Increase of the minimum wage and the relevant changes starting from the new Iranian calendar year
The Circular No. 265156 dated 19 March 2019 was issued by the Ministry of Labour and Social Affairs in relation to the mandatory increases of wage and benefits of employees for the new Iranian calendar year 1398 (21st March 2019 to 20th March 2020).
From the beginning of Iranian calendar year 1398, the minimum daily wage with equal rate for all the employees subject of the Labour Code (whether permanent or temporary contract), has been increased from IRR 370,423 in 1397 to IRR 505,627. This means that no employee should receive wages of less than IRR 15,168,810 per month during 1398.
Also, the mandatory wage increases for other wage earners in 1398 amounts to 13% of basic pay (subject of Article 36 of Labour Code), plus a further IRR 87,049 per day which shall not be less than IRR 505,627 per day in any event.
In addition, employees with a period of service of one year or more shall be entitled to a further IRR 23,333 per day as the severance payment.
In accordance with Note 3 of Article 36 of the Labour Code, the fixed contributions for basic necessities of employees (whether in permanent or temporary contract and whether married or single) in 1398 will be IRR 1,900,000 per month.
With mandatory increase of the minimum wage, child allowance has been also increased being triple of minimum daily wage making the monthly child allowance for each child in 1398 in the amount of IRR 1,516,881 (3 x IRR 505,627).
As for the housing allowance, the fixed housing allowance for 1398 is IRR 1,000,000 per month increasing from IRR 400,000 for last year.
|
No. |
Description |
Daily in IRR |
Monthly in IRR |
|
Basic Level (Minimum pay) |
|||
|
1 |
Minimum wage (on 30 days basis) |
505,627 |
15,168,822 |
|
2 |
Contributions for basic necessities/foodstuff |
63,333 |
1,900,000 |
|
3 |
Housing allowance |
33,333 |
1,000,000 |
|
4 |
Child allowance |
50,563 |
1,516,882 |
|
5 |
Severance basis (provided having at least one year of work experience) |
23,333 |
700,000 |
|
Other Levels |
|||
|
1 |
Percentage of the increase of other levels of wage earners in comparison with the previous year |
13% |
|
|
2 |
Fixed monthly excess payment |
87,039 |
2,611,180 |
|
3 |
Severance basis (provided having at least one year of work experience) |
23,333 |
700,000 |
|
4 |
Contributions for basic necessities/foodstuff |
63,333 |
1,900,000 |
|
5 |
Housing allowance |
33,333 |
1,000,000 |
|
6 |
Child allowance |
50,563 |
1,516,882 |
|
New year reward and tax |
|||
|
1 |
Minimum new year reward |
83,117 |
30,337,644 |
|
2 |
Maximum new year reward |
124,675 |
45,506,466 |
|
3 |
The basic tax exemption ceiling |
75,342 |
27,500,000 |
Coordinated by Dr. Mahnaz Mehrinfar & Ms. Sahar Sotoodehnia