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The social security system in Iran is regulated by a law of 1975 on social security and a law of 1986 on self-employed insurance. Together they provide for a social insurance system.
The Iranian Social Security Organization, a public non-governmental institution with a socio-economic nature, is the major and most inclusive provider of social protection based on social insurance principles.
The organization is administratively and financially autonomous and relies on a tripartite structure of employees, employers and the Government.
The system covers all employed and self-employed persons.
2. Main Classifications of Social Security Insurance
Based on social security laws and regulations, there are two main types of social security insurance in Iran:
(i) Compulsory Insurance: A person who works at a workplace under the direction of an employer or his agent and receives a wage or salary must be insured by his employer. The social security charge is levied on income up to a certain ceiling which is revised annually.
(ii) Voluntary Insurance: According to social security Law, individuals who are not covered by compulsory insurance can be insured voluntarily through a contract in accordance with the relevant regulations approved by the High Council of Social Security. Such individuals must not be over the age of 55 and must have recorded at least 30 days of contribution payment.
3. Payment of Social Security Insurance Premium
- A Social Security Insurance premium should be paid for each employee. This should amount to 33% of the employee’s salary which should be paid as follows:
(i) 20% will be paid by the employer
(ii) 3% will be paid by the Government
(iii) 7% will be paid by the employee
(iv) 3% of unemployment insurance will also be paid by the employer for Iranian employees only.
- Those who voluntarily applied for Social Security insurance have to contribute between 12% and 18% of their income depending on the protection sought.
4. Benefits of Social Security Insurance
The social security Insurance covers the following:
- Accident and sickness
- Maternity and Confinement
- Sickness Benefits
5. Penalties for Non-payment of Compulsory Social Security Insurance
Article 183 of Iran Labour Law states that:
“Employers who refuse to insure their workers, in addition to paying all workers’ rights, will be fined up to two to ten times the relevant premium, considering conditions of the offender and the amount of the offence”.
In addition to this, the employee is able to sue his employer for non-payment of his social security insurance premium.
6. How to Pay Social Security Insurance Premium
Article 30 of Social Security Law of Iran states that:
“The employer is required to pay each month’s insurance contribution to the organization no later than the end of the following month. He shall also submit to the organization a list of wages or salaries of the insured persons…”
The premium recipient is the nearest branch or agency of the social security organization.
7. Social Security Insurance of Foreigners in Iran
According to a law ratified on September 26, 1979 by the Islamic Consultative Assembly, foreigners are also required to pay the social security premium to the SSO and shall be covered by SSO regulations except in the following cases:
- a) Where a bilateral or multilateral treaty is operational between the country of origin of such alien and the government of the Islamic Republic of Iran where regard has been made to Social Security, the contents of such a treaty shall be complied with;
- b) Where an alien produces a certificate of his government authorities evidencing that during his employment in Iran he has been insured in his own country or any other country for any or all the instances enumerated in Article 3 of the Social Security Act. In which case, the said employees shall be exempted from payment of the premium in respect of the certified instances only.
8. Protest against Social Security Insurance Premium
Article 42 of Social Security Law of Iran states that:
“If the employer should object to the amount fixed by the organization for the insurance contribution and penalties for delayed payments, he may, within 30 days of the date of notification, submit his protest to the organization in writing. The organization is required within thirty days of the date of receipt thereof to present same to a Board of First Instance for Assessing Claims. Where no protest is received from the employer during the period specified, the assessment of the organization shall be final and the amount of insurance contribution and the penalties as determined will be collected in accordance with the Article 50 of this law”.