Minimum Wage
The Labour Law defines wages as any amount or benefit due to the worker in return for any work performed by the worker. The wage includes all allowances and increments applicable in accordance with the applicable terms of employment and the payment due for overtime.
The minimum wage is legally prescribed, i.e., set by the government. The Labour Law defines minimum wages as the legally prescribed wage or the wage specified in the employer’s enterprise according to the individual employment contract or collective agreement, whichever is higher. The minimum wages are revised every two years. The minimum wage is revised under the established committee by the Minister, which includes the Director-General of the Labour and Loan Department, the Director-General of the Workers’ Pension and Social Security Department, and representatives of workers and employers. Additionally, two experts, specialised in various aspects of wage policies, are also part of the Committee. The minimum wage is s et by considering the needs of the workers and their families, the general level of wages in the country, the current cost of living and changes in it and other economic factors, including the requirements of economic development, the level of productivity and the desire to achieve and maintain a high rate of employment.
Employers must prominently display wage information and ensure it meets at least the legally prescribed minimum wage. Workers can claim any unpaid wage difference, and in disputes, the employer must prove the correct payment.
Failing to pay the legally prescribed minimum wage incurs a penalty of double the applicable monthly minimum wage and compensation to the worker amounting to twice the monthly wage the worker received.
Source: §1(14), 45, 53 and 62-65 of the Iraq Labour Law, 2015
For updated minimum wage rates, please refer to the section on minimum wage.
Regular Pay
Every worker has the right to their wages according to the services rendered, including situations where the worker is ready but is prevented from performing their work due to circumstances beyond their control, provided they are present at the workplace. Wages owed to the workers must be paid in Iraqi currency, unless otherwise specified in the employment agreement contract.
Wages may be paid by cheque, bank transfer, or payment order, provided this is in accordance with a collective agreement or arbitration award. However, they cannot be paid in the form of promissory notes or vouchers. The worker and employer must mutually agree upon the method of wage payment in a written agreement. Wages must be equal for women and men performing the same type of work.
As per Regulation No. 2 of 2024, private-sector salaries must be paid through banks/e-payment systems (phasing out cash by 1 July 2025).
The wages are paid at the end of the week in case of a weekly payment and at the end of the month in case of a monthly payment, at the workplace or the nearest place to it. Wages for monthly paid workers must be paid within five days of the end of the wage period.
The workers must be informed about the components of their wage before signing the employment contract, and in particular the allowances and the method of calculating overtime allowances and other increases or deductions, and payment periods, terms, place and day of payment. They must also be informed of said information whenever there is a change in the wage components. A detailed written statement of the wage must be provided to the worker upon the payment of each wage, including the work period for which the wage is due, the allowances, overtime allowances, and other deductions or increases.
A worker's wage can be deducted only in cases provided by law, a few specified as the expense of persons who are legally dependent on the worker, the amounts owed by the worker for the workers’ pension and social security department and the trade union contributions in accordance with the provisions of the trade union regulation. The overall wage deduction cannot exceed twenty per cent of the worker's wage if their wage is less than three times the applicable minimum wage, and cannot exceed thirty per cent of the worker's wage if their wage is more than three times the applicable minimum wage. Said rates are not applicable to the deduction of the expense loans. Any Loans due by the worker to the employer are not subject to any interest. If the workers terminate the employment contract, their wages must be paid within seven days of the end of the contract.
Employers must maintain a wage and overtime register that includes all details of a worker's wages, wage deductions, and net wages paid. The register must not contain any blanks, erasures, or additions. The wage register is used for verification and inspection by the Ministry’s labour inspectors.
Employers are prohibited from limiting the workers’ freedom to dispose of their wages or forcing workers to buy products from the employer or buy products from particular shops. Employers are further required to display in a prominent place in the enterprise an announcement informing the workers about the wages applied in the enterprise, provided that the wages are not less than the legally prescribed minimum wages.
There is no mandatory provision in law for a 13th or 14th month pay or a compulsory bonus. However, an employer may voluntarily provide a bonus based on employment contracts, collective bargaining agreements (CBAs), company policies or discretionary awards.
Source: §53 – 61 and 65 of the Iraq Labour Law, 2015
