How to Hire Remote Employees In 


The Basics

Iraqi Dinar (IQD)
Employer Taxes
Payroll Frequency
Official Language

Employment in 


Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 


A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Iraq can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Iraq, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Iraq.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Iraq is not the same as paying workers in your own country. Employees have to be paid using Iraq’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.


 Specific Information

Working Hours

The standard work week is 40 hours (Iraqi law 37 of 2015).

The maximum working hours are 48 hours per week (Iraqi law 37 of 2015 article 67).

The minimum rest duration per week is 24 hours.


Employees must be compensated for overtime with an additional 50% of their regular salary (if the overtime is carried out during the day) or an additional 100% (if the overtime is carried out at night, on a day of rest or if the work is considered to be arduous or harmful).

Overtime is capped atone to four hours per day, depending on the nature of the work.

Additionally, overtime is limited to 40 hours per 90 days and 120 hours per 12 months.

Overtime performed during the day is paid at a rate of50%, while overtime pay is doubled at night.

Payroll Tax



  • Social Security
  • Statutory Contributions

Minimum Wage

The minimum wage in Iraq is IQD 350,000 (approximately $293.29).


Pay Cycle

Employees in Iraq receives their salary monthly.

13th Salary

Iraq does not offer 13th month pay.


Paid Time Off (PTO)

PTO is calculated by the:

  • One year of employment
  • Workers are entitled to 21 days of fully paid leave annually
  • This amount of leave increases incrementally the longer an employee works at your company
  • Employees working in difficult or dangerous conditions, such as work environments with health hazards, are entitled to 30 days of paid vacation each year
  • In Iraq, employees has full pay for feast days and official holidays that do not fall on a Saturday

Public Holidays

There are 13 public holidays with paid.

Sick Days

Employees are eligible to claim 30days of fully paid sick leave for every year of service, with a maximum cap of180 days.

After the 30-day mark, social insurance will cover any paid sick leave. Employees must show documented medical evidence to claim paid sick leave.

Maternity Leave

Employees can take 72 days of paid maternity leave if they are working in a company operating in Iraq.

However, the number of days can be increased based on the requirements of the employee.

Paternity Leave

The Labor Law does not grant fathers paternity leave.  any parent (male or female) is entitled to unpaid leave for up to three days to tend to a sick child under six years of age.

Parental Leave

In Iraq, any parent (male or female) is entitled to unpaid leave for up to three days to tend to a sick child under six years of age.

Other Leave

In Iraq, if the employee is involved in some hazardous activity like heavy equipment operation, etc., he will be entitled to 30 days of paid leave.

Marriage Leave

Employees can take leaves for marriage. Also, employees can take a leave even if their children are getting married.

These leaves can be extended but would be unpaid.

Bereavement Leave

Employees can take leaves if there is a death in their family but would be unpaid.


Termination Process

Iraq has a very complex system when it comes to the termination of employment. Like any other country, there are several guidelines for termination of employment in Iraq.

Therefore, you need to have a comprehensive knowledge of the system and its implications.

Following are the grounds of termination laid down by the Labor Law of Iraq:

  • A mutual agreement between the two parties, i.e., the employer and the employee
  • Expiration of a fixed contract.
  • Will of the employee
  • If the employee is incapacitated for more than six months due to illness.
  • In case the employee has some significant deformities becomes more than 75% incapacitated, he will be terminated.
  • The downfall of the company

The employee can terminate the employment contract without giving notice, in the following circumstances:

  • If the employer breached any of their obligations stipulated in the New Labour Law, or in the employer's rules of procedure, or in the employment contract.
  • If the employer has committed a offence or a misdemeanor against the employee or any of their family members (both within and outside of the workplace).
  • If there is a grave hazard threatening the employee's safety or health, provided that the employer is fully aware of this hazard and did not try to remove it.

Notice Period

Employers are required to provide at least 30 days advance notice in writing to employees and pay an end-of-service gratuity that ranges from the equivalent of two to 20 weeks of service depending on length of employment.

If the notice is not given, the employee is entitled to compensation amounting to their salary for the notice period.

Severance Pay

A severance payment of two weeks salary for each year of service and one month in case of unjustified termination is required.

The employee can also ask to be reinstated to their position instead of receiving a severance payment.

Probation Period

Probation period can be a month or two, but not more than three.