Your quick guide on talent and labor compliance norms in Iraq
Iraqi Dinar (IQD)
Arabic and Kurdish
GDP per Capita
Iraq is one of the easternmost nations in Asia. It is rich in petroleum reserves and is the world’s fourth-largest petroleum producer. The economy of Iraq is largely dominated by the oil sector, which provides around 92% of its foreign exchange earnings. Textile, chemicals, and leather are a few other industries that are prominent in Iraq. Iraq’s GDP fell sharply due to the Covid-19 pandemic. However, in 2021 and 2022, as oil prices surged, Iraq’s GDP witnessed a surplus of 8.3%, bringing it up to the 51st position in the global GDP rankings.
Major economic hubs:
Baghdad, Basrah, Al Mawsil Al Jadidah, Al Basrah Al Quadimah
Skills in demand:
Finance, Supply Chain, Marketing, Production, English Language Training
|Job Title||Average Monthly Salary (in IQD)||Average Monthly Salary (in USD)|
|Business Development Manager||3,350,000||2,560|
Payroll in Iraq is released on a monthly basis.
The minimum wage in Iraq varies from IQD 250,000 to IQD 350,000.
The standard working hours in Iraq are 8 hours per day and 48 hours per week. The overtime pay is set to 150% over base pay.
There is no statutory law for the 13th-month pay in Iraq.
Employers can provide their employees with additional benefits upon mutual discussion. Some of these benefits may include
Income tax in Iraq ranges from 3% to 15%, depending on the annual income.
|Annual Income||Tax Rate (%)|
|0 – 250,000||3%|
|250,001 – 500,000||5%|
|500,001 – 1,000,000||10%|
There is no VAT in Iraq; however, sales tax is levied on certain goods and services, and it ranges from 10% to 300%, depending on the nature of the goods.
Offboarding & Termination
Employment in Iraq can be terminated both by the employee and the employer. The employer can terminate the employment on substantial grounds. If the employment is terminated without any grounds, the employer must pay a severance to the employee. An employer may also terminate the contract during the probation period (three months), in this case, the notice given will be only seven days. If the employer/employee terminates the employment without a notice, then the other party will be entitled to compensation amounting to the salary of 30 days.
A 30-day notice is mandatory for both permanent employees and employees on probation.
Severance pay in Iraq is set to 2 weeks’ pay for every year of service.
Visa and Immigration
Non-Iraqi employees must obtain a work permit before being employed in Iraq. This permit is valid for one year at a time and can be renewed one month before the expiration date. Non-citizens must show proof of employment before applying for a work permit in Iraq.
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