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• Payroll Frequency: Monthly payroll is standard. Salaries must be paid no later than the sixth day of the following month.

• Income Tax: Employers are responsible for calculating, withholding and remitting personal income tax on employee salaries, allowances and taxable benefits.
• Social Security Contributions: Under Social Insurance Law No. 26 of 1991:
  • Employer: 9% of the insured employee's salary.
  • Employee: 6% of the insured employee's salary.

• Work Injury Insurance: Employers contribute an additional 4% of insured wages towards occupational injury insurance. Employees do not contribute to this insurance.

• Total Social Security Contributions: Employer: 13% (including work injury insurance). Employee: 6%.

• Currency: Yemeni Rial (YER).

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• Contract Types: Fixed-term and indefinite-term employment contracts are recognised. Employment contracts must be in writing and prepared in three copies for the employer, employee and competent labour office.

• Probation Period: The probationary period should be expressly agreed in the employment contract and checked against the applicable employment regulations.

• Working Hours: Maximum of 48 hours per week, generally spread over six working days. During Ramadan, working hours are reduced to six hours per day or 36 hours per week.

• Overtime: Paid at 150% of the basic hourly wage on normal working days and 200% for night work, weekly rest days and public holidays.

• Notice Periods: 30 days for employees paid monthly, 15 days for employees paid fortnightly and seven days for employees paid weekly, daily, hourly or by piecework. Payment in lieu of notice is permitted.

• Termination: Employment may be terminated in accordance with statutory grounds and procedures. Arbitrary dismissal may result in compensation, determined by the competent authority, of up to six months' wages.

• End-of-Service Benefits: Employees not covered by a qualifying social security or alternative pension arrangement are entitled to at least one month's salary for each year of service.

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• Annual Leave: At least 30 days of paid annual leave per year of service. Public holidays falling within annual leave are excluded.
• Sick Leave: Up to eight months of sick leave, structured as follows:
  • First and second months: 100% of wages.
  • Third and fourth months: 85% of wages.
  • Fifth and sixth months: 75% of wages.
  • Seventh and eighth months: 50% of wages.

• Maternity Leave: 70 days of fully paid maternity leave. An additional 20 days are provided in cases of difficult childbirth or multiple births.

• Paternity Leave: No general statutory paid paternity leave entitlement is specified under the Labour Code.

• Public Holidays: Official public holidays are paid. Employees required to work on these days are entitled to double pay in addition to their standard holiday remuneration.

• Weekly Rest: One fully paid rest day per week, generally Friday.

• Hajj Leave: Employees with at least four years of service are entitled to 20 days of paid leave to perform Hajj, once during their employment.

• Occupational Injury Protection: Employers must provide workplace protection and comply with statutory occupational injury insurance requirements.

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• Tax Residency: Tax residency is determined under Yemen's Income Tax Law No. 31 of 1991. The legislation includes specific residence tests based on nationality and physical presence. Certain foreign nationals are considered residents after spending four months in Yemen during the income year, or two consecutive months in specified circumstances.

• Non-Residents: Non-residents are generally subject to tax on income sourced in Yemen.

• Tax Year: The calendar year, January 1 – December 31, is the general reference period, although the legislation also recognises alternative 12-month accounting periods.

• Personal Income Tax: Progressive tax rates apply to employment income, with the statutory resident salary tax rate capped at 20% under Article 50 of the Income Tax Law.

• Taxable Income: Includes salaries, wages, allowances, bonuses, gratuities and qualifying cash or non-cash employment benefits.

• Tax Withholding: Employers must calculate and deduct employment income tax monthly, based on the applicable annual tax brackets.

• Double Taxation Treaties: Treaty relief and applicable international tax arrangements should be assessed according to the employee's circumstances and the relevant tax authority.

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