Iraq HR Information

Updated on: 2025/08/05 15:25 (UTC)

Overview

Employment in Iraq is governed by the Labor Code, which was amended in 2016 to incorporate the standards of the International Labor Organization.

Hiring

Employment Contracts

An employment agreement must be drawn up in writing and include at least the following information:

• name of the employer and type and address of the enterprise;
• name, date of birth, qualifications, profession, residence and nationality of the worker;
• nature, type, duration and date of commencement of the work;
• wages and other allowances due to the worker;
• date and method of payment and
• working hours.

Although employers and employees are generally free to agree to the terms on which employment is offered, Iraqi law imposes a number of obligations, rights and protections that may override the terms of the contract. These may apply even if the parties have agreed that the laws of an alternative country should govern the contract of employment.

Iraqi labor law makes it unlawful for a worker to:

• divulge, even after ceasing employment, any secret knowledge gained through work;
• keep outside the workplace any document or paper relating to work;
• perform work for a third party during working time;
• use a machine or a device he or she has not been assigned to use;
• show up for work intoxicated or under the influence of drugs;
• carry a weapon in the workplace unless the work requires it;
• contract for a loan from agents or business people with whom the employer has a contractual relationship or
• arrange for meetings on workplace premises without the permission of the employer or of the competent trade union body.

Contract language. The Labor Code provides that Arabic or Kurdish must be used in all employment documents, including contracts and records. No one relying upon a document drawn up in another language may prevail in a claim against a worker, even if the document bears the worker’s signature. In practice, it is uncommon for expatriates (foreign nationals) working in Iraq for foreign companies to have concluded employment contracts in either Kurdish or Arabic.

Probation. Employers are permitted to include a probationary period in an employment contract. The maximum period is three months, and probation cannot be extended. Employers must provide seven days’ notice prior to dismissing an employee during the probationary period.

Fixed-term contracts. Fixed-term contracts are limited to a one-year duration and are renewable one time only.

Restrictions on Hiring

Minors 15 years of age and older may be employed in day work, minors 17 years of age or older in day work, night work and overtime work.

Employers cannot employ anyone under the age of 18 in any type of work that may lead to occupational or contagious disease or to serious contamination or that presents a danger to the life, morality or health of the person engaging in it.

Recordkeeping

Employers are required to keep a file on each worker recording any change in work duties, wages, allowances, penalties or other work conditions. The file must be kept for at least two years after the end of the employment relationship.

Background Checks

The labor code contains no provisions governing background checks.

Noncompetition Agreements

Post-employment restrictive covenants are permitted in Iraq if:

• the restriction is limited in time, place and kind of work only to the extent necessary to protect the lawful interests of the employer;
• there is no unfair effect on the worker’s future earning potential and
• the contract provides for compensation proportionate to the restrictions it imposes.

The restriction is invalidated following termination without cause or if the employer breaches the employment contract.

Reference Citations

Employment Contracts: Labor Law of 2015, arts. 16, 37-38

Restrictions on Hiring: Labor Law of 2015, arts. 30, 95-96

Recordkeeping: Labor Law of 2015, art. 41

Immigration and Work Permits

In General

To obtain a visa for a foreign worker, the employer must first get permission from the government to hire the individual. Following approval, a temporary visa will be issued pending the individual’s application for residency.

Visas and Work Permits

According to the Labor Code, “no foreign worker may be engaged before having received a work permit in accordance with the requirements and procedures laid down in directives issued by the Minister of Labor and Social Affairs.” To obtain a visa for the foreign worker, the employer must first get permission to hire the individual, which entails submitting a request to the state department with which it has a contract in place (e.g. if the employer is an oil company with a contract with the Ministry of Oil, the request has to be submitted to the MoO). The ministry will then forward the request to the Residency Department, Directorate of Public Travel and Nationality of the Interior Ministry for approval.

Once the approval is granted, the employee is able to enter the country, but there are further documents that must be submitted to the authority to get the requisite visa stamped into the employee’s passport. These include all relevant materials relating to the person who is authorized to follow up on the paperwork on behalf of the employer with the immigration authority plus the documents relating to the employee, such as a request for the visa, guarantee from the authorized person, blood test, passport copy, a copy of the visa which was received by the employee at the airport upon his or her arrival, proof of address in Iraq, clearance certificate and Arab and Foreigners arrival card.

The visa required for entering Iraq in order to work is a business visa, of which there are three types:

• Regular: This is a three-month entry visa that allows the individual to enter the country and grants 10 days’ temporary residence, during which the worker must visit the Residency Department, undergo a blood test and apply for residency in Iraq. This visa is normally granted to workers who plan long stays in Iraq.
• Multiple: This is a three- to six-month entry visa that allows the individual to enter the country more than once during the visa period and is normally granted to managers or key personnel in a company.
• Visiting: This is a one-month visa granted to experts or to home-country managers who come to sign a contract or attend a meeting and leave. The entry visa is obtained either outside Iraq through an Iraqi embassy or inside Iraq through the Directorate of Residency at the Ministry of Interior. Both ways require the visa applicant to be sponsored and his or her entry justified. A blood test is also required from a designated hospital with the results sent directly to the Residency Department. Once the entry visa is obtained from the Residency Department, a copy will be provided to the individual who must bring it when traveling to Iraq. The entry visa will contain the name, passport number and the entry point of the individual.

Kurdistan region. The visa and residency permit requirements are different for foreign nationals entering and working in the Kurdistan Region. Unlike other parts of Iraq, certain foreign nationals from the European Union, the U.S., Canada and Australia may obtain a visa upon arriving in Kurdistan, although it should be noted that an entry visa and residency permit issued by the Kurdistan Regional Government does not permit entry or residence in Iraq outside Kurdistan.

The residency permit procedures for Kurdistan have become more streamlined following the issuance of new instructions by the Kurdistan Region Residency Department. According to these new instructions, all foreign national applicants except Iranians will be able to obtain a residency permit for Kurdistan if they submit the following documents to the residency office:

• blood test results,
• a personal guarantee from an Iraqi citizen resident in Kurdistan,
• company registration documents,
• tax clearance and
• copy of passport and color photo.

The Residency Office will write a letter to the security office and within seven working days of a response issue the residency permit. Residency permits are generally valid for one year and effectively function as a work permit.

Post-Entry Requirements

Upon arrival in Iraq, the individual is granted 10 days’ residency (entry permit), during which time the worker must visit the Residency Department to renew residency for another 10 days or to obtain a longer residency permit, which can be for three months on first issuance and for six to 12 months in successive renewals. This process generally takes about two months. Before leaving the country, the employee must obtain an exit visa. If an individual is not able to personally visit the Residency Department, a legal representative can conduct the application process.

Foreign nationals who receive a letter of approval (LOA) for visas to Iraq must arrive in the country within 90 days of the date of issue of their LOAs. Failure to arrive in Iraq within the 90 days will result in their LOA being canceled, requiring a new LOA to be issued.

Employers sponsoring foreign workers must cover the cost of returning the employee to his or her home country after employment ends unless the worker resigns unlawfully.

Penalties

The labor code provides that any person or entity violating the provisions of the code related to the employment of foreigners will be subject to imprisonment for a period of one to six months and to a fine.

Reference Citations

Visas and Work Permits: Labor Law of 2015, arts. 30-31

Post-Entry Requirements: Labor Law of 2015, art. 32

Penalties: Labor Law of 2015, art. 24

Nondiscrimination

In General

Employees are guaranteed the right to work under equal conditions and with equal opportunity without discrimination on the basis of gender, race, ethnicity, nationality, origin, color, religion, sect, belief, or opinion or economic or social status.

The 2005 Iraq Constitution provides that Iraqis are equal before the law without distinction based on gender, race, ethnicity, nationality, origin, color, religion, sect, belief or opinion or economic or social status.

The constitution guarantees equal opportunities to all Iraqis and requires the state to take the necessary measures to achieve this objective.

Similar protections are provided in the Labor Code, which guarantees the right to work under equal conditions and with equal opportunity to all citizens able to work, without any discrimination on the basis of sex, race, language or religion.

The code also prohibits sexual harassment in employment and occupation, whether at the level of job search, vocational training, recruitment or work conditions and terms. Sexual harassment is defined as any physical or verbal conduct of a sexual nature that affects the dignity of women and men and is undesirable, unreasonable and insulting to those who are victims of it. The code specifically prohibits threats of negative job action as a means to extort sexual favors.

The code also mandates equal wages between men and women for the same type of work.

Reference Citations

Nondiscrimination: Labor Law of 2015, arts. 4, 8-9, 45

Employee Privacy

Employee Data

Iraq does not have a general data protection law, but the Iraqi Constitution recognizes the right to privacy as balanced with other people’s rights and public morals.

Employee Monitoring and Surveillance

Iraqi law does not address monitoring and surveillance of workers.

Reference Citations

Employee Data: Iraq Constitution

Compensation

Hours of Work

According to the Labor Code, the maximum hours an employee can work are eight per day or 48 per week, subject to certain exceptions.

The number of hours of work per day must be reduced for duties considered arduous or harmful to health.

For work performed in two shifts and for intermittent work, the worker must not be required to be present at the workplace for more than 10 hours, and the number of hours of actual work is still limited to eight per day.

The Labor Code also defines what are considered standard work shifts, dividing work into day work (performed between 6 a.m. and 9 p.m.), night work (performed between 9 p.m. and 6 a.m.) and mixed schedule work, which is performed in a period which spans the hours of both day and night work. In the latter case, no more than three hours may be performed as night work. Working hours are not to exceed seven hours of night work or seven and a half hours of mixed schedule work.

Under Iraqi law, every worker has a right to at least one paid day of rest per week. For most workers in Iraq, the day of rest is taken on Friday and the working week is Saturday through Thursday. For some Christian workers, the day off could be Friday, Saturday or Sunday, depending on the employer and the job. For government employees, the work week is Sunday through Thursday with Friday and Saturday off. Some private sector companies follow the government workweek.

Daily working hours must include one or more rest periods of between 30 minutes and one hour to allow workers to eat their meals and to rest. These rest periods must be arranged by the employer in such a way that no period of work lasts more than five consecutive hours. Workers are also entitled to a rest period of not less than 11 consecutive hours between two working days.

There are no legally prescribed working hours for employees during Ramadan. In the private sector, whether or not the hours of work are in any way curtailed or limited during Ramadan is largely dependent on the type of work involved and subject to the individual employer. Most employers in Iraq do alter the hours of work for employees during Ramadan.

Minimum Wage

Effective since Jan. 1, 2018, the minimum wage in Iraq generally is 350,000 dinar per month. In the Kurdistan region, the monthly minimum wage is 285,000 dinar.

Overtime

Overtime worked during a normal working day (work performed beyond eight hours) is to be remunerated at one and a half times the normal rate of pay. Work done at night, on weekly days of rest or on holidays must be remunerated at twice the amount of normal pay. Employees working on a day of rest must be given another day of rest during the week to replace it.

Standard working hours as defined under the code may be extended in order to prevent an imminent accident or in other cases of force majeure and urgent work. The increase in the number of hours of work is to be proportional to the time necessary to address the particular situation involved. An employer may extend the working hours established under law in the following instances:

• to handle an exceptional increase in work at the time of festivals or seasonal work or for other reasons;
• to repair or maintain devices, tools and machines whose shutdown would entail cessation of work or make a great number of staff inactive;
• to avoid the deterioration of substances or products and
• to establish annual inventory and accounts, prepare for sales or open for the season.

The following provisions apply to overtime hours:

• In industrial activities which are performed in shifts, no more than one hour per day may be worked as overtime.
• In non-industrial activities, no more than four hours per day may be worked as overtime.
• In road transport, during the entire driving time, working hours including overtime hours may not exceed nine hours per day and 48 hours per week.
• No worker may be employed for more than 40 hours of overtime during a 90-day period or 120 hours during a 12-month period.

Wage Payment

Wages must be paid at least once a month at the place of work or a nearby office and must generally be paid in Iraqi dinar.

Employees are entitled to receive a statement of pay and deductions with each payment of wages and salary, itemizing total wage payment and how much tax, national insurance, pension contributions and other deductions have been withheld.

An employer cannot deduct any amount from an employee’s salary unless that deduction is authorized by law or by the employee in writing at the time of the proposed deduction or in advance as a term of the contract of employment.

Mandatory Bonuses

Iraq does not require the payment of any bonuses. If an employer does decide to provide a bonus, it must ensure equal treatment for employees in equivalent situations.

Reference Citations

Hours of Work: Labor Law of 2015, arts. 66-70

Minimum Wage: Decision on Minimum Wage, Iraq General Secretariat for the Council of Ministers (Arabic)

Overtime: Labor Law of 2015, art. 71

Wage Payment: Labor Law of 2015, arts. 57-59

Mandatory Bonuses: Labor Law of 2015, art. 41

Benefits

Vacation

Under the Labor Code, the annual leave entitlement is 21 days for each year of work. Leave is increased by two days for each additional five years’ work for the same employer.

Employees engaged in work considered arduous or harmful to health have the right to 30 days’ paid leave for each year of work (work that is “arduous or harmful to health” is defined as any work with poisonous materials and any work that might damage the worker’s lungs or involve exposure to high temperatures).

A worker has the right to proportional leave in relation to any fraction of a year worked. An employer may, in case of necessity and upon the worker’s request, grant unpaid leave.

The contract between the employer and the employee will dictate whether annual leave is granted immediately or accrued over time.

Employers are obliged to allow employees to take all of their leave at once, although the leave may also be divided up if the necessities of the work and the interest of the worker so require. In such a case, at least 14 continuous business days of leave must be taken at one time. The remaining leave must be granted in accordance with agreed procedures and within no more than 18 months after the performance of the work.

An employee must be paid the wages due for the period of annual leave at the time the leave is granted. Any agreement under which an employee partially or totally waives the right to take annual leave in return for compensation or for any other reason is legally null and void.

In case of termination of employment for any reason, the compensation for days of annual leave not yet taken must be paid to the employee on the basis of the last wages payable.

Holidays

Employees are entitled to leave with full pay for the following 13 public holidays, the dates for some of which vary year to year according to the lunar calendar:

• Jan. 1: New Year’s Day
• Jan. 6: Iraqi Army Day
• May 1: Labor Day
• Eid Al-Fitr (end of Ramadan, 3 days)
• Eid Al-Adha (Festival of Sacrifice, 4 days)
• Islamic New Year
• Ashurah
• Mawlid Al-Nabi (Prophet’s Birthday)

Kurdistan recognizes the following seven additional holidays:

• March 5: Uprising Day
• March 11: Liberation of Erbil City
• March 14: Mustafa Barzani’s Birthday
• March 21-23: Kurdish New Year, Spring Equinox
• April 9: Baghdad Liberation Day
• Dec. 25: Christmas Day

Employers can require employees to work on a holiday under certain circumstances, but in such cases the workers should receive double their wages or a day off in lieu. Following are acceptable reasons for requiring employees to work on holidays:

• to handle an exceptional increase in work at the time of festivals, seasonal work or for other reasons;
• to repair or maintain devices, tools and machines whose shut-down would entail immobilizing work or making a great number of staff inactive;
• to avoid the deterioration of substances or products and
• to establish annual inventory and accounts, prepare for sales or open for the season.

An employer cannot require employees to work on a holiday if it is their rest day.

Maternity Leave

Under the Iraqi Labor Code, every woman worker is entitled to 14 weeks maternity leave at full pay. A pregnant worker may begin maternity leave eight weeks before the estimated date of delivery and may take the remaining days after delivery. At a minimum, the pregnant worker must take six weeks of leave after the delivery.

Maternity leave can be extended on an unpaid basis for up to nine months if the delivery proves problematic or more than one baby is born, which will be considered unpaid leave unless the woman is subject to social security and making contributions. A working mother may with the consent of her employer take unpaid maternity leave for up to one year to take care of her child, provided the child has not reached 1 year of age. Nursing mothers must be provided with a nursing break of up to one hour during working hours, counted as an hour of work.

The working mother on maternity leave may not be employed by another employer.

Paternity Leave

There is no statutory provision for paid paternity leave.

Sick Leave

The Iraqi Labor Code provides that for every year of work, an employee is entitled to 30 days’ sick leave paid by the employer. Sick leave may be accumulated for a total of 180 days.

When an insured worker has exhausted all paid sick leave and remains sick, the Social Security Office will reimburse the employer for wages paid beyond the 30 days’ sick leave per year provided by law.

The period of sick leave counts as actual service for all purposes under the Labor Code and other laws.

Other Leave

Marriage leave. Employees who are getting married are entitled to five days of leave to attend their wedding. Employees also receive one day off for the wedding of a son or daughter.

Compassionate leave. Employees are entitled to five days’ paid compassionate leave in the case of the death of a close family member such as a father, mother, brother, sister, child, spouse or one of the spouse’s parents.

Official leave. Employees are entitled to paid leave when performing official or public duties, voting in a government election or appearing as a witness or expert in a court hearing.

Pensions and Social Security

Men may retire with a full pension at age 60, women at age 55, with 20 years of contributions to the social insurance system. Men with 30 years’ contributions and women with 25 may retire with a full pension at any age.

Under the Pension and Social Security Law, all employers operating in Iraq are required to remit social security and pension contributions for their Iraqi employees. Social security and pension contributions are paid to the Social Security Department at the Ministry of Labor and Social Affairs.

Social security and pension contributions are made of two parts:

• Five percent of an employee’s monthly salary must be deducted and remitted to the pension branch by the employer.
• The employer must contribute an amount equaling 12 percent of the employee’s monthly salary to be distributed between the Health Insurance, Work Injuries and Pension departments.

According to the Social Security Department in Iraq (excluding the Kurdistan Region), an employer’s contribution must be 25 percent of the employee’s monthly salary if the employer is an international oil company operating in Iraq or any other company with large-scale activities such as construction.

Prior to making any payment, an employer must register with the Social Security Department of MoLSA. All employers and employees, including employees of foreign nationality, must be registered.

The Pension and Social Security Law is applicable to all Iraqi employees, except employees covered by laws and regulations of their own pensions (such as lawyers and engineers) to which the government or a professional syndicate contributes funding. According to the law, all employees working in Iraq, including non-Iraqi foreign nationals, are required to be registered with the Social Security Department. Under the current practice, foreign nationals must make contributions to the Social Security Department unless they can provide a letter from their own home countries confirming that they are making comparable social security contributions in another place. Occasionally, the Social Security Department will ask a company to provide proof that their employees are insured and covered elsewhere.

Workers’ Compensation

Workers’ compensation is included under the social security laws. The employer must contribute an amount equaling 12 percent of the employee’s monthly salary to be distributed between the Health Insurance, Work Injuries and Pension departments.

Reference Citations

Vacation: Labor Law of 2015, arts. 75-77

Maternity Leave: Labor Law of 2015, arts. 87-91

Sick Leave: Labor Law of 2015, art. 80

Other Leave: Labor Law of 2015, art. 82

Pensions and Social Security: Pension and Social Security Law, 1971, arts. 27, 29

Workers’ Compensation: Pension and Social Security Law, 1971, art. 27

Labor Relations

In General

The Labor Code guarantees employees the right to create and join unions and to strike and allows bargaining not only between formal unions and employers/employer councils, but also between individuals, groups of workers, and worker associations.

Right to Organize

The collective bargaining agreement cannot contain terms that are inferior to those contained in applicable law and no individual employment agreement may contain terms that are inferior to those contained in any collectively negotiated agreement. Employers may not refuse to negotiate when they receive a request to bargain by a union that represents 20 percent or more of the workers subject to the agreement.

An employer cannot recruit workers under the condition that they refrain from joining a labor union. Employees cannot be terminated for participating in union activities outside working hours or for seeking to represent other workers or to function as a worker representative.

Works Council

The Labor Code does not address works councils.

Dispute Resolution

Disputes must be referred to the Ministry of Labor, which will issue a decision within 14 days unless it can successfully mediate the dispute. Parties can accept all or only some of the provisions of the mediator’s recommendations. The disputed provisions are subject to arbitration, which must be concluded within two months. The arbitration decision can be appealed to the Labor Court within 14 days following the issuance of the award.

Strikes and Lockouts

If the dispute settlement procedures end without an agreement, the union or elected workers’ representatives may resort to a strike. The union must send written notification to the Labor Ministry and the employer at least seven days prior to the strike. No strike is permitted in workplaces in which the interruption of work threatens the life, safety or public health of all or some of the population.

Workers on strike must allow nonstrikers to perform their own work, although nonstrikers cannot perform the work of strikers. The employer may not replace strikers with others, whether on a permanent or temporary basis. The employer may not penalize strikers or workers who call for a strike as long as it is in compliance with the law.

Successorship Clauses

A collective bargaining agreement cannot be terminated if an enterprise is transferred in whole or in part to a new owner.

Reference Citations

Right to Organize: Labor Law of 2015, arts. 42, 147

Dispute Resolution: Labor Law of 2015, arts. 157-161

Strikes and Lockouts: Labor Law of 2015, arts. 162-163

Successorship Clauses: Labor Law of 2015, art. 156

Safety, Health and Security

In General

The Labor Code and the Occupational Health and Safety Instructions require employers to take precautions to protect employees from workplace health and safety hazards.

The Labor Code and the corresponding Occupational Health and Safety Instructions No. 22 of 1987 provide the primary legal framework governing workplace health and safety requirements in Iraq.

The Ministry of Labor and Social Affairs holds the authority to regulate implementation of and compliance with the health and safety instructions. MoLSA also has the right to inspect employer premises for compliance. Violators of the law and instructions can face penalties, including the forced cessation of operating machinery, the closure of the project facilities and premises and a fine or incarceration for up to six months. If the cause of an accident is found to be employer negligence, affected persons are entitled to compensation according to the Iraqi Civil Code and can also file criminal charges against the company in accordance with the Iraqi Penal Code.

If an accident results from force majeure or an unexpected sudden cause, the company cannot be held liable as long as it can prove that the accident was beyond its control. If the damage is caused by corporate staff, the company will be responsible and held liable for the damages unless the company can prove that it exercised the necessary care to prevent the damage or that the damage would have happened even if that care had been exercised.

The Labor Code and OHSI provide that an employer must take precautions to protect employees from workplace health and safety hazards and provide proper protection from possible dangers. These precautions include but are not limited to:

• posting instructions for proper health and safety procedures in an easily viewable location;
• providing appropriate space for employee breaks;
• providing adequate bathroom facilities for all employees;
• providing safe drinking water;
• providing first aid kits;
• providing adequate and appropriate safety equipment and tools, including proper training in the use of such equipment and tools;
• maintaining clean work facilities, including disposal of waste and any hazardous materials;
• providing appropriate fire prevention techniques, including adequate firefighting equipment and alarms;
• taking measures to secure hazardous devices, install protective barriers and isolate electrical dangers;
• quarantining all toxic substances;
• providing heavy-lifting machinery and lifting devices where necessary;
• maintaining steam boilers, compressors and related machinery and providing for their periodic inspection by the relevant authorities;
• reducing noise and providing noise-reduction equipment where necessary;
• providing adequate lighting;
• providing staircases and fencing where necessary;
• providing medical examinations for employees;
• reporting any potentially dangerous situations to the relevant authority and the National Center for Occupational Health and Safety;
• providing effective protection to employees exposed to or working with fuels and limiting release of fuel fumes in enclosed work areas;
• protecting employees from radioactive materials and
• taking measures to ensure employee mental and social health, including provision of adequate housing and appropriate transportation when necessary.

Instruction No. 14 of 1988 defines harmful and arduous work as any work with poisonous materials (exposure to toxic substances and fumes, mixing chemicals or melting and pouring lead) and any work that might damage the worker’s lungs or involve exposure to high temperatures during work. This instruction gives workers employed in harmful or arduous work additional benefits, such as 30 days’ annual leave instead of 20 days’, increases their overtime and reduces working hours.

Reference Citations

Workplace Safety and Health: Labor Law of 2015, arts. 41, 110

Termination

Termination by Employer

Under the Labor Code, an employment contract may only be terminated:

• by mutual written consent,
• on the contractual date of expiration,
• by the worker giving 30 days’ notice,
• if the worker is sick for at least six months or is incapacitated by 75 percent and has an official medical report or
• when the working conditions call for a reduction in the volume of work and notice has been given to the Ministry of Labor and Social Affairs.

There are strict rules governing permissible dismissal of an employee for cause, the only valid grounds for which are:

• employee misconduct leading to material damage;
• employee disclosure of a professional secret that damaged the employer;
• employee failure on more than one occasion to follow instructions regarding occupational safety, provided these instructions have been drawn up in writing and prominently posted or provided an illiterate employee has been orally notified of them;
• employee presence in the workplace on more than one occasion in a state of obvious drunkenness or under the influence of drugs;
• employee conduct on more than one occasion incompatible with respect for work;
• employee infliction of physical harm on the employer personally or on the employer’s representative or supervisors, whether or not at work, provided the employer has advised the labor office in the province of the incident within 24 hours of its occurrence;
• employee commission of a misdemeanor or a crime at work involving co-workers and resulting in a court verdict of guilty;
• employee sentencing by a court to imprisonment for a period of more than one year and
• employee absence from work for 10 consecutive days without reason or for 30 nonconsecutive days in a given year provided the employer has given proper warning.

An employer is required to continue to pay the employee until his or her employment is finally terminated. The law affords mechanisms for employees to appeal dismissals within 30 days.

Employers may not terminate a contract for unsatisfactory performance by the employee unless the employee has been given necessary instructions from the employer and has failed to meet satisfactory performance for a period of 30 days after having received a written warning.

Termination by Employee

A worker may unilaterally terminate a contract of employment without any advance notice in the following three instances:

• when the employer has not fulfilled one of its duties set forth in the law, labor regulations, a collective labor agreement or an individual contract of employment,
• when the employer has committed a misdemeanor or a crime against the worker or a member of his or her family either within or outside working hours or
• if there is a serious threat to the safety or health of the worker, provided the employer is aware of the danger and did nothing to eliminate it.

Plant Closings and Mass Layoffs

No provisions are included in Iraq’s labor code covering plant closings and mass layoffs.

Payment on Termination

Employees are entitled to an end of service gratuity equivalent to two weeks for each year of service performed with the employer.

Unemployment Insurance

There is no national unemployment insurance system in Iraq.

Reference Citations

Termination by Employer: Labor Law of 2015, arts. 43-46, 143-145

Termination by Employee: Labor Law of 2015, arts. 157-161

Strikes and Lockouts: Labor Law of 2015, arts. 162-163

Successorship Clauses: Labor Law of 2015, art. 156

Personal Taxes

Residency Requirements

An individual is liable for income tax if he or she spends four months or more during a tax year in Iraq and accrues income.

Taxable Income

Residents are taxed on worldwide income, nonresidents only on Iraq-sourced income. Taxable income includes any gains from commercial activity, interest, commissions, land rentals, salaries, bonuses and allowances. Salary for annual leave and expenses paid to employees for injury or death are not taxable. Pension contributions are tax deductible.

Tax Rates

The top rate of personal income tax in Iraq is 15 percent, with progressive bands of 3 percent, 5 percent, and 10 percent based on annual income:

• not exceeding 250,000 dinars: 3 percent
• 250,000 to 500,000 dinars: 5 percent
• 500,000 to 1,000,000 dinars: 10 percent
• exceeding 1,000,000 dinars: 15 percent

In Kurdistan, earnings up to 1 million dinar are not taxable, and a tax of 5 percent is imposed on any amount over that threshold.

By law, everyone working in Iraq is subject to the Iraqi social security system. Employees contribute 5 percent of their wages to the system, and employers contribute 12 percent.

Reference Citations

Residency Requirements: Income Tax Law No. 113 of 1982 as amended, art. 1(10)

Taxable Income: Income Tax Law No. 113 of 1982 as amended, art. 2

Tax Rates: General Commission for Taxes (Arabic)

Web References

In English.

Law and Regulation

Iraq Constitution

Income Tax Law

Iraqi Penal Code

Labor Law

Law 52 of 1987 on the Organization of Labor Unions

Pension and Social Security Law