Employer of Record in Mongolia

An Employer of Record (EOR) in Mongolia is a service that lets you hire employees in the country without setting up your own local entity. The EOR becomes the legal employer for your team. It handles all the HR tasks like payroll, taxes, benefits, and compliance with Mongolian labor laws. This allows you to focus on managing your employees' day-to-day work while the EOR takes care of the administrative side. For a provider that can help you with this, check out Rivermate.

How an Employer of Record (EOR) Works in Mongolia

Using an EOR simplifies hiring in Mongolia. The process is straightforward. You find the talent, and the EOR puts them on their payroll.

Here is how it works:

1. You Find the Talent. You recruit and select the best candidate for your team in Mongolia.
2. The EOR Hires Them. The EOR legally hires the employee on your behalf. They handle the employment contract, ensuring it complies with Mongolia's labor laws.
3. Onboarding Begins. The EOR manages the entire onboarding process. This includes any necessary registrations with local authorities.
4. You Manage Daily Work. You manage your employee's daily tasks and responsibilities, just like any other member of your team.
5. The EOR Handles HR. The EOR takes care of payroll, taxes, benefits, and ensures everything stays compliant with local regulations.

Why use an Employer of Record in Mongolia

Using an EOR in Mongolia helps you expand your team without the cost and complexity of setting up a legal entity in the country. It is a flexible, low-risk solution for testing new markets or scaling your team across borders. An EOR gives you a local partner to ensure every hire is compliant.

Here are some key benefits:

• Stay Compliant. Employment laws in Mongolia can be complex. An EOR ensures that employment contracts, benefits, and termination processes follow local laws.
• Save Time and Money. Setting up a local entity can be a long and expensive process. An EOR allows you to hire employees quickly without this step.
• Manage Benefits Easily. An EOR handles the administration of employee benefits. This includes healthcare, pension enrollment, and statutory leave.
• Simplify Payroll and Taxes. The EOR manages payroll processing and tax contributions. Employers in Mongolia contribute around 12.5% in payroll taxes for things like social security and healthcare.
• Sponsor Work Visas. An EOR can legally sponsor work visas for your employees if you do not have your own entity in the country.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Mongolia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Mongolia.

Hiring in Mongolia is becoming more popular as the country's economy grows, especially in sectors like mining, construction, and IT. The workforce is skilled, and labor costs can be lower than in other countries. However, you need to follow Mongolia's labor laws to avoid problems. This guide will walk you through the key things you need to know.

Employment contracts & must-have clauses

When you hire an employee in Mongolia, you must provide a written employment contract. This contract is the foundation of your working relationship and needs to be clear and fair. You can use either a fixed-term contract for a specific project or period or an indefinite contract for ongoing roles.

Make sure your employment contract includes these essential clauses:

• Parties to the agreement: Full legal names of you and your employee.
• Job title and description: A clear explanation of the employee's role and responsibilities.
• Workplace: Where the employee will be working.
• Start date: The first day of employment.
• Working hours: The daily and weekly work schedule.
• Salary and payment: How much the employee will be paid and how often.
• Leave entitlements: Details on annual leave, sick leave, and other time off.
• Social insurance: Information on contributions to social insurance funds.

Probation periods

In Mongolia, you can include a probationary period in the employment contract to see if an employee is a good fit for the job.

• The maximum probation period is typically three months.
• For jobs that require special skills, it can sometimes be extended to six months.
• During probation, employees have the same rights as regular employees, including salary and social insurance.

Working hours & overtime

The standard workweek in Mongolia is 40 hours, usually eight hours a day, five days a week.

• The maximum number of work hours in a week, including overtime, is 56.
• Overtime pay is generally 1.5 times the employee's regular pay.
• If an employee works on a public holiday, they should be paid double their normal rate.

Public & regional holidays

Your employees in Mongolia are entitled to paid time off for public holidays. It's a good idea to have a clear policy on this.

Here is a list of public holidays in Mongolia:

Note: Some holiday dates are based on the lunar calendar and may change each year.

Hiring contractors in Mongolia

You can also hire independent contractors in Mongolia for specific projects. This can give you more flexibility and save on costs. However, it's important to get the classification right.

An independent contractor is self-employed and responsible for their own taxes and social insurance. If you treat a contractor like an employee, you risk misclassification, which can lead to fines and other penalties.

An Employer of Record (EOR) can help you avoid this risk. An EOR acts as the legal employer for your workers in Mongolia, taking care of compliance, payroll, and HR. This lets you work with talent in Mongolia without having to set up a local entity or worry about misclassification.

Navigating compensation and payroll in Mongolia requires a clear understanding of the local rules. Setting up a compliant system is key to attracting and keeping good employees. You must follow Mongolian labor laws, which cover everything from salaries and bonuses to working hours and taxes. A solid compensation plan helps build your reputation as a good employer.

Payroll cycles & wage structure

In Mongolia, the payroll cycle is typically monthly. You will usually pay your employees once a month, often near the end of the month. Payments are almost always made by bank transfer.

While performance or holiday bonuses are common, there is no law that requires you to pay a 13th month salary.

Overtime & minimums

A standard workweek in Mongolia is 40 hours, based on an 8-hour day.

• Overtime Pay: If an employee works beyond the standard 40 hours, you must pay them 150% of their regular hourly wage.
• Holiday Pay: For work done on a public holiday, the pay rate is 200% of the basic salary.
• Overtime Limit: Overtime is generally limited to a maximum of 4 hours per day.
• Minimum Wage: The national minimum wage is 792,000 Mongolian Tugriks (MNT) per month.

Employer taxes and contributions

As an employer, you are responsible for contributing to social security on behalf of your employees. These contributions are a percentage of the employee's salary.

Employee taxes and deductions

You must also deduct taxes and social security contributions from your employees' wages.

Social Security Deductions

Income Tax

Employee income tax is progressive.

In Mongolia, providing the right benefits and leave is essential for attracting and keeping good employees. The country's labor laws set out specific minimums that you must provide. These rules cover everything from annual vacation to social insurance. Understanding these requirements is the first step to building a compliant and competitive benefits package for your team.

Statutory leave

Mongolian law provides several types of leave for employees.

• Annual Leave All employees get a baseline of 15 working days of paid annual leave. Employees under 18 receive 20 days. This entitlement increases with an employee's years of service.
  • 6-10 years: 3 extra days
  • 11-15 years: 5 extra days
  • 16-20 years: 7 extra days
  • 21-25 years: 9 extra days
  • 25-31 years: 11 extra days
  • 32+ years: 14 extra days
• Maternity Leave Female employees are entitled to 120 days of paid maternity leave, typically split into 60 days before birth and 60 days after. The social insurance fund pays this leave if the employee has made sufficient contributions.
• Paternity Leave New fathers receive at least 10 working days of paid leave.
• Parental Leave Mothers and single fathers can take childcare leave until their child turns three. The employer must continue to pay social insurance contributions on the employee's behalf during this time.
• Sick Leave Employees can take paid sick leave if they provide a valid medical certificate. The social insurance fund covers the payment for a specific period.

Public holidays & regional holidays

Employees are entitled to paid days off for public holidays. If an employee needs to work on a public holiday, you must pay them at a higher rate, typically double their usual pay, or offer them another day off in return.

Here are the public holidays for 2025.

Typical supplemental benefits

While the law requires certain benefits, many companies offer more to stay competitive. Here’s a look at what is required by law versus what you might offer as an additional perk.

How an EOR can help with setting up benefits

Setting up a benefits plan in a new country can be complicated. You need to understand local laws, cultural expectations, and market standards. This is where an Employer of Record (EOR) can help.

An EOR simplifies the entire process. We act as the legal employer for your team in Mongolia, which means we handle all the HR tasks for you. This includes:

• Ensuring your benefits package is fully compliant with Mongolian labor law.
• Administering statutory benefits like social insurance and paid leave.
• Advising on competitive supplemental benefits to attract top talent.
• Managing payroll and ensuring all contributions are made correctly and on time.

Using an EOR saves you time and reduces risk. You can focus on growing your business, knowing that your team's benefits and payroll are in expert hands.

Letting an employee go in Mongolia requires careful attention to the local Labor Law. The process is structured to protect both you and your employee, outlining specific rights and obligations for a compliant offboarding. You must follow set procedures, which include providing written notice and having a valid legal reason for the termination. Failing to follow these rules can lead to wrongful dismissal claims, which could result in having to reinstate the employee or pay extra compensation.

Notice periods

When you end an employment contract in Mongolia, you need to provide a notice period. Both you and your employee must give at least 30 days' written notice. This allows time for a smooth handover of responsibilities.

For situations involving mass layoffs, the rules are different. If you are liquidating the business, you must inform the employee's representatives at least 45 days before the termination date. For other types of mass layoffs, you need to provide a 30-day notice to the local labor organization.

Your employment contract might specify a longer notice period than the legal minimum. If so, the longer period is the one you must follow.

Severance pay

Employees in Mongolia are typically entitled to severance pay when their employment is terminated. If the termination is due to the liquidation of your company, you must pay a severance amount equal to at least one month's average salary. In many cases, employees are entitled to about 30 days of their regular pay as severance.

The final payment to your employee should include their salary for the time worked and any other outstanding payments.

How Rivermate handles compliant exits

Navigating employee terminations in a different country can be complex. We make sure every step of the offboarding process is compliant with Mongolian Labor Law.

Here’s how we manage it:

• Documentation: We handle all required paperwork, including drafting and delivering the formal written termination notice.
• Compliance Checks: Our team ensures the reason for termination is legally valid and that all procedural requirements are met.
• Final Payments: We calculate and process all final payments, including salary, unused vacation time, and legally required severance.
• Clear Communication: We facilitate clear communication between you and the employee to ensure a respectful and professional exit process.

Using an Employer of Record like Rivermate removes the guesswork. We manage the details so you can focus on your business, confident that your offboarding practices are fair and fully compliant.

Navigating Mongolia's visa and work permit system is straightforward when you understand the requirements. If you plan to hire someone to work in Mongolia, they will need both a work permit and a work visa to legally be employed. The process involves multiple government agencies and requires careful attention to detail.

Employment visas & sponsorship realities

The most common route for employing foreign talent in Mongolia is through an HG visa, which is specifically for work purposes. As the employer, you are responsible for sponsoring this visa and initiating the application process. This means you, or an Employer of Record (EOR) acting on your behalf, must have a registered legal entity in Mongolia.

An EOR can legally sponsor work visas for your employees, which is a practical solution if you don't have your own entity in the country. The EOR handles the administrative tasks of the visa process, ensuring compliance with local immigration and labor laws.

Here are the key realities of sponsoring an employment visa:

• Work Permit First: Before applying for a work visa, you must first obtain a pre-work permit from the General Authority for Labor and Social Welfare.
• Quotas Matter: The Mongolian government sets annual quotas on the number of foreign workers a company can employ. These quotas can vary by industry.
• Location Specific: Work permits are often tied to a specific work location, particularly in industries like mining or construction.
• Process Timeline: Be prepared for a process that can take between 30 and 45 days from start to finish.

It's important to note that independent contractors are not eligible for an HG work visa and must follow a different process.

Business travel compliance

For short-term business trips, a business visa (B visa) is the appropriate choice. This visa is for activities that do not count as employment. Think of it as a visa for business-related visits, not for work.

Permitted activities on a business visa include:

• Attending business meetings and conferences
• Participating in training or seminars
• Negotiating and signing contracts
• Exploring business opportunities

A business visa does not permit you to engage in any paid or unpaid work. The standard business visa is valid for 30 days. For U.S. citizens, visits under 90 days do not require a visa.

If you are visiting for business, you must register with the Immigration Agency of Mongolia within 48 hours of your arrival. Failure to comply with the terms of your visa can lead to fines or other penalties.