FEDERAL IRAQ · CALCULATION GUIDE
How Federal Iraq gross salary becomes net salary
A traceable calculation using statutory income-tax bands, documented family allowances and the social-security contribution wage.
Rules version IQ-FED-2026.1 · Reviewed 2 October 2026
The calculation sequence
- Start with monthly gross remuneration.
- Calculate employee social security at 5% of the registered contribution wage, subject to the IQD 1,750,000 ceiling used in the validated September payroll sample.
- Annualise gross salary after the employee contribution.
- Subtract the employee's documented annual tax allowance.
- Apply the progressive annual bands, then divide the result by twelve.
- Subtract employee social security and monthly income tax from gross salary.
Annual tax allowances
| Documented status | Annual allowance |
|---|---|
| Single / no qualifying spouse allowance | IQD 2,500,000 |
| Married with qualifying spouse | IQD 4,500,000 |
| Widowed or divorced | IQD 3,200,000 |
| Each qualifying child | IQD 200,000 |
| Age 63 or older | Additional IQD 300,000 |
The spouse allowance is conditional; selecting “married” is not enough unless the spouse meets the statutory income condition. Child eligibility must also be supported by the employee record.
Income-tax bands
The calculator applies 3% to the first IQD 250,000 of annual taxable income, 5% to the next IQD 250,000, 10% to the next IQD 500,000 and 15% to the balance. These are progressive slices—not one rate applied to all income.
What the September workbook proves
The finance workbook contains formulas for net pay, but its employee social-security, employer social-security and income-tax columns are pasted values. It independently reproduces the 5% and 12% contribution rates and the IQD 1,750,000 ceiling. It does not contain marital status or eligible-child fields, so it cannot validate an employee's tax allowance by itself.