Taxes on salaries in Iraq 2026

How is income tax on salary worked out in Iraq?

Income tax is governed by Income Tax Law No. 113 of 1982, as amended. Start with your annual salary, subtract your social security contribution, then the personal allowance: 2.5 million dinars for a single person, or 4.5 million if married, plus 200,000 dinars for each child with no income of their own.

The annual bands then apply to what is left: 3% on the first 250,000 dinars, 5% on the next 250,000, 10% on the next 500,000, and 15% on everything above 1 million dinars. Because these thresholds are so low, most of the taxable income of people on average salaries is taxed at 15%.

Example: a single person earning 1.5 million dinars a month, or 18 million a year. Social security is 900,000 and the allowance is 2.5 million, leaving 14.6 million taxable. The tax is 2.11 million dinars a year, or about 176,000 dinars a month.

How much social security comes off your salary in Iraq?

A private sector employer deducts 5% from the pay of a worker covered by social security and pays a further 12% itself. The worker's contribution is deducted from income before income tax is worked out.

The Workers' Retirement and Social Security Law No. 18 of 2023 was issued to govern social security for private sector workers. We could not reach the official text to check whether it changed the contribution rates or added a pay ceiling, so we use the rates in the PwC summary updated in 2026, and will update this page once we have checked the text.

State employees come under the Unified Retirement Law and a different pay system, and are outside the scope of this calculator.

Has salary tax in Iraq changed for 2026?

We found no change to the income tax bands or allowances for 2026 in the sources available, and the PwC summary updated in June 2026 says there were no significant developments in individual taxation over the past year.

However, the websites of the General Commission for Taxes and the Iraqi legislation database were not available to us when we checked, so we cannot rule out instructions or provisions in the federal budget laws that affect salaries. Treat the figures here as estimates, and check your payslip or with the Commission to be sure.

What is different in the Kurdistan Region?

The Kurdistan Region collects tax on the salaries of people working there through its own institutions, and the instructions and rates it applies may differ from federal Iraq. We have not checked the Region's rules, so this calculator applies the rules of federal Iraq only.

If you work in Erbil, Sulaymaniyah or Duhok, rely on the payslip from your employer to see the tax actually deducted.

How and when is the tax collected?

Iraq uses direct withholding. The employer deducts tax from the salary every month, files a monthly statement with the direct withholding section of the General Commission for Taxes, and pays the amounts over within the first 15 days of the following month.

At the end of the year the Commission reconciles the annual tax due with the total withheld each month. Family allowances only apply once supporting documents are submitted. Otherwise the employee is treated as single.

Foreigners and Iraqis moving back

All income earned in Iraq is taxable, whatever the residence of the person receiving it, so a foreign employee working in Iraq pays the same bands. If the employer provides housing, that benefit is treated as extra income and added to salary.

An Iraqi who comes back from abroad to work in Iraq pays tax on their local salary from the first month, and gets the family allowances once they submit their documents.

Practical tips

Give your employer your marriage certificate and your children's birth certificates straight away. The difference between the allowance for a single person and for a married person with two children is 2.4 million dinars of taxable income, which saves about 360,000 dinars in tax a year.

Make sure you are registered for social security. Your 5% contribution lowers your tax because it is deducted from taxable income, and it protects your pension rights.

For expats

Iraqis in Turkey, Germany, Sweden, the Netherlands and the Gulf pay the taxes of the country where they live and work on their salaries there, while Iraqi income tax applies to income earned in Iraq. The tax burden on salaries in Iraq is low compared with Europe: the top rate is 15%, plus 5% social security, while Germany and Sweden charge much higher taxes and contributions, which you can compare on the pages for those two countries. Anyone living in Iraq and working remotely for a foreign company should check their position with the General Commission for Taxes, because the rules here assume a salary from a local employer that withholds the tax.

Income tax rates

The brackets are annual and apply to income after the social security contribution and allowances are deducted. The bracket limits are very low (1 million dinars a year), so most of a typical private sector salary is taxed at 15%. These figures are confirmed by a secondary source only.

Other taxes that matter in Iraq

Capital gains

Income Tax Law No. 113 of 1982 does not tax gains on selling shares unless the person trades shares and bonds as a business, in which case the gains form part of taxable income at the normal bands. Property sales are taxed under Decision No. 120 of 2002 of the dissolved Revolutionary Command Council at a flat rate on the assessed value of the property or the price, whichever is higher, not on the gain: the first 20 million dinars is exempt, then 3% up to 30 million, 4% up to 60 million, 5% up to 90 million and 6% above that. Gifts between parents and their children and between spouses are exempt. This follows the text published on the General Commission for Taxes website, and we have not checked for later changes to the amounts.

Dividends

Dividends are not taxable income for the shareholder if the company has paid tax on its income or was entitled to deduct it, under Articles 2 and 15 of the Income Tax Law. The law also exempts interest on individuals' deposits and accounts at Iraqi banks and savings funds.

Crypto

We could not reach an official text from the Central Bank of Iraq setting out the legal status of cryptocurrencies, and the Income Tax Law has no specific provision on gains from them.

Inheritance

We found no inheritance tax in force in the General Commission for Taxes sources. The law only makes heirs pay any income tax the deceased still owed, out of the estate. The secondary PwC summary gives an inheritance tax table from 3% to 6% after a 20 million dinar exemption, but it matches the property transfer tax table in Decision 120 of 2002, which does not list transfer by inheritance among the taxable transactions, so we could not settle the point. For Muslims, estates are divided under the Islamic inheritance rules in the Personal Status Law.

Property and wealth

There is no wealth tax. Property tax under Law No. 162 of 1959 is 10% of the annual rent of a let property after a 10% deduction for maintenance, so the owner effectively pays 9% of the annual rent, and it can be paid in two instalments. Vacant land is subject to a separate tax on empty plots under its own law.

Tax residency

Under Article 1 of the Income Tax Law, an Iraqi is resident if they live in Iraq for at least 4 months in the year, or if they are only temporarily absent and have a permanent home and main place of work in Iraq. A foreigner from a non-Arab country is resident if they live in Iraq for 6 months in total or 4 months in a row, or work for a legal entity in Iraq however long they stay. A resident Iraqi is taxed on income from inside and outside Iraq, while a resident foreigner is not taxed on income arising outside Iraq. The rules may differ in the Kurdistan Region, and we have not checked them. We could not confirm the procedure for getting a tax residency certificate from an official source. The body responsible for tax treaties is the General Commission for Taxes.

Retirement and pensions

The Income Tax Law (Article 7) exempts pensions, retirement bonuses and end-of-service pay for retirees and their heirs. We found no retirement visa for foreigners. A resident foreigner is not taxed on income from outside Iraq, while a resident Iraqi is in theory taxed on income from abroad, and we found no specific provision on foreign pensions.

Cost to the employer

According to the secondary PwC summary, the employer pays 12% and the worker 5% of pay after some allowances are excluded, for both Iraqi and foreign workers, and the share rises to 25% for some classes of employer. The Workers' Retirement and Social Security Law No. 18 of 2023 has been issued, but we could not reach its text or the Ministry of Labour website to confirm the rates and ceilings that apply in 2026.

Social insurance

Sources

1. PwC Worldwide Tax Summaries: Iraq, taxes on personal income (secondary source, brackets of 3% to 15%) Secondary source used to cross-check · checked 2 October 2026
2. PwC Worldwide Tax Summaries: Iraq, deductions (secondary source, allowances and deductibility of social security contributions) Secondary source used to cross-check · checked 2 October 2026
3. PwC Worldwide Tax Summaries: Iraq, other taxes (secondary source, social security 5% and 12%) Secondary source used to cross-check · checked 2 October 2026
4. PwC Worldwide Tax Summaries: Iraq, tax administration (secondary source, monthly withholding and payment within 15 days) Secondary source used to cross-check · checked 2 October 2026
5. Central Bank of Iraq: US dollar rate of 1,310 dinars Official source · checked 2 October 2026