Currency and tax year
Iran’s currency is the rial (IRR). People often quote amounts in toman, which is 10 rials. A redenomination law, in force since December 2025, removes four zeros: 1 new rial equals 10,000 old rials. The reported timeline is a preparation period to about December 2027, then dual circulation, with the old rial withdrawn by about 2030. Several exchange rates (official and market) exist side by side.
The tax year is the solar year 1405: 21 March 2026 to 20 March 2027. Salary tax rates are set each year in the Budget Law.
Income tax on salaries
Salary tax is withheld monthly under the Direct Taxation Act, Articles 84–85, as overridden by the Budget Law 1405. The table below is the monthly scale as reproduced by Iranian payroll publishers. It is consistent with news reports of an annual exemption of IRR 4.8 billion, but we have not checked it against the official gazette. Confirm it with INTA before use.
| Monthly taxable salary (IRR) | Rate |
|---|---|
| 0 – 400 million | 0% |
| 400 million – 800 million | 10% |
| 800 million – 1 billion | 15% |
| 1 billion – 1.2 billion | 20% |
| 1.2 billion – 1.4 billion | 25% |
| Above 1.4 billion | 30% |
There are no family credits. Employee social security (7%) and some allowances are excluded from the taxable base. University faculty and judges are taxed at a flat 10%.
Social security (SSO)
The Social Security Organization (Tamin Ejtemaei) runs the scheme under the Social Security Act 1975 and the Unemployment Insurance Act.
| Employer | Employee | |
|---|---|---|
| Social security | 20% | 7% |
| Unemployment insurance | 3% | – |
| Total | 23% | 7% |
The insurable wage floor is the minimum wage, IRR 166,255,500 a month. The ceiling is 7 times the minimum daily wage for 30 days, which works out at about IRR 1,163,788,500 a month. The formula is confirmed by payroll sources; check the computed figure against the SSO circular.
Foreign employees with work permits are generally expected to contribute at the same rates. Few reciprocal agreements exist, so confirm the position with SSO for each hire.
End of service (sanavat)
Severance is one month of last wage per year of service on termination under Labour Law Article 24. For dismissal for misconduct, Article 27 sets at least one month per year. There is no cap. In practice many employers pay it out each year.
Bonuses
- Eydi: two months’ wage, capped at three months’ minimum wage, paid before Nowruz and pro rata for part years.
- Seniority pay (paye sanavat): an annual increase set by the Supreme Labour Council.
Wage payment rules
There is no wage protection system. Wages are paid in cash or by bank on working days, at intervals of no more than one month. The monthly insurance list (list-e bimeh) must be filed with SSO by the end of the following month.
Working time and leave
- Hours: 44 a week and 8 a day (Labour Law Art. 51). Friday is the weekly rest day.
- Overtime: 40% premium (Art. 59), up to 4 hours a day with consent. Night work earns a 35% premium.
- Annual leave: one month of paid leave a year (Art. 64), usually counted as 26 working days. Hazardous work earns 5 extra days.
- Maternity leave: 270 days (9 months) paid by SSO, or 12 months for twins, under the 2021 family support law. Fathers get 2 weeks.
Minimum wage
The Supreme Labour Council raised the minimum wage by 45% from 21 March 2026. The base minimum is IRR 166,255,500 a month (IRR 5,541,850 a day). Other wage levels rose by 45% of base plus IRR 519,549 a day.
Mandatory housing and grocery allowances bring a single worker’s minimum package to about IRR 218 million a month. The split between the two allowances should be confirmed. The child allowance is 3 times the minimum daily wage per child.
Gotchas for foreign employers
- Sanctions. US primary sanctions (ITSR) prohibit US persons and US-nexus payments. EU and UN measures were re-imposed after the September 2025 snapback. Get sanctions counsel before any engagement.
- Inflation and exchange rates. Wages are set in rials, and the minimum has been rising by about 40–45% a year. USD-denominated contracts create FX and legal risk.
- Work permits. Foreign workers need a permit from the Ministry of Cooperatives, Labour and Social Welfare, tied to a specific employer and role.
- Real cost. Eydi, sanavat and one month’s leave push employer cost well above gross pay plus 23% SSO.
- Redenomination. Payroll systems must handle old and new rials during the transition.