With the shift to remote working, companies across the globe are increasingly seeking top-tier, remote talent beyond the corporate HQ. If you’re looking to expand, Mongolia just might be the perfect place to begin growing your distributed team thanks to a low cost of living and proximity to other major markets including Russia to the north and China to the south, east, and west.
Marked by mountainous landscapes, friendly people, and rich cultural history, this landlocked country is home to over 3.3 million people. Sheer population size coupled with a low cost of living (57.4% lower than in the United States), and a minimum wage ringing in at just $157 USD per month, means expanding into this part of Asia gives you access to an expansive talent pool at an affordable rate.
But when it comes to hiring Mongolian talent, salaries aren’t the only monetary consideration to factor into your budget. It is important to consider the costs of setting up an employment package. This includes tax contributions, social security contributions, overtime and vacation pay, stipends, and benefits. All of these elements must be taken into account before beginning the hiring process.
We analyzed the costs of hiring an employee in Mongolia, including mandatory and optional expenses. This will help you expand your global reach without increasing hiring costs.
Mandatory Costs of Hiring in Mongolia
Mandatory hiring costs are non-negotiable expenses when hiring remote, Mongolian talent. Proper accounting of salaries, taxes, overtime pay, and vacation pay is essential. Otherwise, you may break local labor laws and regulations. Mandatory costs include:
Salary
The minimum wage in Mongolia is MNT 550,000 per month, or USD $157.46. Employers are legally obligated to pay this wage, per the Mongolian Constitution and the Labor Code of 1999, which protects workers’ rights, guaranteeing equal pay for equal work and protecting against discrimination.
As with most countries, salaries vary greatly between industries and job types. To offer a competitive salary, employers must consider the type of job and the skillset required for success.
Salaries in Mongolia are much lower than in the U.S. and Canada. This means you will pay less for similarly qualified workers in countries with a stronger economy.
Taxes and Benefits
All employers are required to contribute to the Mongolian social security (“SHI”) system at a rate of 12.5% of the employee’s gross salary, capped at MNT 525,000 (USD 150.38) per month. This money goes toward a pension, medical insurance, unemployment insurance, and benefit insurance.
Overtime Pay
Per Mongolia’s labor laws, the standard working hours are eight hours per day, 40 hours per week. The standard workweek is from Monday to Friday. If an employee exceeds this, they are legally required to receive overtime pay at a rate of one and a half times their normal hourly wage.
Severance Pay
In Mongolia, severance pay is granted to a terminated employee and is typically equal to, at minimum, the employee’s average salary for one month.
Supplemental Costs of Hiring in Mongolia
When the world is your competition, it pays to incentivize new and existing hires with attractive supplementary benefits like medical, dental, vision, life insurance, retirement savings plans, and other stipends and perks. When you offer attractive supplementary benefits, you are boosting morale and increasing retention, which in turn lowers onboarding costs and helps you establish a strong, remote team you can rely on.
Offering attractive supplementary benefits boosts morale and increases retention. This lowers onboarding costs, helping to establish a strong, remote team that you can rely on.
Benefits
In Mongolia, there is a variety of supplementary benefits certain companies offer. Typical supplementary benefits can include:
Health Benefits: To complement the government-funded health care in Mongolia, many companies will offer private health insurance to offset costs. The price will vary significantly depending on the type of private health insurance and coverage. One popular company, Pacific Prime Health Insurance, offers a variety of packages based on the types of coverage you want to offer your employees.
Bonuses and Extras
There are no mandatory bonuses in Mongolia but many companies will choose to provide annual benefits based on performance.
Average Cost of Hiring
Below is an estimate based on a salary of $100,000 for an employee in Mongolia. This salary is designed to make it easier to calculate. It will vary depending on your hiring goals. These include the employment contract details, the candidate's experience and education, and the type of position.
Average Cost Of Hiring One Employee in Mongolia (Annual in $USD)
Mandatory Burdens
Salary: $100,000
Employer Taxes: $12,500
Total: $112,500
These totals do not include costs for additional benefits. Examples of these are memberships to co-working spaces, office set-up subsidies, and bonuses.
Work with Borderless
Growing your remote, global team and hiring Mongolian talent can seem overwhelming, especially when you consider all the associated costs. Leave the headache to us. As your Employer of Record (EOR), Borderless handles all the administrative work, ensuring compliance and giving you cost savings, so you can focus on growing your business.
To get started, book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
