Rivermate | Iraq flag


Benefits and Entitlements Overview

Learn about mandatory and optional employee benefits in Iraq

Mandatory benefits

In Iraq, the labor law mandates a specific set of benefits that employers must provide to their employees. These benefits are designed to ensure worker well-being and offer financial security.

Employees in Iraq are entitled to a minimum of 21 days of paid annual leave per year of service. This entitlement increases to 30 days for employees engaged in physically demanding jobs or working with hazardous materials. Additionally, after five years with the same company, workers receive a bonus of two additional paid leave days for each year of service.

Iraqi employees are also eligible for 30 days of paid sick leave per year of service, with a maximum of 180 days in total. New mothers are entitled to 14 weeks (72 days) of fully paid maternity leave.

Iraqi law also provides for additional leave in specific situations, including bereavement leave, marriage leave, and leave to care for a sick child under the age of six (up to 3 days, unpaid).

Social Security Contributions

Employers in Iraq are required to contribute to a social security program on behalf of their employees. This contribution typically amounts to 12% of the employee's salary. The oil and gas industry is an exception, with employers required to contribute a higher rate of 25% of the employee's wage.

Additional Considerations

Iraqi labor law also mandates a probationary period, minimum notice period for termination, and severance pay under specific circumstances.

Optional benefits

In Iraq, many employers go beyond the mandatory benefits to offer additional perks that can attract and retain top talent. These optional employee benefits can range from financial incentives to health and wellness programs, and work-life balance benefits.

Financial Benefits

  • Profit Sharing: Employees may be incentivized with a portion of the company's profits based on their performance.
  • Performance Bonuses: Bonuses might be granted based on individual or company-wide performance metrics to motivate the achievement of specific goals.
  • Meal Allowances: Some companies provide daily or monthly meal allowances or vouchers for designated restaurants to offset lunch costs.
  • Transportation Allowances: Especially in larger cities, companies may offer transportation allowances to help employees commute or subsidize company-provided transportation.

Health and Wellness Benefits

  • Private Health Insurance: Employers might offer comprehensive private health insurance plans beyond the mandatory coverage.
  • Wellness Programs: Companies focused on employee well-being may offer on-site fitness facilities, gym memberships, or health screenings.
  • Employee Assistance Programs (EAPs): Confidential counseling and support services for personal or work-related issues can be a valuable benefit.

Work-Life Balance Benefits

  • Flexible Work Arrangements: Modern companies may offer flexible working hours, remote work options, or compressed workweeks to promote a healthy work-life balance.
  • Additional Paid Time Off: Extra paid vacation days, sick leave, or personal leave days beyond the legal minimum might be provided by employers.
  • On-site Amenities: Amenities such as child care facilities, laundry services, or prayer rooms can ease employee burdens and enhance convenience.

This list is not exhaustive, and the specific benefits offered will vary depending on the company size, industry, and location.

Health insurance requirements

In Iraq, health insurance requirements for employees are continually evolving. Currently, health insurance is mandatory for all Iraqi government employees. Additionally, the recently enacted Health Insurance Law requires all resident foreign expats to obtain approved health insurance from licensed providers.

Mandatory Coverage for Specific Groups

  • Government Employees: Health insurance is mandatory for all Iraqi government employees.
  • Foreign Expatriate Workers: The recently enacted Health Insurance Law requires all resident foreign expats to obtain approved health insurance from licensed providers.

It's important to note that the law doesn't specify a deadline for implementing a public health insurance program for the general population.

Employer Contributions

  • Social Security: Most companies in Iraq contribute 12% of an employee's salary to social security, which partially covers health insurance and work injuries.
  • Oil and Gas Industry: Employers in the oil and gas sector contribute a higher rate (25%) towards employee social security benefits.

The Iraqi health insurance system is evolving. While mandatory coverage currently applies to government employees and foreign expats, employers contribute towards social security, which partially covers health insurance for most employees.

Retirement plans

Iraq's retirement system is bifurcated into two main segments, catering to public and private sector employees.

Public Sector Pensions

The State Pension System (SPS) provides retirement benefits to government employees, military and security personnel, and those employed in state-owned enterprises. This system operates on a defined-benefit basis, implying that the pension amount is predetermined and calculated based on factors such as salary and years of service.

  • Eligibility: The retirement age for public sector workers in Iraq ranges between 50 and 63 years old, contingent on their years of service. For instance, an individual with 30 years of service can retire at any age, while someone with 20 years of service can retire at 60.
  • Contributions: Public employees contribute 10% of their salary towards their pension, with the government contributing the remaining 15%.
  • Benefits: The pension amount is calculated by multiplying the average salary of the employee's three highest-earning years by a percentage based on their years of service (2.5% per year). There's also a minimum pension threshold set by the government to ensure a basic standard of living for retirees.

Private Sector Pensions

The Social Security System (SSS) covers Iraqi employees working in the private sector. Similar to the public system, it's a defined-benefit plan with contributions and benefits determined by regulations.

  • Eligibility: Specific eligibility requirements for private sector pensions, such as retirement age and minimum service years, are currently limited.
  • Contributions: Employers contribute a higher percentage (20%) towards private sector employee pensions compared to the public sector (though 8% is covered by the state for Iraqi nationals). The remaining contribution comes from the employee's salary (specific percentage not publicly available).
  • Benefits: Details regarding the calculation of pension benefits for private sector employees are scarce. However, they are generally lower than those offered in the public sector.
Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.