By ASHUR International · Updated October 2026
IRAQ INSIGHT · Updated October 2026
Registration, payroll records, contributions and historical employer compliance
Foreign companies should review payroll, personal income tax and social-security obligations together. Law No. 18 of 2023 provides the Federal Iraq worker retirement and social-security framework; jurisdiction, coverage, employer activity, remuneration and applicable exceptions determine the position. This guide explains the compliance file and historical review process. It is general information, not legal advice.
Registration and Reporting Responsibilities
Determine the employer’s registration and reporting responsibilities under the applicable jurisdiction and worker-coverage rules. A branch, subcontract or project arrangement should not be assumed to remove obligations. Reconcile employment contracts, worker registrations, payroll declarations, contribution payments and authority correspondence. Tax and social-security clearance are separate processes.
Employer and Employee Contributions
Contribution rates depend on the statutory category and covered remuneration. Do not apply a single combined rate to every oil-and-gas, construction or EPC employer. Reconcile registration, employee records, payroll declarations and payment evidence against the applicable legal requirements.
Local and Foreign Worker Coverage
Coverage for Iraqi and foreign workers must be assessed against the law, applicable exceptions and authority requirements. Keep employment contracts, payroll records, work permits and coverage evidence consistent. Foreign nationality alone should not be treated as an automatic exemption.
Article 14: Contribution Scope
Article 14 of Law No. 18 of 2023 sets contribution categories. The law provides a 5% employee share, a 12% ordinary employer share and a 25% employer share for qualifying hydrocarbon activities. State contributions and foreign-worker coverage have conditions. These provisions should not be described as a general subcontractor-enforcement rule. Confirm the applicable category, wage base and current authority procedures for each workforce.
Common Compliance Risks
Review late or incomplete registration, incorrect remuneration bases, missing worker documents and differences between payroll, tax returns and employment contracts. Historical periods may require reconciliation and response to authority queries. Record missing evidence and unresolved balances rather than assuming every past period is closed.
Best Practices for Foreign Companies
To manage social security risk effectively, companies should:
Establish proper payroll and social security registration from day one
Maintain accurate and consistent employee documentation
Align payroll records with tax filings and labor contracts
Conduct periodic compliance reviews
Address issues proactively before inspections or audits
A structured review helps identify differences, assign responsibilities and keep unresolved matters visible.
How ASHUR International Supports Employers
ASHUR International supports social-security registration, payroll processing and PIT reconciliation, worker and wage records, historical contribution review, inspection-response preparation and authorized regulatory follow-up. Scope and responsibilities are agreed for each workforce and file.
Discuss Employer Compliance
Bring the workforce details, payroll schedules, registration documents, declarations, payment evidence and relevant authority correspondence. We will clarify the review scope and next steps.
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