INCOME RECEIVED AFTER DISMISSAL: HOW ARE TAXES AND MANDATORY PAYMENTS CALCULATED?

Termination of an employment contract does not release an employer from the obligation to calculate taxes and mandatory payments on income paid to a former employee in connection with previously existing employment relations.

According to paragraph 1 of Article 372 of the Tax Code of the Republic of Kazakhstan, an employee’s taxable income includes income received or receivable from an employer in the form of remuneration for work and other material benefits.

Pursuant to paragraph 3 of the same Article, payments made to an employee after dismissal are also considered employee income if they arise from grounds related to the former employment relationship and are made in accordance with the legislation of the Republic of Kazakhstan.

What taxes and mandatory payments are calculated on such income?

🔹 Individual Income Tax (IIT) — calculated in accordance with Articles 362–363 of the Tax Code, taking into account applicable tax deductions.

🔹 Social Tax — calculated in accordance with Articles 556–557 of the Tax Code.

🔹 Mandatory Pension Contributions (MPC), Employer’s Mandatory Pension Contributions (EMPC), and Social Contributions — calculated in accordance with the procedure established by the Social Code of the Republic of Kazakhstan.

Thus, income paid after dismissal on grounds related to employment relations is subject to taxation in accordance with the procedure established by law, taking into account the specific rules applicable to each tax and mandatory payment.