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Overview
Iraq is a West Asian country with borders to other six countries and the Persian Gulf. The region is what once was called Mesopotamia, one of the firsts civilizations, that gave rise to some of the world's earliest cities and developed the concepts of mathematics, metric and writing systems, law codes, timekeeping and more.
The main strength of Iraq is its oil sector, with the world's fifth-largest oil reserves, at approximately 145 billion barrels. That represents roughly 8% of global reserves in a country with 434,128 square kilometers of area. Despite all that, other industries such as energy, construction and agriculture are growing by the minute. The economy is forecasted to grow at a 5.4% rate per year between 2022 and 2024. With some long term political challenges, Iraq has a Human Development Index (HDI) of 0,674 (121th in the world) a metric that is just under the regional average considering neighboring countries. As far as literacy goes, the rate is improving but is still far from ideal with a 79.75% rate in 2022.
On the other hand, the Gross Domestic Product (GPD) of USD$207.9 billion in 2021 is expected to grow by almost 10 percent by 2027. Iraq also has a big population of English speakers of roughly 11 million people, representing 35% of the country. That shows that Iraq is recovering from past political crises and has the potential to be a great place for organisations to set up operations and hire new employees.
| Capital | Baghdad |
| Languages spoken | Arabic and Kurdish |
| Population size | 41.2 million |
| Payroll frequency | Monthly |
| Currency |
Iraqi Dinar (IQD) |
| VAT |
VAT of 5% on Goods and Services / 20% of mobile recharges and internet / 15% on cars and travel tickets / 10% on tourism related sales / 300% on alcohol and tobacco
|
Payroll and taxes in Iraq
The main difference about taxes in Iraq is that all income derived from Iraq is subject to tax regardless of the residence of the recipient. Also, income received outside the country by Iraqi and other residents are taxable if they arise from deposits or transactions held in Iraq.
Employer contributions in Iraq
In Iraq, companies are obliged to contribute to Social Security. In most cases, the rate is 12% of the employee salary directly to cover for health insurance, work injuries and a collective pension. The only exception is for companies in the oil and gas industry that have to contribute 25% of the workers wage.
Apart from the Social Security contribution, there is a withholding tax for non-resident companies of 15% on interest. That means that when a foreign organisation is bound to receive money in Iraq, 15% of the amount is classified as corporate income tax and withheld by the government.
Employee contributions
Regarding employees, there’s only one contribution, which is to Social Security. The rate is 5% of gross salary for all workers.
Personal income tax
As mentioned before, residents and non-residents of Iraq are subject to tax if their income is derived from the country.
All Iraqis are considered residents in order to be taxable. There are two ways for a non-Iraqi to be considered resident for tax purposes:
- Live or reside in Iraq for a total of six months during a tax year
- Live or reside for four consecutive months in the country
Taxable income
All tax residents can claim personal allowances, and these sources of income are considered taxable, unless in a few cases.
See below for the tax rates applicable to the individual employee’s montly income in Iraq:
Minimum Wage in Iraq
The minimum wage is set at 250,000 IQD monthly which corresponds to 214 USD. This rate is ongoing since it hasn’t been revised since January 1st of 2015. The average salary in Iraq is close to 1.7 million IQD each month, corresponding to an annual salary of 20,8 million IQD which correlates to 14,300.000 USD salary per year.
Employee Benefits in Iraq
According to employment law in Iraq the major part of employee benefits come from Social Security. It covers work accidents, sicknesses and a collective pension. Apart from that, the other benefits include different kinds of leave the employee can take for specific situations. See them listed and discussed below:
Attracting talent in Iraq
Funding an operation in Iraq can be challenging. Being isolated from the rest of the world for so many years, there are many obstacles when the objective is to attract and retain the best talent possible in the country. Especially for companies in industries such as oil, gas and energy, Iraq's highly competitive labour market can demand more from organisations and its human resources departments.
Improve employees' upskilling programs
A lot of international companies entering Iraq have found it difficult to find workers with key skills that are in demand with international business needs.
Skills such as sales, marketing, customer service, performance and time management could be improved. Therefore, providing upskilling courses and programs that enable workers to improve and develop in these areas can be a game changer for retaining talent as well as improving employee engagement.
When people feel that they are an asset to the company, they’re far more likely to stay in their jobs.
Have a great management team
It’s a fact that people tend to leave managers, not jobs. Having a good manager can make a difference in retaining top talent in your business.
A great way to retain your best talent is by equipping employees in managerial positions with effective leadership skills so that they can support their teams and help them thrive in challenging situations.
Good listening abilities, selflessness, practicality and strong organisational skills are all qualities the workforce values. Investing in training and feedback programs to help managers work on developing these skills and more can help to produce strong business leaders with the capacity to set clear expectations and motivate employees within the business.
Place international opportunities front and center
A great way to attract new candidates is to provide them with career development opportunities. This includes the option to work in a new country, participate in overseas training programs or be a part of international remote teams.
Participating in cross-cultural exchanges and working with individuals from different backgrounds are enriching experiences that many employees value. Companies that can offer these opportunities must realise that these are some of their best assets in attracting a young and adventurous workforce and will stand to benefit by using them as part of their recruitment marketing.
Businesses that want to provide global opportunities can streamline their efforts by partnering with Airswift for assistance in resource management and solving workforce challenges. 
Talent acquisition
We want to help your company in attracting the best candidates in Iraq. We are acquainted with a wide range of industries so that we can find the talent that best fits your needs in the fastest way possible.
If you need to hire contract workers for short-term projects in more flexible ways, we can also assist with that. Our database of highly qualified contractors is the perfect place for your business to find the best talent there is.
If your company is looking for permanent employees, we offer a service provided by a specialised recruitment team that’s eager to help. Count on us in Iraq to find the best talent possible!
Airswift is committed to finding the workers that are suited to your needs. You can rely on us to speed up your hiring processes and retain your talent.
Employer of record
If what your company needs is to hire in Iraq without setting up a local office, Airswift can do that for you!
We can act as an Employer of Record in Iraq in order to hire in the workforce that you need as fast as possible and get your company up and running. Airswift will take care of everything! From permits to onboarding, taxes and payroll, benefits management and much more!