Economic Overview, Large Engineering Workforce & Energy Reserves
Iran combines vast natural gas and petroleum reserves with one of the largest engineering and STEM graduate talent pools in the MENA region.
Key Economic Sectors
- Petrochemicals & Gas: South Pars natural gas field and major refining/chemical synthesis complexes.
- Automotive & Industrial Manufacturing: Domestic automotive assembly (Iran Khodro, SAIPA) and steel manufacturing.
- Software & DeepTech: Large domestic digital economy, e-commerce, and engineering research in Tehran.
Employment Contracts, Labour Code 1990 & Saturday–Wednesday Schedule
Regulated by the Labour Code of the Islamic Republic of Iran (1990).
- Written Contracts: Must be in Persian detailing wage structure and duties.
- Workweek Schedule: Standard workweek runs from Saturday to Wednesday (Thursday is a half-day and Friday is the official weekly rest day).
- Probation Period: Maximum 1 month for unskilled workers, and 3 months for skilled and professional roles.
Working Hours, Overtime & Rest Periods
- Standard Hours: 44 hours per week (typically 8 hours/day over 5.5 days).
- Overtime Surcharges: Minimum 140% (40% premium) of regular hourly wage.
Annual Leave, Public Holidays & Nowruz (Eidi) Bonus
Annual Leave & Mandatory Eidi Bonus
- Annual Paid Vacation: Minimum 26 to 30 calendar days (1 month) per year of continuous service.
- Mandatory New Year Bonus (*Eidi*): Employers must pay a mandatory bonus equal to 2 months' basic salary prior to the Iranian New Year (Nowruz in March).
- Public Holidays: ~25 official national and religious holidays per year.
- Maternity Leave: 9 months fully paid maternity leave via SSO social security.
Social Security (SSO 23% Employer) & INTA Income Tax
| Statutory Scheme | Employer Share | Employee Share | Coverage |
|---|---|---|---|
| Social Security Organization (SSO) | 20.0% | 7.0% | Pensions, disability, healthcare & sickness |
| Unemployment Insurance Fund | 3.0% | 0.0% | National unemployment insurance fund |
| Total Statutory SSO Contributions | 23.0% | 7.0% | 30.0% total monthly social security remittance |
Personal Income Tax: Progressive rates from 10% up to 30% on taxable income, remitted monthly to INTA.
Termination, Notice & Severance Pay (Sanavat)
- Notice Periods: Minimum 1 month written notice.
- Severance Pay (*Sanavat*): Statutory indemnity equal to 1 month's salary per completed year of service.
Why Use an Employer of Record (EOR) in Iran
- Labour Code & SSO Compliance: Full management of 23% employer social security, Eidi New Year bonus, and Sanavat severance.
- Local Payroll Management: Compliant local payroll processing and tax reporting.
Hiring in Iran? Key Resources
Whether you are evaluating entity setup vs. using an Employer of Record, or looking for the best international payroll solution, our guides give you transparent benchmarks:
