AZE.US
Azerbaijani legislation generally requires employers to pay salaries through non-cash transactions, but the law allows several exceptions in which wages may still be paid in cash.
Under the provisions of the Tax Code of Azerbaijan, employers who violate the rules on cashless payments and pay salaries in cash without legal grounds can face financial penalties.
The size of the fine depends on the number of violations within a calendar year. For the first violation, the penalty amounts to 10% of the transaction value, rising to 20% for the second violation and 40% for three or more violations.
When cash payments are allowed
At the same time, the law provides exceptions. According to the Law of Azerbaijan On Cashless Payments, certain small businesses are permitted to pay wages in cash.
This applies primarily to taxpayers engaged in retail trade, services or public catering whose annual turnover does not exceed 300,000 manats. These businesses may pay employee salaries either in cash or through bank transfers.
Larger businesses must pay electronically
Companies whose annual turnover exceeds 300,000 manats, as well as businesses involved in wholesale trade, are required to pay salaries exclusively through non-cash transactions.
Experts say the rule is intended to increase financial transparency and reduce the shadow economy by ensuring that wage payments pass through the banking system.
Documentation still required
Even when cash payments are permitted, employers must properly document the payments. Payroll sheets must be prepared and employees are required to confirm receipt of wages with their signatures.
In addition, mandatory social insurance contributions deducted from salaries must always be transferred through bank accounts to the relevant state funds.
Authorities say compliance with these requirements helps employers avoid penalties and ensures transparency in labor relations.