Understanding the New Social Security Law No. 18 of 2023 in Iraq: Key Insights on Contributions of Oil and Gas Employers

As Iraq continues to reform its legal system to better support its workforce, Social Security Law no. 18 (SS Law) enacted in 2023 is an important step. This new law brings many changes, especially for individual and mixed business employers with international oil companies operating there. Here, we examine some of the most important parts of the law, with a particular focus on Social Insurance deductions and compensation for Social Security contributions.

Social insurance deductions: a misunderstood explanation

There has been some consternation over the percentage of local workers in international oil companies being cut. In contrast to the available information on the 12% deduction, Article 14 of the SS Law provides a different provision:

For employers: The employer contribution rate is set at 25% of employee salary.

It is divided into:

1. (15%) Fifteen percent for the Retirement Branch.
2. (3%) Three percent for the branch of work injuries and occupational diseases.
3. (3%) Three percent for the branch of assistance for the work stoppage.
4. (4%) Four percent for the Health Insurance and Social Services Branch and benefits for working women (maternity insurance).

For employees: 5% of their salary is assigned to the Retirement Security Branch.

State contribution: Again, the state contributes 8% of the salary and income of the employee.

However, this does not apply to foreign workers in Iraq, where the employer pays their contributions and state contributions.

Limitations on compensation for social security contributions: The new SS law caps pay based on social security contributions with a limit of five times the basic minimum wage or the professional minimum wage, whichever is higher and applicable.