviet forces)
  • Other days the Republic announces as public holidays

Sick Days

Employees are entitled to 20 days of paid sick per year.

If a worker needs to utilize three days or fewer, they may send a written notice. For longer leave, the employee must provide a certificate from the health institute’s medical doctor. In areas without access to physicians, certificates from the village headman or Province are valid.

Employees covered by a medical insurance plan may use the certificate from the doctor at the insurance company.

If a worker needs to use more than 20 days of sick leave, they may use other leave for this purpose. In some cases, employees can receive additional sick leave.

New employees who start work in the first half of the year may use the full 20 days of sick leave. Workers who join in the second half are entitled to 10 days.

Maternity Leave

Female employees are entitled to take 90 days of paid maternity leave.

This leave should begin 30 days before delivery and extend 60 days past the date of the birth.

At the end of the maternity leave, the employee must report to work. In the case of abnormal delivery or multiple births, she is entitled to take an extra 15 days of maternity leave.

To qualify for this supplemental leave, she will have to provide relevant certificates from the hospital.

Paternity Leave

There is no statutory paternity leave.

Parental Leave

No Info.

Other Leave

No Info.

Marriage Leave

No Info.

Bereavement Leave

No Info.

Termination

Termination Process

If an employee has unused recreational leave at the time of their contract’s expiration, they are entitled to their wages for that leave.

As to termination by an employee, the Labor Law gives an employee the right to terminate the employment contract with or without prior notice if the employer is in breach of their employment contract, or if the employee becomes physically disabled and therefore unable to carry out his or her job.

Employers may terminate an employment contract after 20 days of consecutive absences not covered by leave.

Repeated infringement of labor discipline rules is also lawful grounds for termination. Under these circumstances, an employee is not eligible for severance.

Notice Period

Employer is required to provide one month’s notice in the event of termination of fixed-term contracts, and two months’ notice for open-ended contracts.

During probation, any party may terminate the contract with immediate effect.

Severance Pay

Severance pay is mandatory when an employment contract is terminated due to cessation of work, reduction of workforce, imprisonment of the employee or his refusal to be assigned to his previous job, which is payable depending on the duration of service, as follows:

  • one gross salary when the duration of service is up to one year;
  • two gross salaries when the duration of service is from one to five years;
  • three gross salaries when the duration of service is five to ten years; and
  • four gross salaries when the duration of service is more than ten years.

Probation Period

Probationary period of 3 months or less.