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ComorosHow is salary tax worked out in Somalia?
The Federal Government issued the Income Tax Act 2025 and its Implementing Regulations, and the Ministry of Finance explained both in a manual published in November 2025. Each month the employer deducts personal income tax from the employee's salary and pays it to the Inland Revenue Directorate by the 15th of the following month.
The monthly bands for a resident: no tax on the first 100 US dollars, then 6% on the part between 100 and 500 dollars, 12% on the part between 500 and 1,500 dollars, and 18% on anything above 1,500 dollars. The bands are progressive, as the ministry's example shows: 1,200 dollars a year at 0%, then 4,800 at 6%, then 12,000 at 12%.
Example: a salary of 1,000 dollars a month. Tax is 6% of 400 = 24 dollars, plus 12% of 500 = 60 dollars, a total of 84 dollars, leaving 916 dollars net.
Are there any deductions or exemptions from salary?
The ministry's manual says plainly that no deductions are allowed from employees' income. Tax is charged on the actual gross salary, including allowances and benefits. The only exemption is the zero band on the first 100 dollars a month.
If you have more than one job, you pay tax on income above the exempt band. In other words, the zero band does not apply again with each employer.
Who is a tax resident of Somalia?
Under Article 77 of the 2025 Act, a resident is anyone with a permanent home in Somalia, a Somali citizen unless they have a permanent home abroad available for the whole year, anyone present in Somalia for 183 days or more in 12 months, or an employee of the Federal Government or a member state posted abroad.
A resident is taxed on income from anywhere in the world and can deduct income tax paid abroad on foreign income. A non-resident pays only on income from a Somali source, and their salary is taxed at a flat 18%.
Is there compulsory social security or a pension?
We found no compulsory pension or social security contribution deducted from private sector salaries in the federal Ministry of Finance documents, so the calculator does not include any social deduction.
Some large employers or organisations may run their own savings or insurance funds under employment contracts. These are not government taxes.
How are self-employment and extra income treated?
Anyone who is self-employed or has income from a side business or investments registers with the Inland Revenue Directorate. Small businesses with sales of no more than 50,000 dollars a year can register under the presumptive tax regime. People with other income pay quarterly instalments and file a return by 31 March.
Tax is also withheld at source on other income: 5% on property rent, 10% on rent of movable assets and on service fees, 5% on dividends, and 15% on capital gains and royalties.
Do the rules differ between regions?
The rules described here are those of the Federal Government in Mogadishu. Somaliland and some federal member states may apply different tax rules, and how the rules are applied in practice varies from region to region.
If you work outside the federal administration, ask your employer which authority it pays the tax to and which table it uses.
Practical tips
Because the exempt band is only 100 dollars a month, most formal salaries are taxed. If you take on a second job, remember that the exempt band does not apply twice, and you may need to file an annual return.
This calculator assumes a resident employee with one salary paid in dollars. It is not tax advice.
What changed in 2026?
- In 2026 the Income Tax Act 2025 and its Implementing Regulations 2025 apply, as explained in the Ministry of Finance manual of November 2025 and booklet of December 2025, with monthly bands of 0%, 6%, 12% and 18%.
For expats
Somalis in the Gulf, Europe and North America send large remittances to their families, and personal remittances are not taxable salary. Watch the residency rule, though: the 2025 Act treats a Somali citizen as a tax resident unless they have a permanent home abroad available for the whole year, and a resident is taxed on income from anywhere, with a credit for tax paid abroad. So someone who really lives and works in another country with a permanent home there is not a resident, while someone who moves back to Somalia becomes one. A foreigner working in Somalia pays a flat 18% as a non-resident, or the normal bands after staying 183 days or more.
Income tax rates
| Annual taxable income (USD) | Rate |
|---|---|
| 0 to 1,200 | 0% |
| 1,200 to 6,000 | 6% |
| 6,000 to 18,000 | 12% |
| Over 18,000 | 18% |
The brackets are in US dollars as set out in the Income Tax Law 2025. Monthly: 0% up to 100 dollars, 6% up to 500, 12% up to 1,500 and 18% above that. No deductions are allowed from employment income, a non-resident pays a flat 18%, and anyone under 18 pays a flat 20%.
Other taxes that matter in Somalia
Capital gains
Under the federal Income Tax Act 2025 (in force since 11 May 2025), gains on selling investment assets, meaning property, shares and stakes, are taxed. If taxable income is no more than 18,000 dollars, the income tax bands apply (0% to 18%), and any gain above that is taxed at a flat 15%. The first 100,000 dollars of gain on selling your main home is exempt. One of the examples in the ministry's manual uses a 10% rate, which conflicts with the table that sets 15%.
Dividends
Dividends paid by a resident company to a resident individual are subject to 5% withholding at source. This is a final tax and is not declared again. Another example in the official manual uses 15% withholding, which conflicts with the stated rule.
Crypto
In June 2024 the Central Bank of Somalia warned about virtual assets, saying they are not legal tender and that no provider is licensed to offer virtual asset services in Somalia. No law bans them outright, and there is no specific tax guidance on them.
Inheritance
The Income Tax Act 2025 has no inheritance tax, and the Ministry of Finance manual says a gift is not income. Estates of Muslims are divided under Islamic inheritance rules.
Property and wealth
There is no annual wealth tax at federal level. Rental income from property is subject to 5% withholding at source. We could not confirm the property charges levied by municipalities or member states.
Tax residency
Under Article 77 of the Income Tax Act 2025, an individual is resident if they have a permanent home in Somalia, are a Somali citizen without a permanent home abroad available for the whole year, are present for 183 days or more in any 12 months, or are a government employee posted abroad. A resident is taxed on worldwide income. We found no published official procedure for getting a tax residency certificate from the Inland Revenue Directorate. Somaliland applies a separate tax system that this Act does not cover.
Retirement and pensions
We could not confirm any compulsory pension scheme for the private sector. A resident is taxed on worldwide income, and the official registration form lists foreign income, including pensions, as income to declare. There is no retirement visa.
Cost to the employer
We could not confirm from an official source any compulsory social security contributions for private sector employers. Secondary sources say there is no compulsory private sector pension scheme, and the employer's only confirmed duty is to withhold payroll tax and pay it over.
Social insurance
There are no mandatory social insurance contributions on employees in the standard case.
Work out your own pay in Somalia
Instant result, monthly and yearly, with every deduction itemised.
Common questions about taxes in Somalia
How much is salary tax in Somalia in 2026?
For a resident, per month: 0% up to 100 dollars, 6% up to 500, 12% up to 1,500 and 18% above that, applied progressively. A salary of 1,000 dollars pays 84 dollars a month.
Do foreigners pay more tax in Somalia?
A non-resident pays a flat 18% on the whole salary, with no exempt band. A foreigner who becomes resident, for example by staying 183 days in 12 months, pays the normal bands.
Is there a tax-free allowance in Somalia?
Yes. For a resident, the first 100 dollars a month, or 1,200 dollars a year, is exempt. There are no other deductions from salary.
Is social insurance deducted from salaries in Somalia?
We found no compulsory social contribution on private sector salaries in the federal Ministry of Finance documents, so the calculator does not deduct one. Your employer may have its own fund under your contract.
Do Somalis living abroad owe tax in Somalia?
A citizen is treated as resident unless they have a permanent home abroad available for the whole year. Someone who really lives abroad with a permanent home there is not resident, so they are taxed only on income from a Somali source.
When does the employer pay salary tax in Somalia?
The employer deducts it from salaries every month and pays it to the Inland Revenue Directorate at the Ministry of Finance by the 15th of the following month, under Article 90 of the 2025 Regulations.
Which currency is Somali income tax worked out in?
The band limits in the 2025 Act are set in US dollars, the currency most formal salaries are paid in, so the calculator shows results in dollars.
Do employees in Somalia have to file a tax return?
Not if their income comes from one job, because the employer deducts the tax. Anyone with more than one job in the year, or income from a business or investments, must register and file a return by 31 March of the following year.
Sources
- Federal Ministry of Finance: Income Tax Manual for the 2025 law and its regulations (November 2025) Official source · checked 2 October 2026
- Ministry of Finance: booklet on the Income Tax Law and Regulations 2025 (in Somali, December 2025) with a worked example Official source · checked 2 October 2026
- Income Tax Law No. 37 (Sh.Lr.37), scanned copy on the Ministry of Finance website Official source · checked 2 October 2026