Employer of Record in Mongolia

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Mongolia if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Mongolia below, to avoid any compliance issues.

Employment Contract Requirements

According to the Mongolian Labour Law, employees should receive a written employment agreement within 10 days of starting their employment. These agreements are generally considered indefinite, except for cases like apprenticeships, probationary work, or temporary employment. Employment contracts are required to include essential details such as:

• Job title, duties, and responsibilities
• Basic salary and compensation
• Workplace and working hours

Onboarding Process

We can help you get a new employee started in Mongolia quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Mongolia

In Mongolia, the standard work week consists of 40 hours, distributed over 8 hours per day, and should not exceed 56 hours per week according to the New Labour Law. Employees are entitled to 2 consecutive rest days, commonly scheduled on Saturday and Sunday.

Overtime in Mongolia

In Mongolia, overtime, regulated by employment contracts or collective agreements, is compensated at 150% of the regular salary rate and rises to 200% for public holidays. Time off may be provided instead of payment. According to the New Labour Law, the maximum daily overtime should not exceed 4 hours.

Probation Period in Mongolia

In Mongolia, the typical maximum duration of a probationary period is three months.

Employment laws in Mongolia can be intricate, and even unintentional mistakes in contracts, benefits, or termination processes can carry legal and reputational consequences. With an Employer of Record, you gain a local partner that ensures every hire is compliant. The EOR takes care of drafting compliant contracts, processing accurate payroll, managing contributions to statutory benefits, and handling lawful terminations if needed, all according to local employment standards.

This level of protection is especially valuable when expanding into new or unfamiliar regions. Instead of using time and resources to build in-house legal knowledge, you gain immediate access to local expertise. The EOR keeps you ahead of regulatory updates and shields your company from potential compliance gaps, so you can confidently hire and manage employees while minimizing risk. For hiring managers and founders, it's the difference between hiring with uncertainty and building your team on a legally sound foundation.

Fiscal Year in Mongolia

1 January - 31 December is the 12-month accounting period that businesses in Mongolia use for financial and tax reporting purposes.

Payroll Cycle in Mongolia

The payroll cycle in Mongolia is usually monthly, with employees being paid between the 25th and last day of the month.

Minimum Wage in Mongolia

As of April 1, 2025, Mongolia's minimum wage is set at MNT 792,000 per month. This rate applies to all workers, and the government periodically reviews and adjusts it based on inflation and economic conditions.

Bonus Payments in Mongolia

The law in Mongolia does not include provisions regarding 13th-month salaries.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 12.5%- 14.5% on top of the employee salary in Mongolia.

Employee Payroll Tax Contributions

In Mongolia, the typical estimation for employee payroll contributions cost is around 11.7%.

Individual Income Tax Contributions

In Mongolia, the individual tax rate follows a progressive system.

Pension in Mongolia

Every elderly individual in Mongolia is entitled to receive a pension. The Mongolian old-age pension system comprises both social insurance and social welfare pension schemes. Social welfare pensions are designed to offer a minimum income security net for those who do not qualify for a social insurance pension.

When you’re scaling quickly, setting up local payroll systems in each new country slows you down. In Mongolia, the administrative load can include government registration, benefits management, and accurate, on-time payment delivery. An EOR gives you a plug-and-play solution that handles all of this while your internal team stays focused on growth, not red tape.

Key Ways an EOR Supports Payroll in Mongolia:

• Rapid Payroll Setup: Onboards employees quickly with ready-to-go infrastructure.
• End Administration: Handles salary, tax, and benefits with no extra internal resources.
• Vendor Simplicity: Consolidates payroll across countries for centralized oversight.
• No Entity Required: Operates legally, saving your business the time and resources needed for local incorporation.

In Mongolia, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications, paying fees, and meeting specific eligibility criteria. The key visa types include the HG Work Visa, B Business Visa, and T Foreign Investor Visa. Employers must ensure compliance with local labor regulations when sponsoring foreign employees. Timely applications and adherence to the process help ensure smooth onboarding and legal employment in Mongolia.

Mandatory Leave Entitlement in Mongolia

The annual leave entitlement in Mongolia is 15 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Mongolia

In Mongolia, employees are entitled to paid holidays during festival holidays, which encompass both memorial holidays and religious holidays of Christian origin. The 9 public holidays in Mongolia are:

Paid Time Off in Mongolia

In Mongolia, employees are entitled to 15 days of paid annual leave, while those under 18 have a right to 20 days. The number of additional annual leave days depends on the length of employment:

• 6-10 years of service: 3 working days
• 11-15 years of service: 5 working days
• 16-20 years of service: 7 working days
• 21-25 years of service: 9 working days
• 25-31 years of service: 11 working days
• More than 32 years of service: 14 working days

Maternity Leave In Mongolia

In Mongolia, pregnant employees are granted 120 days of maternity leave: 60 days before and 60 days after the birth.

Those with a minimum of 12 social security contributions and 6 monthly contributions in the 6 months preceding the leave can receive payments equal to 70% of their average salary through Mongolia's social insurance program. Adopting mothers also receive an equivalent leave until the child is 60 days old.

Paternity Leave In Mongolia

Under the New Labour law, fathers with a newborn in Mongolia are entitled to a minimum of 10 working days of paid leave, with the compensation being equal to the average salary for the corresponding period.

Sick Leave In Mongolia

Employees in Mongolia are entitled to sick leave for the duration of their illness, and sick leave is typically unpaid.

Parental Leave In Mongolia

In Mongolia, mothers and single fathers with children under 3 years old are entitled to childcare leave. During this period, the employer is responsible for making social insurance payments on behalf of the employee.

For startups and small teams, managing global employee benefits isn’t just complex, it’s a full-time job. In Mongolia, understanding what benefits are required, how to deliver them, and how to stay compliant can be overwhelming, especially without local HR expertise. An Employer of Record removes that pressure by taking complete ownership of benefits administration, so you don't have to become an expert in local employment law.

Whether it’s healthcare contributions, pension enrollment, or statutory leave, the EOR ensures everything is delivered accurately and on time. They navigate any country-specific nuances, keep up with legal changes, and ensure each benefit is properly tracked and documented. For founders, that means fewer distractions and more time to focus on growth. Your employees get the security and support they expect from a local employer, and you get to scale your team in Mongolia without building complex infrastructure or worrying about compliance missteps.

Termination Process in Mongolia

In Mongolia, contracts can be terminated by either party with or without cause. However, employers are generally expected to provide reasonable cause for termination.

Notice Period in Mongolia

The statutory notice period for both employees and employers is 30 days.

Severance in Mongolia

In Mongolia, severance pay is equivalent to one month's wages in cases of termination due to the employee's military duty, business liquidation, or when an employee reaches retirement age.