Libya at a glance
Libya has two rival administrations: the Tripoli-based Government of National Unity and authorities in the east. Registration, tax and Social Security Fund offices may apply rules differently by region. Confirm requirements with the office that covers your work location.
Income tax on salaries
Salaries are taxed under Income Tax Law No. 7 of 2010. Tax is calculated annually and withheld monthly by the employer.
| Annual taxable income (LYD) | Monthly equivalent (LYD) | Rate |
|---|---|---|
| 0 – 12,000 | 0 – 1,000 | 5% |
| Above 12,000 | Above 1,000 | 10% |
Taxable base: gross salary, minus employee social security, minus the 1% Social Solidarity Fund contribution, minus the personal exemption.
Personal exemptions (annual):
- Single: LYD 1,800.
- Married without children: LYD 2,400.
- Married, widowed or divorced with children: LYD 2,400 plus LYD 300 per child.
Jihad tax abolished. The 3% Jihad tax on salaries (Law 44 of 1970) was ruled unconstitutional on 3 February 2025. A Finance Minister directive cancelled it prospectively from July 2025. Sources give slightly different effective dates (EY cites 14 July 2025).
Social Security Fund
Cabinet Decree 406 of 2022 (amended by Decree 499 of 2022) and Finance Minister Circular No. 1 of 2022 set new rates from 1 June 2022.
| Employer type | Employer | Employee | Public treasury |
|---|---|---|---|
| Libyan entity | 14.35% | 5.125% | 1.025% |
| Foreign company or branch | 15.375% | 5.125% | – |
| Social Solidarity Fund | – | 1% | – |
Excluding the Solidarity Fund, the total is 20.5% in both cases, because foreign companies also carry the treasury share. The decree text itself was not accessible. These figures come from the Libyan Law Society index of the Finance Ministry circular and a payroll vendor. Many EOR guides still show the older split (3.75% employee, 10.5% employer, 15% total), which appears out of date. Confirm rates with the Fund before running payroll.
No ceiling was reported, and filing deadlines vary between sources. Confirm both locally.
End of service
Under Article 78 of Labour Relations Law No. 12 of 2010, non-national workers receive:
- half a month’s pay per year of service for the first five years;
- one month’s pay per year after that.
The gratuity is not due if the worker is covered by a social security plan, or resigns without serving notice. Foreign employees generally contribute to the Fund, so check case by case which applies. It is also paid on medical unfitness, incapacity or death (Arts. 44 and 80).
Libyan nationals receive no lump-sum gratuity; pensions come from the Social Security Fund. Notice for indefinite contracts is 30 days by registered letter (Art. 71), with pay in lieu if not observed.
Salary payment rules
Salaries are paid monthly in LYD through bank accounts. There is no wage protection system (WPS). Banks face chronic cash shortages, so disbursement depends on bank liquidity; the Central Bank runs instant salary schemes.
The Central Bank devalued the official rate in April 2025 (to LYD 5.5677 per USD) and again in 2026 (to LYD 6.3759 per USD). Parallel-market rates differ.
Working time and leave
- Hours: up to 48 a week and 10 a day; averaged over three weeks, 8 a day and 48 a week (Art. 13). The weekly rest day is normally Friday.
- Overtime: at least +50% (Art. 16), up to 3 hours a day. Work on the weekly rest day earns a substitute day within 3 days or double hourly pay.
- Annual leave: 30 days a year, or 45 days from age 50 or after 20 years’ service. At least one block of 15 consecutive days. Unused leave is paid out on termination.
- Maternity leave: 14 weeks (16 for multiple births), with at least 6 weeks after delivery. It is paid; the text reviewed does not say by whom. Nursing breaks of 1 hour a day apply for 18 months.
- 13th month: not statutory.
Minimum wage
LYD 1,000 a month under Law No. 16 of 2023 on minimum salaries and wages, as reported by WageIndicator. Enforcement in the private sector is uneven.
Gotchas for foreign employers
- Libyanisation: nationals must make up at least 75% of each employer’s workforce (Art. 51). Employers must also take Libyan trainees equal to 20% of their foreign headcount, or fund their training (Art. 81).
- Foreign workers need a work permit before starting, and recruiting from abroad needs prior approval (Art. 9).
- Stale payroll templates still deduct the Jihad tax or use pre-2022 social security rates.
- Devaluations, an on/off surcharge on official FX purchases and cash shortages complicate USD-linked pay and repatriation.
- Compare Tunisia and Egypt, or see providers.