Changes to the social insurance premium rates

Mongolia • No. 02/2021 • July 2021

On June 11, 2021, the Mongolian Parliament, State Great Khural, made changes to the social insurance premium rate by adopting the Amendment Law to the Law on Social Insurance (the “Amendment”), effective from July 1, 2021.

The Mongolian Law on Procedures for the Application of Social Insurance Laws dated 9 June 1994 states that the pension insurance premium rate calculated on the insured's salary and equivalent employment income shall be increased from 7% to 9.5% for the period of 2017 to 2021 subsequently. Thus, given the pension insurance premium rate, which is the highest one among other insurance types, the social and health insurance rates were supposed to become 13.5%-15.5% and 12.5% in total for an employer and an employee respectively starting from 1 January 2021.

However, in response to the COVID-19 pandemic, the Law on Exemption from Social Insurance Contributions and Support from the Unemployment Insurance

Fund dated 9 April 2020 (effective from 1 April 2020) provided certain discounts on the social insurance premiums, applicable to Mongolian citizens only. As a result, the discounted rates were applied instead of the normal rates from 1 April 2020 to 1 July 2021, and the normal rates were supposed to resume from 1 July 2021.

Yet, with the Amendment becoming effective, the pension insurance premium was reduced from 9.5% to 8.5% starting from 1 July 2021.