Companies operating in federal Iraq and the Iraqi Kurdistan Region must register all local and foreign employees with the Directorate of Labor and Social Security.

The Pension and Social Security Law (39/1971) applies in both regions and regulates the different issues faced by employers and employees regarding their rights and obligations towards each other on the one hand and obligations towards the relevant governmental authorities on the other hand.

Social security registration and contributions

All employers must register their employees with the Directorate of Labor and Social Security as of the first day of employment.

Any change in the number of employees must be recorded and documented simultaneously with payment of monthly contributions, where new and departing employees are registered along with the respective start or end date of their employment.

The Ministry of Interior imposes strict requirements on visa permits for unskilled workers. Employers must sign a social security registration pledge in order to complete the visa issuance process. Once inside the country, all unskilled workers must be registered with social security before their residency permits can be issued.

Employers make a 12% social security contribution for each employee, calculated based on each employee’s monthly wages. Employees make a 5% social security contribution, withheld at source by the employer.

General exemptions and special exemptions for oil companies

Foreign employees of all companies can be exempted from social security registration and contributions if they demonstrate that they are registered with social security or any equivalent government programme in their home country.

In accordance with Directive 17094/2013 – issued by the Ministry of Natural Resources, the governmental authority overseeing and regulating the activities of oil companies in the Iraqi Kurdistan Region – a special exemption regime applies to foreign employees of oil companies.

The issued directive provides easier exemption conditions for foreign employees of oil companies based on the following procedure:

  • The employment contract must clearly state that both parties have agreed to register the employee with the Directorate of Labor and Social Security.
  • The employee must either have private insurance coverage or be registered with a government program that is similar to social security.
  • Supporting documents must be translated into Kurdish and submitted to the Directorate of Labor and Social Security. An exemption will be granted only if the directorate determines that the presented coverage is more beneficial to the employee than Iraqi social security.


Although the general legal framework organizing the relationship between employers and the Directorate of Labor and Social Security is well systemized, exemptions are still granted on a discretionary basis. Therefore, despite the clear and flexible directives communicated by the Ministry of Natural Resources, the Directorate of Labor and Social Security can still interpret and apply the directives at its discretion, which often proves to be a significant final hurdle when seeking exemptions.