What the law makes an employer pay for an Iraqi or a foreign worker

When a business owner in Baghdad, Erbil or Basra draws up a hiring budget, the salary comes first, and then the other items the law imposes come as a surprise. The Law Office of Ali Barakat, in Baghdad, al-Yarmouk, gathers those items in one place, grouped by the legislation they come from, and separates what applies to every worker from what applies only to a non-Iraqi worker. The point is to know the type of each cost and its legal basis; the amounts themselves come from decisions and instructions that change over time.

Item one: the wage and what comes with it

The contract sets the wage, but it cannot fall below the statutory minimum wage or the rate for the trade under a binding collective agreement, under article 62. It must be paid on time, weekly or monthly, with a delay of no more than five days, under article 53. On top of the basic wage the law adds:

• Overtime, paid at a premium over the normal wage at the percentages that article 71 lays down, higher for night or dangerous work.
• Work on a feast or official holiday, paid at double rate on top of the wage, under article 74(2).
• Time when the worker was present but prevented from working by causes outside their control, which counts as paid work, under article 40.

Item two: paid days with no output

Annual leave is fully paid, with a floor of twenty-one days that rises for hazardous jobs and with longer service, under article 75, and its pay is handed over before the leave starts. Sick leave is thirty days a year paid by the employer; anything paid beyond that for an insured worker is recovered from the department that runs workers' pensions and social security, as article 80 provides. Marriage, bereavement and public-duty leave are fully paid, under article 82, and maternity leave is at least fourteen weeks at full pay, under article 87. Leave left unused on the last day of the contract turns into cash, by article 76(4).

Item three: when the relationship ends

When service ends, the worker is owed two weeks' wages for every year of service, except in the cases article 45 excludes. Where the employer relies on an article 43(2) ground and skips the thirty-day written warning, it owes the wage for that month instead, under article 44. If a worker who had completed a year or more dies, the family receives the equivalent of two months' wages, under article 43(1)(a). And a dismissal struck down on challenge costs the employer the wages for the gap, or, where return is impossible, double the end-of-service award, under article 47.

Item four: social security contributions

The employer deducts five per cent from the worker's pay for the pension branch and pays, from its own funds, twelve per cent of wages and allowances, spread across the pension, injury, unemployment and health branches, as article 14 of the 2023 social security statute sets out. Firms earning their profit from selling oil and other hydrocarbons pay a higher employer share of twenty-five per cent. For Iraqi workers the state adds eight per cent of its own; for a non-Iraqi worker that eight per cent lands on the employer too, under article 14(2)(c).

Each month's contributions must reach the fund inside the next month's first thirty days. A delay beyond one hundred and twenty days triggers a monthly penalty set as a percentage of the contribution, with a ceiling, under article 17.

Item five: costs that apply only to a non-Iraqi worker

• Work permit: article 30 of the Labour Law requires a permit from the Ministry of Labour and Social Affairs before a non-Iraqi starts work, and the minister's instructions set the charge for it.
• Entry charge: the 2023 social security statute, in article 106, adds a separate "work charge" payable by the employer per non-Iraqi worker brought into the country, which the pension fund collects.
• Ticket home and repatriation: where the employer paid to bring the worker over, it also pays the journey back, except when the worker walked out before the term without good cause; it also bears the preparation and transport of the body if the worker dies and the family asks, under article 32.
• Housing and financial capacity: the 2026 instructions on foreign workers ask the employer to show the money to pay the wage, and inspection committees confirm that accommodation, meals and working conditions are adequate, under articles 2 and 3.
• Contract language: article 9 of those instructions calls for a bilingual contract, Arabic plus English or the worker's own language.

Item six: administrative duties that carry a cost

Article 17 of the 1982 income tax statute (Law No. 113) makes the employer deduct employees' income tax at source and hand it to the tax authority, the General Commission for Taxes. There is a payroll and overtime register to maintain and gives the worker an itemised pay statement with each payment, under articles 59 and 61 of the Labour Law. It also provides health and safety measures at the workplace, under article 41(2).

The office follows these provisions from Baghdad, al-Yarmouk.

Legal basis and sources

1. Labour Law No. 37 of 2015, articles 30, 32, 43–45, 53, 62, 71 and 74–80, 87 (Iraqi Official Gazette, issue 4386 of 9/11/2015)
2. Workers' Pension and Social Security Law No. 18 of 2023, articles 14, 17 and 106 (Iraqi Official Gazette, issue 4734 of 28/8/2023)
3. Instructions No. 1 of 2026 on the recruitment, employment and work permits of foreign workers (Iraqi Official Gazette, issue 4863 of 30/3/2026)
4. Income Tax Law No. 113 of 1982, article 17

Frequently asked questions

Related topics and articles

• 01An employer’s duties to staff in Iraq, arranged by when they fall dueA timeline of the private-sector employer’s legal duties in Iraq: before hiring, on every payday, every working day, every year, and when the job ends, with the articles behind each.
• 02The employer's duties in workers' social securityEmployer duties under Law No. 18 of 2023: yearly particulars, payment time limits, clearance, contractors and work injury.
• 03Instructions No. 1 of 2026 on the recruitment, employment and work permits of foreign workersA reading of Instructions No. 1 of 2026: applications, committees for three or more workers, cancellation and training.
• 04End-of-service entitlements under Labour Law No. 37 of 2015The end-of-service gratuity under Labour Law 37/2015: the two-week formula, the statutory exceptions, and how it differs from benefits under Law 18/2023.
• 05Which labour and social-security rules apply in the governorates and in the Kurdistan Region?The reach of Labour Law 37/2015 and Law 18/2023 in the governorates not organised in a region, and how work is organised in the Kurdistan Region.

Always check the text in force and its amendments in the official source.

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