# End-of-Service Entitlements in Iraq: A Practical Guide to Labour Law No. 37 of 2015 Last updated: 14 October 2026 Author: Othman Al-Juboori اقرأ بالعربية End-of-Service Entitlements in Iraq: A Practical Guide to Labour Law No. 37 of 2015 This article explains the payments an employer in federal Iraq must assess when an employment relationship ends under Labour Law No. 37 of 2015. It covers the statutory end-of-service gratuity of two weeks' wage per year of service (Article 45) which is payable in all cases in which service ends. It also covers notice pay, compensation for unused annual leave, final wage settlement, the payment due on a worker's death, and the enhanced compensation for unlawful termination. It then distinguishes the employer-paid gratuity from benefits paid by the workers' social security fund under Law No. 18 of 2023, and closes with a practical checklist. The law is stated as at October 2026. Law No. 37 of 2015 has not been amended since enactment; a First Amendment bill had its first reading in the Council of Representatives on 25 July 2026 and is not yet law. Othman Al-Juboori, Iraqi lawyer, expert in Iraqi labour lawIraqi lawyer, expert in Iraqi labour law Last updated: 14 October 2026 Why end-of-service entitlements matter For foreign companies and their HR teams in Iraq, end-of-service payments are often where disputes start. Labour Law No. 37 of 2015 was published in the Official Gazette (Al-Waqai' Al-Iraqiyya) No. 4386 on 9 November 2015 and came into force 90 days after publication (Article 174). It governs private-sector employment in federal Iraq. It applies to all workers in Iraq, foreign workers included (Articles 2 and 3). It does not apply to civil servants appointed under the Civil Service Law or a special law, or to members of the armed forces, police and internal security (Article 3/Second). Two features shape every end-of-service calculation. First, the rights in the Law are minimum standards. A more favourable term in another law, a contract or an agreement prevails, and any clause by which a worker waives a statutory right is void (Article 14). Second, claims are handled by specialised bodies (see below), and the employer bears the burden of proof when a worker challenges a termination (Article 46/Third). Kurdistan Region The Region applies Labour Law No. 71 of 1987; the federal Labour Law No. 37 of 2015 has not been adopted there. The figures in this article relate to federal Iraq, including Baghdad and Basra. The statutory end-of-service gratuity (Article 45) A worker whose service has ended is entitled to an end-of-service gratuity equal to two weeks' wage for each year of service with the employer (Article 45). The gratuity is due in all cases in which service ends, whatever the reason: expiry of a fixed-term contract, written mutual agreement, prolonged illness or disability, downsizing approved by the Minister, dismissal, or resignation (Article 43/First/h). Retirement. Where the employer ends the contract because the worker has reached retirement age, Article 43/Second/c provides that the worker receives the end-of-service gratuity in accordance with the workers' retirement and social security law. This is a pointer to the social security regime, discussed below. Which wage? The Law defines "wage" broadly. It covers everything due to the worker in cash or in kind, together with all allowances and overtime pay (Article 1/Fourteenth). Article 45 does not say which wage (for example, the last wage or an average) is used. Employers should therefore keep clear payroll records of basic pay and allowances. The Law in any case requires a wage and overtime register (Article 61) and a written wage statement at each payment (Article 59). Other payments due at the end of employment The gratuity is only one element. A complete final settlement should also cover: Notice or pay in lieu. Where the employer terminates on one of the grounds in Article 43/Second, it must give at least 30 days' written notice or pay compensation in lieu (Article 44). During probation, the notice period is seven days (Article 37/Third). Unused annual leave. The worker is entitled to cash compensation for annual leave days not taken, calculated on the last wage received (Article 76/Fourth). Final wage settlement. Wages must be settled from the day after the contract ends. Where the worker ends the contract, they must be paid within seven days of leaving work (Article 60). Death of the worker. The employer must pay the worker's family two full months' wages, provided the worker had at least one year of service (Article 43/First/a). Foreign workers. An employer that recruited a foreign worker to Iraq at its own expense must provide a return ticket, unless the worker stopped working before the end of the contract for an unlawful reason. If the worker dies, the employer must bear the cost of preparing and transporting the body home if the family requests it (Article 32). Unlawful termination: the compensation multiplier If a termination committee or labour court finds that the dismissal was not based on a ground in Article 43, it orders reinstatement with full wages for the period out of work (Article 47/First). If reinstatement is not possible, the contract ends on the date of the decision. The worker then receives compensation equal to twice the Article 45 gratuity (Article 47/Second). Article 47/Third makes special provision for enterprises that regularly employ fewer than five workers. A termination for a prohibited reason is void. Prohibited reasons include trade-union activity, filing a complaint against the employer, being on legal leave, discrimination, and temporary absence due to documented illness or accident. Where reinstatement is not requested or is impractical, the compensation may not be less than twice the amount in Article 47/Second (Article 48). A worker who leaves without notice because the employer breached its obligations, committed an offence against the worker or the worker's family, or ignored a serious safety risk may claim the same compensation (Article 49). Priority and time limits If an enterprise is declared bankrupt or liquidated by final judgment, workers are preferred creditors for the last three months' wages, public-holiday pay, leave entitlements and the end-of-service gratuity. This priority ranks ahead of debts owed to the State (Article 58). Claims for rights arising from the employment relationship cannot be heard after three years from the date they fall due (Article 51). The social security dimension (Law No. 18 of 2023) The employer-paid gratuity under Article 45 is separate from benefits paid by the Workers' Retirement and Social Security Fund under Law No. 18 of 2023. Under that Law, an insured worker may qualify for a pension. Article 29 sets combinations of age and insured service, for example age 63 for men or 58 for women, each with at least 15 years of service. An insured worker who does not qualify for a pension may receive a one-off cash "reward" in specified cases, including reaching age 55 or leaving Iraq permanently (Article 46). These amounts are paid by the Department within 30 days of a complete application (Article 47). These benefits depend on contributions. Any period for which contributions were not paid does not count as insured service (except in cases of injury and death), and the worker may sue the employer to pay them (Article 32). Unpaid contributions can therefore surface as a separate claim at the end of employment. Practical checklist for employers Confirm whether the workplace is in federal Iraq or the Kurdistan Region before applying any formula. Remember that the gratuity is due in every case in which service ends, including resignation. Calculate the gratuity, notice pay, leave compensation and outstanding wages separately, and keep the calculation on file. Check the contract, internal regulations and any collective agreement for more favourable terms (Article 14). Confirm that social security registration and contributions are up to date for the whole period of service. For foreign staff, budget for the return ticket obligation under Article 32. Do not rely on a general release to waive statutory rights. Waivers of rights under the Law are void (Article 14). Frequently Asked Questions How is the end-of-service gratuity calculated in Iraq? Under Article 45 of Labour Law No. 37 of 2015, the gratuity is two weeks' wage for each year of service with the employer. It is payable in all cases in which service ends, including resignation. Is a dismissed employee entitled to more than the gratuity? If the dismissal had no lawful ground and reinstatement is not possible, compensation is twice the gratuity (Article 47/Second). For terminations on prohibited grounds, compensation may not be less than twice that amount (Article 48). Notice pay, leave compensation and unpaid wages are due in addition. Can an employee waive end-of-service rights in a settlement? Any clause by which a worker waives a right under the Labour Law is void (Article 14). Settlements should record payment of statutory amounts rather than purport to waive them. How long does a worker have to claim? Three years from the date the right fell due (Article 51). A challenge to the termination decision itself must be filed within 30 days of notification (Article 46). Related reading Iraqi Labour Law on our website Terminating Employment Contracts in Iraq: Grounds, Notice, Compensation and Labour Courts Social Security Obligations for Employers in Iraq under Law No. 18 of 2023 Sources Labour Law No. 37 of 2015 (Arabic text), University of Al-Qadisiyah: https://cm.qu.edu.iq/?page_id=17299 Labour Law No. 37 of 2015 (Arabic PDF), Middle Technical University: https://iba.atu.edu.iq/wp-content/uploads/2025/04/%D9%82%D8%A7%D9%86%D9%88%D9%86-%D8%A7%D9%84%D8%B9%D9%85%D9%84-%D8%B1%D9%82%D9%85-37-%D9%84%D8%B3%D9%86%D8%A9-2015.pdf Official Gazette No. 4386 (9 November 2015), Ministry of Justice: https://www.moj.gov.iq/uploaded/4386.pdf English translation of Labour Law No. 37 of 2015, Women's Learning Partnership: https://learningpartnership.org/sites/default/files/resources/pdfs/Iraq-Labor%20Law-2015-English.pdf ILO NATLEX record, Labour Law 2015 (Iraq): https://natlex.ilo.org/dyn/natlex2/r/natlex/fe/details?p3_isn=96652 Workers' Retirement and Social Security Law No. 18 of 2023, official English translation, Official Gazette No. 4734 (28 August 2023): https://www.moj.gov.iq/upload/pdf/%D9%82%D8%A7%D9%86%D9%88%D9%86%20%D8%A7%D9%84%D8%AA%D9%82%D8%A7%D8%B9%D8%AF%20%D9%88%D8%A7%D9%84%D8%B6%D9%85%D8%A7%D9%86%20%D8%A7%D9%84%D8%A5%D8%AC%D8%AA%D9%85%D8%A7%D8%B9%D9%8A%20-%20Copy_102.pdf This article is general information, not legal advice. ## Article numbers - Article 45 - Article 174 - Articles 2 and 3 - Article 3/Second - Article 14 - Article 46/Third - Article 43/First - Article 43/Second - Article 1/Fourteenth - Article 61 - Article 59 - Article 44 - Article 37/Third - Article 76/Fourth - Article 60 - Article 32 - Article 43 - Article 47/First - Article 47/Second - Article 47/Third - Article 48 - Article 49 - Article 58 - Article 51 - Article 29 - Article 46 - Article 47 ## Official legislation - https://www.moj.gov.iq/uploaded/4386.pdf - https://www.moj.gov.iq/upload/pdf/%D9%82%D8%A7%D9%86%D9%88%D9%86%20%D8%A7%D9%84%D8%AA%D9%82%D8%A7%D8%B9%D8%AF%20%D9%88%D8%A7%D9%84%D8%B6%D9%85%D8%A7%D9%86%20%D8%A7%D9%84%D8%A5%D8%AC%D8%AA%D9%85%D8%A7%D8%B9%D9%8A%20-%20Copy_102.pdf ## Disclaimer The information on this website is general legal information provided for awareness purposes. It is not legal advice on any particular matter and does not create a lawyer–client relationship. Iraqi laws and regulations change, so please check the text in force or consult a qualified lawyer before taking any action. Legal Notice and Disclaimer