Country guide · 8 min read · Updated October 2026
Payroll in Iraq: the month, the calendar and a salary worked through
How a payroll month runs in Iraq: the deadlines, social security branch by branch, a salary worked through, income tax, overtime, the year's holidays, and how your people there can be paid every month now.
How does payroll work in Iraq?
In federal Iraq, monthly wages are paid at the end of the month, and no more than five days late. Social security is due during the next month: 12% from the employer and 5% from the employee, on pay up to IQD 1,750,000 a month. For a foreign employee, the employer also pays the state's 8% share. Income tax is withheld after personal allowances, at 3% to 15%, and paid within 15 days of the next month.
Know the month's deadlines
Five deadlines shape a payroll in Iraq. Each one is the employer's to meet.
These are federal Iraq's rules. The Kurdistan Region applies its own rules on foreign workers, social security and income tax.
| Deadline | What is due |
|---|---|
| The end of the month, and no more than five days after it | Wages for monthly-paid staff, with a written statement of what makes up the pay |
| During the next month | Social security contributions, both shares |
| Within the first 15 days of the next month | The income tax withheld, to the General Commission for Taxes |
| At the start of each year | The year's return to the social security department, listing each insured worker, their wage and the contributions due |
| When employment ends | The final settlement, from the day after the contract ends, or within seven days of leaving when the employee resigned |
Contributions more than 120 days late carry a fine of 1% for each month of delay. The fine stops at 100% of the contributions owed.
Follow one salary through the month
Take a salary of IQD 1,440,000 a month, all of it counted for social security. Here is the same salary for an Iraqi national and for a foreign employee, before income tax.
| An Iraqi national | A foreign employee | |
|---|---|---|
| Gross pay | IQD 1,440,000 | IQD 1,440,000 |
| Social security, from the employee | IQD 72,000 | IQD 72,000 |
| Pay before income tax | IQD 1,368,000 | IQD 1,368,000 |
| Social security, from the employer | IQD 172,800 | IQD 288,000 |
| End of service, built up each month | IQD 56,000 | IQD 56,000 |
| The employer's cost for the month | IQD 1,668,800 | IQD 1,784,000 |
For the foreign employee, the employer's 20% is its own 12% and the state's 8% share.
End of service builds up at two weeks' wage for each year of service. The Labour Law counts a month as 30 days. This example values a day's wage on that count, as the month's wage divided by 30. Each year then builds up 14 days' wage.
Income tax is then withheld on the year's taxable income, after personal allowances, as the next section works through.
Work out income tax band by band
The employer withholds income tax each month. It is worked out on the year's taxable income, after personal allowances, in four bands.
| Taxable income a year | Rate |
|---|---|
| The first IQD 250,000 | 3% |
| From IQD 250,000 to IQD 500,000 | 5% |
| From IQD 500,000 to IQD 1,000,000 | 10% |
| Above IQD 1,000,000 | 15% |
The top band starts at IQD 1,000,000 a year, so most of a salary's taxable income is taxed at 15%.
Take a taxable income of IQD 12,000,000 for the year, after personal allowances.
| For the year | |
|---|---|
| 3% on the first IQD 250,000 | IQD 7,500 |
| 5% from IQD 250,000 to IQD 500,000 | IQD 12,500 |
| 10% from IQD 500,000 to IQD 1,000,000 | IQD 50,000 |
| 15% on the IQD 11,000,000 above IQD 1,000,000 | IQD 1,650,000 |
| The year's tax | IQD 1,720,000 |
| Withheld each month | IQD 143,333.33 |
What is withheld is paid to the General Commission for Taxes within the first 15 days of the next month.
Pay overtime at the right rate
| What it earns | |
|---|---|
| Overtime by day | The normal wage for the hours, plus 50% |
| Overtime at night, or in dangerous, arduous or harmful work | At least two times the normal wage |
| Work on the weekly rest day | Overtime pay, and a day off in the following week |
| Work on a feast day or an official holiday | The day's wage, plus two times that wage |
Normal hours are up to 8 a day and 48 a week. A night's work is limited to 7 hours.
In non-industrial work, overtime is limited to 4 hours a day. No one may work more than 40 hours of overtime in 90 days, or 120 in a year.
Friday is the weekly rest day, and another day of the week can take its place.
Mark the year's public holidays
Each official holiday is paid at the full wage. A holiday that falls during annual leave does not count against it.
| Holiday | When |
|---|---|
| New Year's Day | The 1st of January |
| Army Day | The 6th of January |
| The day of remembrance for Halabja and the former regime's crimes | The 16th of March |
| Nowruz | The 21st of March |
| Labour Day | The 1st of May |
| Islamic New Year | The 1st of Muharram |
| Ashura | The 10th of Muharram |
| The Prophet's Birthday | The 12th of Rabi al-Awwal |
| Eid al-Fitr | From the 1st to the 3rd of Shawwal |
| Eid al-Adha | From the 10th to the 13th of Dhu al-Hijjah |
| Ghadir Day | The 18th of Dhu al-Hijjah |
The Islamic holidays follow the moon. The Shia and Sunni endowment offices each announce the first day of the two Eids. Where they differ, the holiday runs from the first day either sets to the last day either sets.
The Council of Ministers can add up to 7 days of temporary official holiday a year. Christians, Sabian Mandaeans and Yazidis also have holidays of their own.
Keep pay above the floor, and paid the way the law sets
| The rule | |
|---|---|
| Minimum wage | IQD 350,000 a month, set by the Council of Ministers. A wage may not fall below it, or below the minimum a binding collective agreement sets for the profession |
| Its review | The minimum wage is adjusted from time to time to the cost of living, and reviewed every two years |
| The annual raise | Due after each full year with the same employer, at a rate agreed for each enterprise from labour market indicators |
| How wages are paid | In Iraqi dinars, unless the contract says otherwise. By cheque or bank transfer only under a collective agreement, an arbitration award or the employee's written consent, which can be withdrawn at any time |
| The pay statement | A detailed written statement with each payment, showing the period, the allowances, overtime, and any additions or deductions |
| Deductions | No more than 20% of a wage below three times the minimum wage, or 30% of a wage above it. Maintenance debts are outside both limits |
| Loans from the employer | No interest may be charged |
| Unused annual leave | Paid in cash when employment ends, on the last wage paid |
| End of service | Two weeks' wage for each year of service, paid when employment ends, except where the contract ends for a reason the Labour Law excludes |
Know what has changed, and what is reviewed next
| When | What changes |
|---|---|
| November 2023 | The Social Security Law of 2023 is in force: 12% from the employer and 5% from the employee, with the employer paying the state's 8% share for a foreign employee |
| 27 May 2024 | The Official Holidays Law sets the year's official holidays, Ghadir Day among them |
| 30 March 2026 | New instructions for foreign workers: a work permit for a year, renewed each year, and foreign workers at most 50% of a project's staff |
| Every two years | The minimum wage is reviewed against the cost of living, as the Labour Law sets |
Payroll opens in Iraq when a client needs it
Payroll opens in Iraq when a client needs it.
When it opens, it will work as our payroll does in the Gulf and Egypt, from one record. Your entity will submit the files and pay its people.
It will go live only after two months side by side with your current provider, once the numbers match.
Have your people in Iraq paid every month, now
PEO, part of Global Kinect EOR, pays your people in Iraq every month in Iraqi dinars, with benefits and compliance handled.
Hiring in Iraq without an entity of your own is Global Kinect EOR.
Common questions.
When is social security due in Iraq?
Do foreign employees pay social security in Iraq?
Can our people in Iraq be paid through Global Kinect now?
Need your people in Iraq paid every month?
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