Employer of Record in Mongolia

How an Employer of Record Works in Mongolia

An Employer of Record (EOR) in Mongolia lets international companies hire in the country without establishing a local entity. The EOR becomes the legal employer, handling hiring, onboarding, compliance, and the employment relationship, while the international employer manages day-to-day operations.

Rivermate provides EOR services in Mongolia, and you can work with our local experts to make hiring in Mongolia quick, simple, and compliant.

Mongolia labor market: At a glance

The hiring market
Greatest hiring activity:	Ulaanbaatar
Hiring timelines:	About 4–8 weeks for standard positions.
In-demand sectors:	Construction, mining, manufacturing, wholesale and retail.
Sectors with skills shortages:	Wholesale and retail, manufacturing, and construction.

The salary market
Employer tax contributions:	12.5% to 14.5%.
Minimum wage:	MNT 792,000 per month.
Average gross annual salary:	MNT 36,162,000
Income tax brackets:	Up to MNT 120,000,000: 10%. MNT 120,000,001–180,000,000: 15% Above MNT 180,000,000: 20% Non-residents: 20% flat rate for income sourced in the country.

What it costs to hire an employee in Mongolia

There are various things you’ll have to budget for when hiring in Mongolia. Beyond salaries, you’ll also have to account for social insurance, potential severance payments, paid leave, and more. This section provides details of the main costs and what you will need to budget for.

Salary

Salaries vary by occupation, employer, industry, and location, and they are paid in Mongolian tugrik (MNT).

The statutory minimum wage is MNT 792,000 per month, while the average monthly nominal wage (September 2026) is MNT 3,013,500, according to the National Statistics Office. In August 2026, the National Tripartite Committee for Labor and Social Partnership announced that the minimum wage would increase to MNT 1,000,000 per month in 2027. The decision hasn’t been formally confirmed, so employers should monitor developments.

Contributions

Employers must contribute to the social and health insurance systems. The total contribution ranges from 12.5% to 14.5%, depending on occupational risk classification.

• Pension insurance: 8.5%
• Benefit insurance: 1%
• Health insurance: 2%
• Unemployment insurance: 0.5%
• Industrial accident and occupational disease insurance: 0.5%, 1.5%, or 2.5%

Employees contribute 11.5% in total, and employers must withhold this from employees. There is a cap of MNT 910,800 per month for employees, but there is no cap for employer contributions.

Income tax

While not an employer expense, Personal Income Tax (PIT) must be withheld. It is a progressive system ranging from 10% to 20%, while non-resident taxpayers pay a 20% flat rate for income sourced in the country.

Bonuses

There are several bonuses, allowances, and additional costs that employers often pay, though they are not generally mandatory. These include performance-related bonuses, end-of-year bonuses, holiday bonuses, transport and meal allowances, health insurance, life insurance, and professional training. Most of these are not statutory. However, life and health insurance are mandatory in some cases, including where a workplace has been formally classified as high-risk.

Leave

Employees receive paid annual leave of at least 15 working days per year. They need six months of employment to be eligible, and the amount of leave they are entitled to increases with length of service. Employees working under non-standard conditions may also get additional days.

Sick pay is generally covered by social security at 50% to 75% of the employee’s average salary over the last three months for eligible employees. However, the employer pays the first five working days before social security takes over.

Maternity leave is 120 days or 140 days for twins. For eligible employees, social security covers 100% of pay for the average pay they received over the last 12 months. Paternity leave is ​​10 working days, and the employer covers this on full pay at the father’s average salary.

Overtime

Normal working hours are limited to eight hours per day or 40 hours per week. Total hours, including overtime, cannot exceed 56 hours per week, and the maximum overtime per day is four hours.

Working overtime or on weekly rest days, at night, or on public holidays leads to higher pay. Overtime is paid at a minimum of 1.5 times the average salary, and the same applies to weekly rest days. Night work is paid at a 20% premium, and public holidays are double pay. These additional payments are made when compensatory time off is not provided.

Severance

Severance pay may be required when terminating employment for a specific reason, like redundancy, business liquidation, insufficient skills or performance, or health-related incapacity. The statutory minimum severance payment is based on the length of service:

• 6–24 months: At least one month of base salary
• 2–5 years: At least two months.
• 5–10 years: At least three months.
• 10 years or more: At least four months.

These are the minimum payments, but collective agreements or contracts could establish higher amounts.

Under Article 80.4 of the Labor Law, employers also need to provide at least 30 days’ written notice for these dismissals. If the employee does not work during this period, they must receive an allowance based on their average salary until the notice period ends. This is a separate obligation from severance.

Work permits

If hiring foreign workers, the permission to invite a foreign worker currently costs MNT 30,000 per person. The employment permit costs MNT 30,000, and permit extensions are also charged at MNT 30,000.

There is also a monthly workplace fee equal to twice the statutory minimum wage. This is currently MNT 1,584,000 for each foreign employee each month, based on the current minimum wage. However, statutory exemptions may apply.

Employer cost calculator

Get an accurate idea of employment costs in Mongolia by using our calculator.

What it really looks like to hire in Mongolia

Market condition	What an employer needs to know
Talent availability	Good. Mongolia has a young workforce with many graduates. However, recruitment is concentrated in Ulaanbaatar.
Top-paying sectors	Mining and quarrying.
Skills shortages	Wholesale and retail, manufacturing, and construction.
Key employer challenge	Hiring foreign nationals can be challenging because employers must search for suitable Mongolian candidates before getting permission to employ a foreign worker.

The highest-paying industry in Mongolia is mining and quarrying, with an average monthly wage of MNT 5.06 million. Finance and insurance are also higher-paying sectors, with an average wage of MNT 3.36 million.

Wages vary geographically. For example, wages in Ulaanbaatar are typically in line with the national average, while the Orkhon and Ömnögovi regions have higher wages.

Mongolia has quite a young population, with 58.5% under 34, and there are lots of graduates to fill roles. The main recruitment hub is Ulaanbaatar, which makes up about 80% of the hiring demand, according to the Labor Market Demand Barometer.

Mining is an important industry, especially for specialized technical roles, but there are many important sectors. Services make up nearly 50% of employment, agriculture about 27%, and industry and construction third place at about 23%.

Hiring employees can take about four to eight weeks for standard positions, while senior management roles can take longer. The process is longer for foreign nationals, who require a work permit and an appropriate work visa.

You must first get preliminary permission to invite the foreign worker, and the employee must then obtain an employment visa before traveling. When they arrive, you can apply for the work permit, which takes about 10 business days.

For many positions, you have to advertise the vacancy through the local employment agency for at least 14 business days before you can hire a foreign worker, so you should allow time for this additional process.

Country-specific problem that employers must know about

Managing payroll in the local currency can sometimes be a challenge for employers new to the country. You must adapt to local payroll requirements when hiring in the country, especially payment currency and frequency.

Generally, salaries must be paid in the Mongolian tugrik (MNT), as well as leave, bonuses, and any additional pay. If you’re accustomed to paying in US dollars or euros, you’ll need to account for local currency conversion. Due to changes in the exchange rate, this could affect your budgets.

Payment frequency is also important. You must pay employees at least twice a month on fixed dates that are specified in the contract or internal labor regulations. If a payday falls on a weekend or public holiday, employees must receive their pay on the preceding business day.

Compliance risks employers must know about

Social security contributions and reports

You’ll need to calculate social insurance contributions and pay them for all your employees. You also need to withhold PIT and remit it to the tax authorities. You need to pay contributions within the month. The contribution report is due by the 5th of the next month, and PIT is remitted by the 10th of the next month. Quarterly tax reports are due by the 20th of the first month following each quarter. Incorrect calculations and missed payments can lead to penalties and interest.

Contracts and probation

You must prepare written contracts that are signed by both parties and give a copy to each employee. Contracts should include essential terms like salary and working conditions, and you’ll need to mutually agree on any changes to the terms. The initial probation period is no longer than three months, but it can be extended once for another three months by mutual agreement.

Work permits

Most foreign nationals who want to work in Mongolia need the correct employment authorization and visa before they can begin work. Employers must follow all the correct permit and recruitment procedures. This usually involves advertising the vacancy and attempting to find a local first. If you don’t obtain the necessary authorization for foreign workers or fail to meet workplace requirements, the permit may be revoked, and you may face fines and the employee's possible deportation.

Health and safety

You must provide safe working conditions for your employees and comply with all health and safety requirements. This includes assessing workplace risks, having appropriate safety procedures in place, providing employees with training, and supplying protective clothing and equipment as well as covering the costs of maintaining and cleaning it. Higher-risk workplaces have extra requirements, including providing employees with employer-paid life and health insurance. The insurance amount must be at least 36 months' salary.

How Rivermate can help you stay compliant when hiring in Mongolia

Because our local experts know exactly how to apply local labor laws in Mongolia, we can handle all aspects of the employment relationship. That means you can focus your efforts on running your business while we take care of the rest.

Benefits of hiring employees through an EOR in Mongolia

Hiring in Mongolia means you can access a young workforce in various sectors, but navigating local employment requirements can be challenging. An EOR provides a simpler way to hire in Mongolia.

With an EOR, there’s no need to set up your own local entity, making it potentially much quicker to hire. You could hire in a matter of weeks while saving on the costs of setting up a local entity, including an office and expert HR staff.

An EOR like Rivermate employs workers on your behalf, saving you time and reducing potential challenges with registrations, payroll, personal income tax withholding, and social security contributions. Experienced local experts handle everything on time.

They will create employment contracts, handle onboarding, ensure paid leave is processed correctly, manage terminations legally, and handle all administrative requirements. They can also help with employing foreign nationals by dealing with work permits.

When you use an EOR in Mongolia, you can focus on the important tasks like managing your team and their day-to-day work and responsibilities. The EOR deals with the formal administration, so you can focus on operations and growth.

Ready to start hiring in Mongolia?

Hiring in Mongolia goes beyond simply finding the right candidate. At Rivermate, we make the entire process simple for foreign companies, handling payroll, taxes, compliance, and more, so you can hire with confidence.

Talk to a Mongolia Hiring Expert

Sources:

https://legalinfo.mn/mn/detail?lawId=16532053891911

https://legalinfo.mn/mn/edtl/16760272220671

https://mlsp.gov.mn/eng/content/detail/1953

https://data.1212.mn/pxweb/en/NSO/NSO__Labour%2C%20business__Wages__MONTHLY%20AVERAGE%20NOMINAL%20WAGES%2C%20by%20division%20of%20economic%20activities/DT_NSO_0400_022V3.px/

https://data.1212.mn/pxweb/en/NSO/NSO__Labour%2C%20business__Wages__MONTHLY%20AVERAGE%20NOMINAL%20WAGES%2C%20by%20region%2C%20aimags%20and%20the%20Capital%2C%20by%20gender/DT_NSO_0400_021V3.px/

https://downloads.1212.mn/2qLr_JZbPAvmAa1f3ySCxakKUL_NMu9_-t-j8Ztf.pdf

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https://legalinfo.mn/en/edtl/16230949402081

https://legalinfo.mn/mn/detail?lawId=14410&type=2

https://taxsummaries.pwc.com/mongolia/individual/other-taxes

https://legalinfo.mn/en/edtl/16532226261421

https://mlsp.gov.mn/content/detail/3661

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https://legalinfo.mn/en/edtl/16532497148861

https://legalinfo.mn/en/edtl/16959980758211