Social Security

State provided benefits such as pension, health, disability, unemployment etc. are provided by the Mongolian Social Security System. Participation in Social Security is mandatory for every single person who are currently employed on the Mongolian soil, such as citizens of Mongolia, foreign employees and even stateless persons.

Rates

The Social Insurance Law of Mongolia has established contribution rates for social security which both the employers and employees must pay. As of 2018, depending on the type of industry, rates between 12.5% to 14.5% were to pay by the employers. Employee contribution rate is fixed at 11.5% from salary and other incomes.

Employee contribution rates are 11.5% (from salary and similar income). However, employee monthly contributions are capped at the minimum wage (currently MNT 368,000 effective from 1 January 2019). The contribution rate shall increase as follows during 2019 and 2020.

Employers are responsible for withholding social security contributions and transferring them to relevant authorities on a monthly basis.

Social security benefits

Workers who have contributed to Social Security are eligible for social security benefits. Pension benefits are paid to a worker or the worker’s family upon their retirement, disability or death. Similarly, aid benefits are paid to a worker or the worker’s family upon disability, pregnancy or death. The amount of benefit paid to a beneficiary can depend on a variety of factors, including the salary of a worker and the number of years he or she contributed to Social Security. Health benefits are paid in

case of a worker’s illness. To access healthcare at a state hospital, employees need to provide evidence of their contributions. The Mongolian Government has been reconsidering its position with respect to a number of DTAs. Accordingly, anyone looking to place any reliance on the provisions of a DTA in assessing any investment decision would be advised to ensure that they seek the most up to date advice.