Lebanese Republic (Lebanon)
Navigating international regulations with confidence
Currency
Lebanese pound - LBP
Official Language
Arabic
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Fiscal Year
1 Jan - 31 Dec
Payroll Frequency
Weekly, Bi-weekly & Monthly
Tax System and Regulations
Income Tax Structure
Lebanon operates a progressive income tax system that applies to residents and non-residents, with taxation based on annual income brackets. The personal income tax system is primarily governed by the Lebanese Income Tax Law enacted by Legislative Decree No. 144 dated 12 June 1959 and its subsequent amendments. Personal income tax is levied on various sources of income, including salaries, wages, bonuses, pensions and other employment benefits earned locally. Taxable income is calculated after applying personal deductions and family allowances for dependents (up to five children) and deductions for social security contributions. Social security contributions are mandatory where employers and employees are required to contribute to the National Social Security Fund (NSSF) which covers health insurance, family benefits and end-of-service indemnities. Non-residents earning income from Lebanese sources are also subject to taxation. The tax structure is governed by the Lebanese Ministry of Finance.
Payroll Taxes
Payroll taxes consist of a range of employer obligations related to employee compensation, primarily governed by the Lebanese Income Tax Law (Legislative Decree No. 144 of 1959) and the Social Security Law. Besides income tax with rates between 2% and 25%, employers and employees must contribute to the National Social Security Fund (NSSF). Employers contribute 22.5% and employees 3% of the gross salary. These contributions cover sickness and maternity, family allowances and end-of-service indemnities. Foreign nationals working in Lebanon with valid work and residence permits can receive NSSF coverage (sickness, maternity, family allowances, etc.) only if their home country extends equivalent treatment to Lebanese workers. Payroll taxes are calculated based on gross salaries and are subject to specific rates and ceilings defined by law.
Tax Reporting and Payment Deadlines
Employers are required to withhold personal income tax from employees’ salaries monthly and remit these amounts to the Ministry of Finance on a quarterly basis during the first 15 days of the month following the end of the quarter. NSSF contributions must be submitted by the 15th of the month following payment of salaries. Companies with fewer than ten employees must submit NSSF reports and pay contributions every three months. Additionally, employers are required to submit an annual payroll reconciliation by the end of February of the following year, summarising all wages paid and taxes withheld during the previous fiscal year.
Compliance and Record-keeping
Payroll providers and employers are required to maintain accurate and comprehensive payroll records, including salary details, tax withholdings, social security contributions and employee information. These records must be retained for a minimum of ten years to comply with tax, labour and NSSF regulations. Employers must also keep valid employment contracts, attendance logs, leave records and proof of salary payments such as bank transfer statements to prove payroll calculations. Employers must ensure timely and accurate submission of payroll declarations and payments to avoid penalties. Non-compliance, such as late filings, underreporting or incorrect payments can result in financial penalties, interest charges and potential legal action. The Ministry of Finance enforces strict compliance measures, and rounding rules apply to payroll taxes, requiring amounts to be rounded up to the nearest LBP 10,000 in favour of the treasury.
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