Kazakhstan's wage tax burden nears 40%—and could climb higher by 2028
Kazakhstan’s tax burden on wages is climbing steadily and could surpass 41% by 2028. Recent reforms, including new pension and health insurance contributions, have pushed the total tax load close to 40% already. Experts now argue that the system needs a full review to address growing pressures on workers and businesses. In the mid-1990s, Kazakhstan operated with a progressive income tax system, ranging from 5% to 40%. A 30% social tax was also in place at the time. By 1998, mandatory pension contributions of 10% were introduced for employees.
A major shift came in 2007 when the country adopted a flat 10% personal income tax rate. Further changes followed in 2017 with the launch of a mandatory health insurance system, funded by employer contributions. Then, in 2020, employees were required to contribute to the Social Health Insurance Fund (SHIF). This year, another layer was added: mandatory employer pension contributions, starting at 1.5%. These will rise gradually to 5% by 2028. Despite these reforms, millions of Kazakhs still operate outside the formal economy, often for financial or administrative reasons.
The combined effect of these tax measures has driven the total burden on wages to nearly 40%. Without changes, it is set to exceed 41% within four years. Authorities now face calls to restructure the system to ease the strain on both workers and businesses.
