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Hire in Mongolia

Here’s where you get started with human resources best practices and hiring in Mongolia

Currency of Mongolia

Mongolian Tugrik (MNT)

The Capital of Mongolia

Ulaanbaatar

Time Zone in Mongolia

GMT+8

Important Facts About the Country of Mongolia

Legal System in Mongolia

The judiciary of Mongolia is comprised of a three-tiered court system: 1) instance courts in each provincial district and each Ulaanbaatar district, 2) appellate courts for each province and the Capital Ulaanbaatar and 3) the court of last resort (for non-constitutional matters) at the Supreme Court of Mongolia. A separate constitutional court exists for questions of constitutional law.

A Judicial General Council (JGC) nominates judges in Mongolia. These judges must then be confirmed by the parliament and appointed by the President.

Arbitration centers offer alternative dispute resolution options for commercial and other disputes.

Climate in Mongolia

Mongolia is a land of extremes in terms of climate. With over 260 sunny days a year, Mongolia is justifiably known as the ‘Land of Blue Sky.’ In Ulaanbaatar, the winter (December to March) is long and cold, with temperatures frequently plummeting to minus 30 degrees Celsius in January and February. Intense dust storms can be expected during the short spring (March to June). The summer (June to September) is pleasant without being too hot.

The Culture of Mongolia

From the oldest works of Mongolian literature to modern soft pop songs, Mongolia’s culture reflects love for parents, homesickness and a longing for the place where one grew up. Horses have always played an important role in daily life, as well as in the arts. Mongols have a lot of epic heroes from ancient times. Hospitality is so ubiquitous in the steppes of Mongolia that it is traditionally taken for granted.

The Mongolian word for hero (‘baatar’) appears frequently in personal names, even in the name of Mongolia’s capital Ulaanbaatar (‘Улаанбаатар’ or Ulan Bator). The word was introduced in the Middle Ages to many non-Mongolic languages by conquering Mongol-speaking nomads and now exists in different forms such as the Bulgarian language, Russian, Polish, Hungarian, Persian, North Indian and Georgian. Traditional words such as ‘temul’ represent a way to describe creativity and passion; This word was used in several Mongol words and has the meaning to “rush headlong.” That is, to be inspired or to have a sense of creative thought – and even to take a flight of fancy. From Mongolian perspective, it can be seen as “the look in the eye of a horse that is racing where it wants to go, no matter what the rider wants.”

Languages Spoken in Mongolia

The official language of Mongolia is Mongolian and is spoken by 95% of the population. A diversity of Oirat and Buryat dialects are spoken around the country. There are also some groups that speak Mongolic Khamnigan. In the western region of the country, Kazakh and Tuvan (both Turkic languages) are also spoken. Mongolian Sign Language is the principal language of Mongolia’s deaf community.

Mongolian Human Resources at a Glance

Employment Law Protections in Mongolia

Law on Labor of Mongolia (1999) (“Labor Law”) governs the rights and duties between employers and workers. Also referred to as labor law, these rules are primarily designed to keep workers safe and make sure they are treated fairly. However, laws are in place to protect employers’ interests as well. Employment laws are sourced in federal and state constitutions, legislation, administrative rules and court opinions. An employment relationship can also be governed by contract of employment, collective agreement or collective bargaining.

Employment Contracts in Mongolia

According to the Labor Law, an employer is required to conclude an employment agreement with an employee in writing. This must be provided within 10 days of the employment commencing.

The revised Labour Law that took effect in January 2022 distinguishes between the different types of employment agreements: apprenticeship, trainees, probationary, part-time, working from home, remote and special conditions (e.g. for executives).

Mongolia's Contract Terms

The following basic matters shall be provided for in a contract of employment:

  • name or title of the position of employment;
  • duties and work to be performed;
  • amount of compensation;
  • conditions in which work is to be performed.
  • location for performing the work and duties.

Employment agreements are for indefinite term except for the below cases:

  • apprenticeship and probationary work
  • seasonal work (one-time)
  • temporary employment e.g. replacing an employee who is on maternity/paternity leave

If a fixed-term contract lasts for more than two years, it will be considered to be an indefinite employment agreement.

Apprenticeship employment agreements are for three months and are extendable once for a further three months. Professional apprenticeship employment agreements can be up to two years with the option to extend once for no more than one year.

Traineeship agreements are for up to three years.

An employee may enter into several parallel labor contracts with several employers. It is the employee’s duty to inform the employer if there’s parallel work.

Termination

Unless otherwise provided in the law , an employee shall have the right to leave his or her workplace upon the expiration of 30 days after submitting his or her request of resignation with written notice to the employer, in which case the employment agreement shall be considered as terminated. An employment agreement may be terminated 30 days due to Mongolia LSA article 80 with the employer. (more details below)

Regulations and Rules Regarding Working Hours in Mongolia

The hours of work per week must not exceed 40 hours.

The length of a normal working day must not exceed eight hours.

Mongolia's Guidelines Regarding Probation Period/Trial Period

The maximum probation period is three months, with the possibility of extending once more for no more than a further three months.

Severance Pay in Mongolia

For termination due to the below reasons, severance payout depends on the employee’s length of service.

  • Termination of employment agreement due to ownership transfer of business
  • The organization or its business unit has been downsized
  • The employee cannot meet the requirements of the job, either professionally or due to a medical condition

The severance payout is as follows:

  • 6 months – 2 years: 1 month
  • 2 – 5 years: 2 months
  • 5 – 10 years: 3 months
  • >10 years: 4 months

This severance pay shall also be payable to an employee whose employment agreement is terminated because he or she has been called to active military service or has attained 60 years of age and has become eligible to receive a pension. In the case of a mass redundancy of employees, an employer shall agree the amount of the severance pay to be paid through negotiations with the representatives of employees.

Paid Leave

The basic annual leave entitlement is 15 days or 20 days if the employee is under 18 years of age. There may be additional leave days awarded based on the tenure of employment, ranging from three days to 14 days.

Mongolia's Requirements Regarding Notice Periods

Employers should give 30 days written notice.

Post-Termination Restraints

Non-compete restrictive covenants can be signed as a separate agreement to the employment contract, and must specify the reasons for prohibiting competition, type of activities covered, the geographical coverage, length of time and compensation amount. The compensation amount has to be at least 50% of the employee’s last drawn monthly salary.

The maximum length of non-compete covenants is one year after termination. They shall not apply if the employee works abroad. It is prohibited to impose non-compete covenants on minor workers or workers with probationary contracts or apprentices.

The non-compete restrictive covenant applies only to employees who are executives (i.e. not applicable for entry-level or mid-level employees), and may not apply for overseas employment.

Statutory Costs

SHI (Social Health Insurance) contribution is 12.5%% – 14.5% from the employer and 11.5% from the employee. The employee’s contribution is capped at MNT 6,600,000.

Social Insurance

An employer must provide social and health insurance for employees employed under a contract of employment. The employer must also withhold premium payments each month as required by law. The employer will open social and health insurance record books for each employee when the contract of employment is established and maintain records of monthly social, health insurance withholding and related fees. This must be done in accordance with all applicable regulations.

Participation is compulsory for all Mongolian citizens, foreigners and stateless persons employed within the territory of Mongolia.

Additional/Overtime Pay

  • The Weekly maximum of hours of work shall not exceed 56 hours. Daily overtime work shall not exceed 4 hours.
  • An employer shall have a duty to maintain a registry of the hours that employees worked.
  • If an employee works on a public holiday and is not given another day off from work for each such day, he or she shall receive compensation for such work at twice his or her average compensation.
  • If an employee works overtime on workdays and weekends and has not been given another rest day for each such day, he or she shall receive compensation for such work in an amount equal to at least 1.5 times his or her average compensation.
  • If an employee works during night hours and is not given equivalent periods of rest during normal business hours, he or she shall receive 1.2 times extra compensation in accordance with the provisions of the applicable collective and contract of employment.

Idle Time Compensation

  • If an employee, through no fault of his or her own, cannot be transferred to another job during a period of idle time with respect to the employer’s business, he or she will receive compensation in an amount specified in the applicable collective agreement.
  • The idle time compensation determined by the collective agreement must be equal to at least 60% of the employee’s basic compensation. This amount cannot be less than the minimum compensation payable for the job description.
  • If the idle time is caused by actions of the employee, he or she will not be entitled to receive any idle time compensation.
  • If, during idle time, the employee performs other work for the employer, he or she will be paid according to the work performed. In no event can such payment be less than his or her previous average compensation.

Tax and Social Security Information for Employers in Mongolia

Personal Income Tax in Mongolia

The employment income for resident taxpayers (i.e., those who stay more than 183 days in Mongolia in the tax year) is taxed at the following progressive rates:

Taxable income for the Tax year (MNT) Tax rate
0 – 120,000,000 10%
120,000,000 – 180,000,000 MNT 12,000,000 plus 15% on income exceeding MNT 120,000,000
> 180,000,000 MNT 21,000,000 plus 20% on income exceeding MNT 180,000,000

Income Tax: Employer requirements

Employers must deduct insurance from an employee’s monthly earnings and remit it to the social insurance authority on the employee’s behalf. The employer will prepare a monthly report (ND-7, 8) and submit it to the social insurance authority by the fifth day of the following month.

Quarterly/Yearly

  • Report for Withholding Tax Return for Wage, Salary other Comparable Income (TT-11);
  • Information for Withholding Tax Return for Wage, Salary Other Comparable Income (TT-11(1))

Employers must prepare and file withholding tax return TT-11, 11(1) to the tax authority on a quarterly and annual basis. April 20, July 30 and October 30 are the deadlines for the submission of the Quarterly Report and February 10 of the next year is the deadline for the Annual Report.

Reports and returns can be submitted by both parties, either the client or the payroll provider. It can be signed by the employer or a representative of the payroll provider based on previous authorization provided by the client.

Social Security

In Mongolia, the Social Security Rate is a tax related to labor income charged to both employers and employees. Revenues from the Social Security Rate are an important source of income for the government of Mongolia because they help to pay for many social programs including welfare, health care and many other benefits. The contribution rates are as follows:

Employers Contributions (%) Employees Contributions (Capped at MNT 420,000) (%)
Pension Insurance 8.5 8.5
Medical Insurance 2.0 2.0
Benefit Insurance 1.0 0.8
Industrial Accident and Occupational Disease Insurance (varies depending on industry) 0.8-2.8 0.0
Unemployment Insurance 0.2 0.2
TOTAL 12.5-14.5 11.5

*The above rates serve as a broad guideline. Actual rates charged will differ.

Benefits to the Employee in Mongolia

Salary Payment

Wages shall be paid at least 2 days a month and the dates of the payment should be stated in the employment agreement.

Payslip

Monthly payslips are to be made available on website, PDF or paper.

Annual Leave

An employee is entitled to 15 days of paid annual leave after six months of service. There are no restrictions on the number of days of partial leave, but one part shall be taken in a continuous stretch of 10 working days.

If employees are unable to take the annual leave due to urgent business, they should be paid a bonus of 1.5 times their base pay.

The length of the regular holiday for an employee under 18 years of age shall be 20 working days.

An employee due to his/her own request may enjoy their regular holiday in parts during the year concerned.

In addition to the basic period, employees working under normal working conditions shall be awarded additional leave days considering the length of their record of service and their working conditions as follows:

  • 6 – 10 years of work, 3 working days
  • 11 – 15 years of work, 5 working days
  • 16 – 20 years of work, 7 working days
  • 21 – 25 years of work, 9 working days
  • 26 – 31 years of work, 11 working days
  • 32+ years of work, 14 working days

In addition to the basic period, employees working under abnormal working conditions in accordance with the collective contract shall be awarded additional leave days considering the length of their record of service and their working conditions as follows:

  • 6 – 10 years of work, 5 working days and more
  • 11 – 15 years of work, 7 working days and more
  • 16 – 20 years of work, 9 working days and more
  • 21 – 25 years of work, 12 working days and more
  • 26 – 31 years of work, 15 working days and more
  • 32+ years of work, 18 working days and more

The additional regular holiday term for civil servants may be established by the appropriate law.

Sick Leave

If an employee contracts a normal disease or domestic injury – and is therefore rendered unable to perform their duties as determined by a competent medical authority – then they are entitled to paid sick leave for the duration of such a temporary disability.

Maternity & Parental Leave

Maternity leave

  • Maternity leave of 120 days shall be provided to the mother and 140 days for mothers who have given birth to twins.
  • If a woman has a stillborn child or has interrupted a pregnancy with hospital methodology before the 196th day of pregnancy, the general regulation on granting sick leave shall be applied, and such leave shall be granted.
  • An adopting father shall be entitled to equal leave as a mother who gives birth to a child until the child reaches 60 days old.
  • All the above shall apply equally to single fathers with a newborn child.

Child Care Leave

An Employer shall give the mother or father of a child under three years of age leave for child care if they so request, and the issue of payment of an allowance during the period of such leave shall be regulated by applicable legislation, collective contracts, collective agreements, employment contracts, and internal labor regulations.

An Employer shall have a duty to reinstate the employee back to his or her previous job at the end of child care leave or before that if the employee so requests. If the employee’s position was eliminated, the employee shall be given a job of a similar nature.

Termination - End of Service Payment

There are no specific provisions for resignation or requirements for an end-of-service payment.

Termination of Employment

A labor contract can be terminated upon initiation by either the employee or the employer. Unless otherwise stated in the contract, employees can leave their position after 30 days of providing notice. Employers can terminate an employment contract with valid grounds.

Grounds for terminating employment include:

  • Mutual agreement by the parties to do so
  • If the employer or employee has died
  • If the labor contract has expired and both parties have mutually decided not to extend the contract
  • If a legal authority has demanded the termination
  • If an unjustifiably dismissed employee has been reinstated to their previous position
  • If an employee has been enlisted for army service
  • If a court decision prevents an employee from performing their work duties as a result of a criminal offense

Employers who terminate a labor contract with an employee must establish a timeline for the transfer of duties to the new employee. This information must be provided when dismissing the original employee. Employers are required to provide the dismissed employee with the decision on the dismissal and any legally required dismissal allowances. Additionally, they must conclude a letter of reference about the occupation, profession, specialization, position and remuneration at the request of the employee.

Rules Regarding Visas and Foreign Workers in Mongolia

Accommodation

Ulaanbaatar offers favorable choices for accommodation, ranging from a cheap guesthouses to expensive hotels of international standards. There aren’t many hotels elsewhere in the country. In the most popular places visited by tourists, there are ‘ger’ camps. These are the traditional homes of Central Asian nomads.

Food

Conditions on the vast, cold Mongolian steppe have always made food a necessity, rather than an art. Nomads make do with what they can. Hence, the typical diet consists of a lot of meat and dairy, supplemented with flour-based doughs and rice on occasion. In the major settlements, like Ulaanbaatar, you can find a big selection of international food – even pizza! However, on the steppe, only the most basic food can be expected.

Public Holidays Recognized by Mongolia in 2024

Occasion Date
1 New Year’s Day January 1
2 Tsagaan Sar February 10 – 12
3 International Women’s Day March 8
4 Buddha Day May 23
5 Children’s Day June 1
6 Naadam Holiday July 11 – 15
7 Chinggis Khaan’s Birthday November 16
8 Republic Day November 26
9 Independence Day December 29

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