Iran Personal Income Tax

Salary (employment) income tax

Salary tax is governed mainly by Articles 84–85 of the Direct Taxes Act, with the annual exemption and bracket thresholds reset each year by the annual budget law. The figures below are the FY1404 (2025-26) amounts.

• Annual salary tax-free exemption (FY1404) — IRR 2,880,000,000 per year (≈ IRR 240,000,000 per month) is exempt from salary tax IRR ((approx — confirm against the FY1404 budget law)) (Direct Taxes Act (DTA), Article 84; FY1404 Annual Budget Law)
• Salary band — 10% — On taxable salary above the exemption up to 5× the annual exemption, the rate is 10% percent (Direct Taxes Act (DTA), Article 85 / Annual Budget Law salary table)
• Salary band — 20% — On the portion above 5× the annual exemption (up to the next budget-set threshold), the rate is 20% percent (Direct Taxes Act (DTA), Article 85 / Annual Budget Law salary table)
• Salary band — top rate — On high salaries (e.g. monthly salary above ~IRR 320,000,000 / annual above ~IRR 3,840,000,000), the excess is taxed up to 35% percent ((approx — confirm bracket thresholds in FY1404 budget law)) (Direct Taxes Act (DTA), Article 85 / FY1404 Annual Budget Law)
• Government employee salary rate — Historically a flat 10% applied to public-sector salary income above the exemption (Article 85); confirm current treatment, as recent budgets harmonised public/private brackets percent ((approx — confirm whether public/private rates are now unified)) (Direct Taxes Act (DTA), Article 85)
• Withholding on salary (PAYE-equivalent) — Employers must withhold salary tax monthly and remit it to INTA within 30 days of payment (Direct Taxes Act (DTA), Article 86)

Business and other personal income

Income of individuals from business, profession, property and other sources (outside employment) is taxed under the progressive brackets of Article 131, after applicable exemptions.

• Article 131 band 1 — 15% — Annual taxable income up to IRR 2,000,000,000 is taxed at 15% percent ((approx — band threshold was IRR 500,000,000 in earlier law; confirm FY1404 indexed amount)) (Direct Taxes Act (DTA), Article 131)
• Article 131 band 2 — 20% — Income in the next band (above band 1, roughly double band 1) is taxed at 20% percent ((approx — confirm indexed threshold)) (Direct Taxes Act (DTA), Article 131)
• Article 131 band 3 — 25% — Income above the upper Article 131 threshold is taxed at 25% percent (Direct Taxes Act (DTA), Article 131)
• Individual residence test — An individual is generally treated as Iranian-resident based on domicile/residence in Iran; resident individuals are taxed on worldwide income, non-residents on Iran-source income ((approx — confirm precise residence criteria/day-count)) (Direct Taxes Act (DTA))
• Annual exemption for business individuals — Individual business/professional taxpayers receive an annual personal exemption equal to the salary exemption (Article 101); confirm the FY1404 figure IRR ((approx — confirm FY1404 amount)) (Direct Taxes Act (DTA), Article 101)
• Filing & payment deadline (business income) — Annual return due by the end of the fourth month after fiscal year-end (~22 July); tax payable with the return ((approx — confirm exact date)) (Direct Taxes Act (DTA), Article 100)