In Iran, labor law mandates a comprehensive set of benefits that employers must provide to their employees. These benefits are designed to ensure worker protection, social security, and fair compensation.

Core Benefits

• Probationary Period: The law allows for a probationary period in employment contracts, but the specific duration is not mandated.
• Annual Leave: All employees are entitled to a minimum of one month (including four Fridays) of paid annual leave per year. Employees in hazardous professions receive an additional week of leave. Unused leave can be accrued up to a certain limit.
• Public Holidays: Employees are entitled to paid leave on all official Iranian public holidays, which amount to approximately 22 days annually. Working on these holidays requires overtime compensation.

Social Security and Insurance

• Social Security: Employers are required to contribute to the State Social Security Fund on behalf of their employees. This program provides benefits such as pensions upon retirement, disability benefits, and unemployment insurance. Employee and employer contribution rates are set by law.

Leave and Compensation

• Sick Leave: Employees are entitled to paid sick leave, with the duration subject to approval by the Social Security Organization.
• Maternity Leave: Female employees are entitled to 90 days of paid maternity leave, with their salary determined by the Social Security Act. There is no statutory paternity leave entitlement.
• Overtime Pay: Work performed outside regular working hours requires overtime compensation, typically at a rate of 40% above the regular hourly wage.
• Severance Pay: In the case of termination, completion of a definite contract, or redundancy, employees who have worked for at least one year are entitled to severance pay. This is calculated as one month's salary for each year of service, based on the employee's most recent pay.

In Iran, employers often provide additional perks beyond mandatory benefits to attract and retain talent, improve employee morale, and create a more competitive compensation package. These optional benefits can range from financial incentives to health and wellness programs, work-life balance initiatives, and other unique offerings.

Financial Benefits

• Profit Sharing: Employees may receive a share of the company's profits as a bonus.
• Transportation Allowances: To help cover commuting costs, employers may provide transportation allowances.
• Meal Subsidies: Subsidized meals at the workplace or meal vouchers can be a valuable benefit.
• Interest-free Loans: Some companies offer employees interest-free or low-interest loans for various purposes, such as housing or education.

Health and Wellness Benefits

• Supplemental Health Insurance: Employers may offer private health insurance plans that provide additional coverage.
• Gym Memberships or Fitness Programs: Subsidized gym memberships or on-site fitness facilities can promote employee well-being.

Work-Life Balance Benefits

• Flexible Working Arrangements: Offering flexible work schedules, telecommuting options, or compressed workweeks can enhance employee work-life balance.
• Childcare Assistance: Employers may provide childcare subsidies or on-site childcare facilities to support working parents.
• Educational Assistance: Helping employees pursue further education through tuition reimbursement programs can be a valuable benefit.

Other Benefits

• Recreational Activities: Companies may organize social events, sports teams, or recreational outings to boost employee morale and team building.

In Iran, health insurance is a compulsory benefit for employees. The system is bifurcated, with social security providing fundamental coverage and private plans being offered as additional options.

Social Security Health Insurance

Social Security Health Insurance in Iran covers all employees. This program provides basic medical services, including hospitalization, doctor visits, and certain medications. Both employers and employees are obligated to contribute to the Social Security Fund, which finances these health benefits. The contribution rates are determined by law.

Private Health Insurance

Private health insurance is an optional coverage that employers can offer. These plans can supplement the coverage provided by social security, offering benefits such as coverage for a broader range of medical services and procedures, shorter wait times for treatment, and access to private hospitals and clinics. Employees typically have the choice to enroll in a company-sponsored private health insurance plan or obtain their own private plan independently.

The retirement system in Iran is a multi-layered structure with a primary public pension plan and the possibility of participation in private pension plans.

Public Pension Plan

The main pillar of Iran's retirement system is the Social Security Organization (SSO), which provides defined-benefit pensions based on pre-retirement earnings and years of contributions. All employees who contribute to the Social Security Fund during their working life are eligible for a pension upon retirement. The recent legislation raised the retirement age to 62 for men and kept it at 55 for women, with a minimum contribution requirement of 35 years for a full pension. The amount of the pension benefit is calculated based on a formula that considers the employee's average salary during the last two years of employment and the number of contribution years. The replacement rate, which is the percentage of pre-retirement income replaced by the pension, can be quite high, particularly for certain professions covered by the SSO. The public pension system in Iran has faced financial challenges due to various factors, including an aging population and economic fluctuations. The recent reforms aim to ensure the long-term sustainability of the program.

Private Pension Plans

In addition to the public plan, individuals in Iran can opt to participate in voluntary private pension plans offered by private insurance companies. These plans offer various investment options and allow for the accumulation of additional retirement savings. The benefits upon retirement depend on the specific plan chosen and the individual's contributions.