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Iraq can offer access to Arabic- and Kurdish-speaking talent across sectors like oil and gas, construction, logistics, and services, but operating costs are shaped by local labor rules, security considerations, and regional differences between Baghdad, Basra, Erbil, and other hubs. Your total cost to hire in Iraq includes gross salary plus mandatory social security contributions and, in practice, additional benefits such as transport, meals, and sometimes housing or hardship allowances.
Below are market-based monthly cost estimates for 2026 in major cities, combining typical salaries with Iraq's standard employer social security contribution of 12% of insurable salary for private-sector employees registered with the social security authorities. Figures are indicative only, will vary by seniority, industry, and location, and assume an exchange rate of roughly IQD 1,310 = USD 1.
- Software Engineer:
Average salary IQD 2,200,000 (≈ USD 1,680) + employer contributions IQD 264,000 (≈ USD 200) = Estimated Total Monthly Cost IQD 2,464,000 (≈ USD 1,880). Costs rise for senior full-stack or architecture roles, work with international teams, or packages that include housing, transport, or security allowances. - Product Manager:
Average salary IQD 2,800,000 (≈ USD 2,140) + employer contributions IQD 336,000 (≈ USD 260) = Estimated Total Monthly Cost IQD 3,136,000 (≈ USD 2,400). Product leaders driving digital or infrastructure projects, especially in regulated or government-linked programs, may negotiate higher pay and performance bonuses. - Marketing Specialist:
Average salary IQD 1,600,000 (≈ USD 1,220) + employer contributions IQD 192,000 (≈ USD 145) = Estimated Total Monthly Cost IQD 1,792,000 (≈ USD 1,365). Talent with strong digital skills, bilingual Arabic-English capabilities, or experience in international brands usually sits toward the top of the range. - Customer Support Representative:
Average salary IQD 1,050,000 (≈ USD 800) + employer contributions IQD 126,000 (≈ USD 95) = Estimated Total Monthly Cost IQD 1,176,000 (≈ USD 895). Roles that require night shifts, multilingual support, or work in higher-risk areas can attract premiums or extra allowances. - HR Manager:
Average salary IQD 2,500,000 (≈ USD 1,910) + employer contributions IQD 300,000 (≈ USD 230) = Estimated Total Monthly Cost IQD 2,800,000 (≈ USD 2,140). HR leaders experienced in Iraq labor law, social security, and multinational compliance expectations can command higher packages, especially in large projects or regional headquarters.
Figures are estimates based on prevailing market data and may change with currency fluctuations, evolving security conditions, and your internal policies on bonuses, insurance, housing, and other benefits.
💡 Curious how much it would cost to hire your next role in Iraq? Use our Salary Benchmarking Tool to get an instant, role-specific estimate - including taxes and compliance costs.
When you hire in Iraq, salary is only one part of your total cost. You also need to factor in social security contributions, generous leave entitlements, public holidays linked to religious calendars, and local expectations around allowances, security arrangements, and benefits.
In 2026, mandatory employer social security for private-sector workers typically adds around 12% of covered salary, before counting optional health insurance, transport, or housing support that many employers provide to attract and retain talent in Iraq.
Leave and Paid Time Off
Iraq's labor framework provides at least 20 days of paid annual leave for full-time employees, increasing with seniority, plus separate sick leave provisions. Employees also benefit from paid public holidays tied to national and religious events, which can vary slightly between regions and yearly calendars.
Maternity leave in Iraq generally offers around 72 days of paid leave, with job protection, while paternity leave is not yet widely standardized and is often policy-based rather than statutory. You should plan for these absences when structuring team capacity and temporary cover.
Mandatory Employer Contributions
For eligible employees registered under Iraq's social security system, employers usually contribute around 12% of the employee's insurable salary to social security, funding pensions and other long-term benefits. This percentage sits on top of gross pay and must be budgeted for every month.
Some sectors or contracts may introduce additional obligations, such as sector-specific funds or insurance schemes, especially in oil and gas or construction. Always confirm the applicable rate with a local payroll expert when hiring in federal Iraq or the Kurdistan Region.
Probation and Notice Periods
Iraq commonly allows probation periods, often up to three months, during which termination procedures can be somewhat more flexible but must still respect basic labor protections. Clear contracts that specify probation length, evaluation criteria, and notice expectations are essential for managing risk and cost.
Outside probation, notice periods are typically set by law or contract and can range from around 30 days upward depending on seniority and role. When you plan exits, include the cost of paid notice, unused leave payouts, and any contractually agreed severance.
Compensation Structure and Bonuses
In Iraq, compensation is usually structured as a base salary plus cash allowances, which might cover transport, meals, housing, or hardship depending on location and sector. A 13th-month salary is not mandated by law and is not a universal practice, though some employers use annual bonuses.
Performance, site, and security premiums are common in higher-risk or remote postings, particularly in energy and infrastructure projects. Make sure your budgeting distinguishes between fixed guaranteed pay and truly variable bonuses tied to individual or project outcomes.
Social Security and Tax Compliance
Employers in Iraq must register with the relevant social security authorities and withhold and remit both employer and employee contributions on time. Income tax is generally withheld at source through payroll, so accurate calculation and reporting are critical to avoid penalties.
Filing cycles and procedures can differ between federal Iraq and the Kurdistan Region, and rules may change as authorities modernize systems. Many international employers partner with an Employer of Record or local payroll provider to stay compliant and reduce administrative overhead.
Hiring and Engagement Models
If you do not have a legal entity in Iraq, an Employer of Record lets you compliantly hire local employees, with the EOR handling contracts, payroll, tax, and social security while you manage day-to-day work. This approach reduces setup time and fixed costs.
Companies with their own entity can hire directly but must manage HR administration, registrations, and ongoing compliance in-house or through local advisors. In both cases, understanding Iraq's full cost structure - salary, contributions, leave, holidays, and allowances - helps you budget accurately and remain competitive.
Bring them on board seamlessly with Playroll. Our legal experts handle compliance so you don’t have to.
Book a DemoHere are six actionable ways to make your hiring strategy more cost-efficient – wherever you’re building your team.
- Plan Around Statutory Contribution Caps
Most countries set salary ceilings for mandatory employer contributions like pensions, healthcare, or unemployment insurance. Once an employee’s earnings exceed that cap, your contribution amount stays fixed. Mapping compensation bands against these limits before finalizing offers helps you remain competitive without paying unnecessary premiums. - Localize Benefits Strategically
Every market values different perks. Instead of applying a global benefits template, align packages to local expectations and cultural norms. In some regions, private healthcare or transport allowances are far more attractive than bonuses or extra paid leave. Prioritize what your team will value most and trim the rest – you’ll keep engagement high while reducing spend. - Consider an Employer of Record (EOR)
Running your own entity can be expensive – local payroll systems, tax filings, and compliance administration add up fast. Partnering with a trusted EOR like Playroll simplifies hiring anywhere in the world. We manage contracts, benefits, payroll, and compliance for you, all under one transparent monthly fee. It’s the easiest way to scale globally without unexpected costs or compliance risks. - Revisit Employment Contract Types and Terms
Not every role needs to be permanent or full-time. Many labor frameworks allow fixed-term or project-based contracts, which can offer both flexibility and cost control. Be intentional about probation periods, notice clauses, and renewal terms – clear definitions reduce risk and prevent costly disputes later. - Explore Cross-Border Hiring Options
If a role doesn’t require strict on-site presence, widen your search to include neighboring or lower-cost markets. With compliant hiring solutions, you can engage top talent in other countries while reducing salary and overhead costs – all without setting up additional legal entities. - Build Internal Mobility
Before recruiting new talent, look at who you already have. Upskilling or promoting existing employees can fill gaps faster and for less cost than external recruitment. This also boosts retention and engagement, since employees see clear career progression within your organization.
What is the average employer cost of hiring in Iraq in 2026?
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In 2026, mid-level hires in Iraq often cost employers around USD 900-2,500 per month, including salary, employer social security, and common allowances. Actual costs vary significantly by role, seniority, and location.
Are there regional or industry-specific variations in employer costs in Iraq?
Employer costs in Iraq differ across regions and industries, with oil and gas, construction, and international projects paying premiums over local services. Basra, Baghdad, and Erbil often command higher salaries and allowances than smaller cities.
What is the estimated timeline for hiring in Iraq?
Hiring in Iraq usually takes 4-10 weeks from sourcing to start date, with longer timelines for technical or senior roles. Security checks, approvals, and relocation can extend the process for some positions.
What factors impact the cost of hiring in Iraq?
In Iraq, hiring costs are driven by seniority, industry, region, and working conditions, plus statutory social security contributions. Extra allowances, insurance, and bonuses also play a major role in total employer spend.
How often do employment-cost rules change in Iraq?
Iraq's core employment-cost rules are relatively stable but can be updated as authorities refine social security and tax systems. Reviewing requirements annually or using a local compliance partner helps keep payroll accurate.
about the author
Jaime Watkins
Jaime is a content specialist at Playroll, specializing in global HR trends and compliance. With a strong background in languages and writing, she turns complex employment issues into clear insights to help employers stay ahead of the curve in an ever-changing global workforce.
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