Hiring employees in Lebanon means navigating a compliance environment shaped by one defining reality: the country operates on two currencies at once. Statutory obligations (income tax, National Social Security Fund contributions, and minimum wage) are all denominated in Lebanese Pounds (LBP), while most professional employers pay salaries in US dollars. Foreign companies hiring in Lebanon need to understand how these two worlds connect, because the official conversion rate determines what you owe, not what you pay.
The dual-currency reality: lbp obligations on USD salaries
Lebanon’s economic crisis triggered a severe depreciation of the LBP, and the unofficial market rate diverged sharply from the official rate. For tax and social security compliance purposes, the Lebanese government uses the official Sayrafa rate of LBP 89,500 per USD to convert foreign-currency salaries into LBP.
This matters for foreign employers in a concrete way. If you pay an employee USD 1,500/month, the authorities treat that as LBP 134,250,000/month for the purposes of calculating NSSF contributions and income tax withholding. Your actual USD cost will reflect the LBP-denominated caps and brackets once converted back, so the effective burden in hard currency is often lower than the headline percentage rates suggest.
NSSF contribution bases and income tax brackets are both set in LBP. Because those LBP figures haven’t kept pace with real-world USD salary levels, the contribution caps cut in at relatively modest USD equivalents. Understanding that gap is essential before you budget for a Lebanese hire.
Nssf employer contributions
The National Social Security Fund is Lebanon’s primary statutory benefits scheme. Employers contribute across three separate funds, each with its own rate and contribution base.
Sickness and maternity: 8% of monthly wages, capped at a monthly base of LBP 120,000,000. The maximum monthly employer contribution under this heading is LBP 9,600,000.
Family allowance: 6% of monthly wages, with a much lower cap: the maximum monthly base is LBP 18,000,000, making the maximum monthly contribution LBP 1,080,000.
End-of-service indemnity: 8.5% of monthly wages, subject to a salary cap per NSSF memoranda. This fund finances Lebanon’s statutory end-of-service gratuity, which replaces a separate employer-funded severance pool.
Combined, employer NSSF contributions total approximately 22.5% of wages. The LBP caps on each fund’s contribution base mean that for employees earning USD salaries above modest thresholds, you’ll hit the ceiling quickly. Employers should verify current caps directly with the NSSF, as these figures are subject to periodic adjustment.
Nssf employee contribution
Employees contribute to the NSSF as well, though only to the medical scheme. The employee rate is 3% of monthly wages, subject to the same LBP 120,000,000 monthly base cap that applies to the employer’s sickness and maternity fund.
The maximum monthly employee NSSF contribution is therefore LBP 3,600,000. As the employer, you’re responsible for deducting this from the employee’s salary and remitting it to the NSSF alongside your own contributions.
Income tax withholding
Lebanon taxes employment income under a progressive personal income tax (PIT) system. The employer is responsible for withholding income tax from employee wages each month and remitting it to the Ministry of Finance.
The 2026 annual PIT brackets are:
| Annual taxable income (LBP) | Rate |
|---|---|
| Up to 360,000,000 | 2% |
| 360,000,001 to 900,000,000 | 4% |
| 900,000,001 to 1,800,000,000 | 7% |
| 1,800,000,001 to 3,600,000,000 | 11% |
| 3,600,000,001 to 7,200,000,000 | 15% |
| 7,200,000,001 to 13,500,000,000 | 20% |
| Above 13,500,000,000 | 25% |
Before applying the brackets, employees are entitled to annual tax-free exemptions. A single individual receives LBP 450,000,000/year. If the employee’s spouse is unemployed, an additional LBP 225,000,000 exemption applies. Each dependent child adds LBP 45,000,000, for up to five children.
USD-denominated salaries are converted at the official LBP 89,500/USD rate to determine which brackets apply. Employers must calculate the annual tax liability, divide it into monthly instalments, withhold accordingly, and file periodic returns.
Minimum wage and transportation allowance
Lebanon’s statutory minimum wage is LBP 28,000,000 per month, effective from August 1, 2025, and carried forward into 2026. That total includes a mandatory transportation allowance of LBP 9,000,000/month.
At the official exchange rate of LBP 89,500/USD, the combined minimum equates to approximately USD 310–315/month. In practice, most professional roles in Lebanon pay well above this floor in USD, but the LBP minimum remains the legal baseline for compliance purposes.
Standard working hours are 48 hours per week and 8 hours per day under Lebanese labour law. Overtime rates apply beyond those thresholds.
Non-resident withholding
When a foreign company pays a Lebanese-resident individual or entity for services, different withholding rules apply. Lebanon imposes a non-resident withholding tax of 8.5% on payments for services and 3.4% on payments for goods.
These rates are relevant for foreign companies engaging Lebanese contractors or suppliers rather than direct employees. If you’re paying an independent contractor rather than an employed worker, the services rate of 8.5% is the applicable withholding obligation. The distinction between employee and contractor also carries NSSF implications, so classification decisions should be made carefully.
What employer costs look like in practice
The LBP-denominated NSSF caps mean the headline 22.5% employer contribution rate doesn’t translate to a 22.5% cost on USD salaries above certain thresholds. At the monthly base caps, the NSSF contributions in USD are relatively small once you convert back at LBP 89,500/USD.
Here’s an illustration using a USD 1,500/month salary (LBP 134,250,000/month at the official rate):
NSSF employer contributions:
- Sickness and maternity (8%): The base is capped at LBP 120,000,000, so the contribution is LBP 9,600,000 (approximately USD 107)
- Family allowance (6%): The base is capped at LBP 18,000,000, so the contribution is LBP 1,080,000 (approximately USD 12)
- End-of-service indemnity (8.5%): Applied to LBP 134,250,000 (no cap exceeded at this salary), giving LBP 11,411,250 (approximately USD 128)
Total employer NSSF cost at USD 1,500/month: approximately USD 247/month, or roughly 16.5% of the gross USD salary. The effective rate is lower than 22.5% because two of the three funds hit their LBP base caps before reaching the full salary.
NSSF employee deduction:
- Medical scheme (3%): Base capped at LBP 120,000,000; contribution is LBP 3,600,000 (approximately USD 40)
Income tax: Annual gross in LBP is LBP 1,611,000,000. After the single individual exemption of LBP 450,000,000, taxable income is LBP 1,161,000,000. Applying the progressive brackets yields a tax bill in the 7%–11% range on the taxable portion, with the employer responsible for withholding the monthly instalment.
These figures are illustrative. Actual amounts depend on the employee’s exemptions, the NSSF’s current memoranda on end-of-service caps, and exchange rate movements.
How an EOR simplifies lebanese employer tax compliance
Lebanon’s dual-currency compliance framework, layered NSSF filing obligations, and monthly income tax withholding requirements create meaningful administrative complexity for foreign employers without a local entity. An Employer of Record (EOR) employs the worker on your behalf, handles all NSSF registrations and remittances, withholds and files income tax, and ensures your payroll meets Lebanese Labour Code requirements.
RemotePass provides EOR coverage in Lebanon, managing the LBP conversion calculations, NSSF filings, and tax withholding so you don’t need to establish a local entity or build in-house expertise in Lebanese compliance. Their EOR services keep your Lebanon hires compliant as NSSF caps and tax parameters shift over time.
Book a demo to see how RemotePass handles Lebanese employer tax compliance end to end.
