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How to calculate net income of salarу Printable version

Last update: 06.10.2021

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Let’s imagine the situation: on the interview employer indicated the amount of your future salary. To understand how much you will get “on your hands”, as they speak, you deduct approximately 20% in the mind’s eye, which comprises tax and pension contributions and get the amount of net salary. But is it right to deduct exactly 20%, what part of salary must really be deducted for pension and tax contributions, all about this - in the article.
Let’s note once again that employer deducts from salary amount compulsory pension contributions (CPC) for future pension and individual income tax (IIT).   
After reading this article you will be able to calculate total amount of net salary by yourself, without the help of accountant.  

First of all, from salary you should deduct pension contributions in size of 10% of salary on the basis of the article 25, RK Law “On pension insurance in the Republic of Kazakhstan”. However, there are restrictions in the form of the maximum possible income for the calculation of mandatory pension contributions, which is equal to 50 minimum wages (50 MW (2 125 000 tenge for 2021)).

Individual income tax (IIT) also comprises 10% (according to the art. 320 of RK Tax code) from the remaining amount after deducting  of CPC, but it is calculated in other way. The Tax Code provides for an amount not subject to income tax in the amount of 1 MW (42 500 tenge for 2021), which changes annually in a larger direction.

Let’s consider it in the formula of calculation. For example: salary amount is 90 000 tenge.    

  1. CPC = 90000 * 0,1 = 9000 tenge.
  2. MaxCPC = 42 500 * 50 = 2 125 000 tenge.
  3. The sum of CPC 9 000 is not exceeded 2 125 000, that is why we are proceeding below.
  4. IIT = (90 000 – 9 000 – 42 500) * 0.1 = 3 850 tenge.
  5. The specified salary 90000 is rather more than 42 500 – proceeding to the last point.
  6. Salary = 90000 – 9000 – 3 850 = 77 150 tenge.
  7. Thus,  77 150 KZT – is an amount of net income with the salary 90 000 KZT.

*​This calculation is provided for employees whose accrued income exceeds the 25-fold monthly calculation index established by the law on the republican budget and valid on January 1 of the relevant financial year.

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