Payroll and Benefits Guide Yemen
Last updated: Mar 03, 2026
Contribution
|
Employer Payroll Contributions
|
|
| 9% | General Corporation for Social Security (GCSS) |
| 9 |
Total Employment Cost
|
|
Employee Payroll Contributions
|
|
| 6% | General Corporation for Social Security (GCSS) |
| 6% |
Total Employee Cost
|
Income Tax
Resident individuals: Progressive annual rates:
• 10% on taxable income up to YER 120,000/year
• 15% on taxable income above YER 240,000/year or other higher brackets depending on exact income band
Non-residents: Flat 20% on Yemen-sourced income
PAYE Withholding: Employers must withhold income tax from salaries monthly and remit to the tax authority.
Employer taxes
Working Hours
The statutory maximum working week is 48 hours, spread over no more than 6 days, with 1 mandatory rest day (usually Friday).In many sectors and contracts, this is structured as 8 hours per day × 6 days.
Overtime
-
Overtime must be paid at not less than 1.5× the normal hourly wage for work on regular working days.
-
For night work, weekly rest days, or public holidays, overtime is compensated at 2× (double) the normal hourly wage.
Payroll
Payroll Cycle
The payroll frequency is monthly.
13th Salary
A 13th-month salary is not required.
Leave
Annual Leave (vacation)
30 working days per year of service with full pay.
Public Holidays
| Date | Day | Holiday Name | Holiday Notes |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| March 18, 2026 | Wednesday | Eid al-Fitr Holiday (Tentative) | |
| March 19, 2026 | Thursday | Eid al-Fitr Holiday (Tentative) | |
| March 20, 2026 | Friday | Eid al-Fitr (End of Ramadan) (Tentative) | |
| March 21, 2026 | Saturday | Eid al-Fitr Holiday (Tentative) | |
| March 22, 2026 | Sunday | Eid al-Fitr Holiday (Tentative) | |
| May 1, 2026 | Friday | Labour Day (May Day) | |
| May 22, 2026 | Friday | Unity Day (Anniversary of Unification) | |
| May 26, 2026 | Tuesday | Eid al-Adha Holiday (Tentative) | |
| May 27, 2026 | Wednesday | Eid al-Adha (Feast of Sacrifice) (Tentative) | |
| May 28, 2026 | Thursday | Eid al-Adha Holiday (Tentative) | |
| May 29, 2026 | Friday | Eid al-Adha Holiday (Tentative) | |
| May 30, 2026 | Saturday | Eid al-Adha Holiday (Tentative) | |
| June 16, 2026 | Tuesday | Islamic New Year (Muharram 1) (Tentative) | |
| August 25, 2026 | Tuesday | Prophet Muhammad’s Birthday (Mawlid) (Tentative) | |
| September 26, 2026 | Saturday | Revolution Day (September 26 Revolution) | |
| October 14, 2026 | Wednesday | Liberation Day (October 14 Revolution) | |
| November 30, 2026 | Monday | Independence Day (British Withdrawal) |
Sick Days
In Yemen, employees are entitled to up to 6 months of certified sick leave per year, paid on a reducing scale (100% → 75% → 50%), with statutory job protection during this period.
Maternity Leave
70 days paid maternity leave per law for female employees.
Bereavement Leave
In practice, 3 days of paid leave is commonly recognized for the death of a close family member
Employer taxes
Termination
Termination Process
In Yemen, terminations must be based on justified reasons such as misconduct, incapacity, redundancy, or economic hardship. Dismissal must follow due process under the Labour Code, and written notice of termination is required. Unlawful dismissal can entitle the employee to compensation.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| Payment periods depend on the terms of the employment contract: monthly, fortnightly or weekly. For monthly pay, wages must be paid not later than the 6th day of the following month; for fortnightly pay, within 3 days after the end of the fortnight; for weekly/daily/hourly pay, at least once a week. | On termination the employer must settle all wages and monetary entitlements. For dismissals without just cause, severance pay is generally calculated as one month’s wage per year of service. | Wages must be paid in legal tender and in money. The law does not clearly mandate payment only via bank account in all cases. |
Notice Period
Employers must generally provide 30 days’ notice for monthly salaried employees.
Employees resigning typically must give 15 days’ notice.
During the probation period, termination may occur with only a short minimal notice (commonly a few days, depending on contract).
Severance Pay
Severance pay is required in cases of redundancy or unlawful dismissal. The amount is usually linked to length of service and the last drawn salary, with courts able to order compensation in disputes.
Probation Period
The trial period is typically up to 3 months depending on the job category, and may be shorter or longer if specified in the employment contract.
Immigration
Foreign nationals must obtain both a work permit and a residence visa to work in Yemen legally. Employers are responsible for sponsoring the application and must demonstrate the need for hiring a foreign worker. Work permits are issued through the Ministry of Social Affairs and Labour and are generally tied to the employer, meaning a new permit is required if the employee changes jobs. Processing usually takes several weeks, and employees must also register for residence permits if staying beyond short-term assignments.
Minimum Wage
The statutory minimum wage in Yemen is set at YER 21,000 per month (≈ USD 85/month) for civil servants and many formal sector workers. This rate has not been revised in recent years and serves primarily as a baseline for the public sector. In the private sector, wages are usually determined by contract or collective bargaining, but the public sector figure is widely referenced.
MINIMUM WAGE (PER MONTH)
VAT
Yemen levies a Value Added Tax (VAT) at 5% on most goods and services. Businesses exceeding the turnover threshold set by the tax authority must register for VAT, charge it on sales (output VAT), and can deduct VAT paid on inputs (input VAT). VAT returns are generally filed monthly, with payments due by the 15th of the following month.
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Public Holidays Calendar
| Date | Day | Holiday Name | Holiday Notes |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| March 18, 2026 | Wednesday | Eid al-Fitr Holiday (Tentative) | |
| March 19, 2026 | Thursday | Eid al-Fitr Holiday (Tentative) | |
| March 20, 2026 | Friday | Eid al-Fitr (End of Ramadan) (Tentative) | |
| March 21, 2026 | Saturday | Eid al-Fitr Holiday (Tentative) | |
| March 22, 2026 | Sunday | Eid al-Fitr Holiday (Tentative) | |
| May 1, 2026 | Friday | Labour Day (May Day) | |
| May 22, 2026 | Friday | Unity Day (Anniversary of Unification) | |
| May 26, 2026 | Tuesday | Eid al-Adha Holiday (Tentative) | |
| May 27, 2026 | Wednesday | Eid al-Adha (Feast of Sacrifice) (Tentative) | |
| May 28, 2026 | Thursday | Eid al-Adha Holiday (Tentative) | |
| May 29, 2026 | Friday | Eid al-Adha Holiday (Tentative) | |
| May 30, 2026 | Saturday | Eid al-Adha Holiday (Tentative) | |
| June 16, 2026 | Tuesday | Islamic New Year (Muharram 1) (Tentative) | |
| August 25, 2026 | Tuesday | Prophet Muhammad’s Birthday (Mawlid) (Tentative) | |
| September 26, 2026 | Saturday | Revolution Day (September 26 Revolution) | |
| October 14, 2026 | Wednesday | Liberation Day (October 14 Revolution) | |
| November 30, 2026 | Monday | Independence Day (British Withdrawal) |
Questions & Answers