Nearly five years since the Lebanese lira tumbled, a lucky few had been enjoying relatively “tax-free” fresh dollar salaries. But with new amendments that are set to go into effect in April — and some amendments that are already in effect since February — that could soon change.

But the change is surrounded by confusion, with a number of different social security, tax and other employment-related changes that came as part of Lebanon’s 2024 state budget.

Those new measures include no less than: an increase in daily transportation allowances paid to employees in mid-January, an increase in social security contribution paid to the National Social Security Fund (NSSF), an increase in the minimum wage (from LL9 million to LL18 million]), and the adoption of the market rate of LL89,500LL to the dollar to calculate income taxes and contributions.

“We all have no idea how this will affect us exactly,” one employee told L’Orient Today of the recent, apparently inexplicable, changes to her paycheck, wrought by the new measures.

She and others have been left feeling confused and anxious about what all this means for their salaries. 

L’Orient Today spoke to four private sector employees across different industries in Lebanon to understand how the new changes affected them, and how they feel about it.

‘We pay and get nothing in return’

Yasmina*, a junior employee at a Lebanese insurance company, knew nothing about any increase in her NSSF contribution, but she did however receive an email from her company detailing the new income tax adjustments, which are yet to be implemented.

“I currently make a gross salary of $1,300 [fresh] a month, and am expecting to lose around $91 in taxes every month [starting in April].”

Yasmina, who had been only paying a total of $18 in taxes each month since January and was already unsatisfied with her salary, described the change as “a major blow.”

“You don’t know where the money is going in Lebanon, or if you will ever get it back when you retire. My dad who’s currently in the US pays taxes with an ease of mind because he knows he will be getting something in return,” says Yasmina, “but there’s no credibility, no reliability and no trust in this country. We get nothing in return, so this makes me even more uncomfortable to give up close to $100 of my salary.”

Though she says she is not a big spender and has no dependents, Yasmina was barely able to save even before the tax hike. Now, with price levels rebounding to their pre-crisis levels, if not higher, Yasmina adds that “$100 is a substantial amount. That’s $1,200 a year that I could have saved.”

Yara*, an employee at the Lebanese fintech company Murex, was not aware of the changes until she pulled up her payslips for February and March. Her NSSF contributions had increased from LL540,000 (about $6 at the current market rate) in February, to $15 in March.

“I currently make around $3,000 a month and am not personally bothered by the increase in NSSF contributions,” she tells L’Orient Today. “It’s the upcoming income taxes that I’m worried about.”

“I could lose up to $400 [per month, based on her income bracket] which would cancel out the raise I got over the past two years, ” Yara adds.

“Three to four people have already relocated to our Cyprus offices, where they expect to pay lower taxes and get more perks, like a European passport,” Yara says. And while the anticipated income tax increase was not the main reason behind their decision to move to Cyprus, she says of her coworkers, it was one major factor.

‘A nice surprise’

Wael*, a digital marketing manager at a multinational ad agency in Lebanon, had anticipated a negative impact from the upcoming tax and fee changes, but instead received an increase to his salary

The unexpected surprise only added to his overall confusion about the new tax changes.

“I have no idea how this happened, but I’m currently getting between $100 and $200 extra per month and this was a nice surprise,” says Wael, who was already making $2,100 a month.

“I tried to email the finance department and received no concrete explanation nor any clarification,” he says.

Wael, who also supports his unemployed mother, has been limiting his expenses this past year. If he were to wake up in the coming months and find out any deductions in his salary, he fears his situation would get worse as he “was already unable to put any money aside.”

Lea*, a senior art director at a regional ad agency, was also not negatively affected by the changes as she saw her salary increase by $20. She made $3,200 per month before the recent surprise addition.

“We [I and my coworkers] have no idea why this is happening and this was not properly clarified to us, but all we were told is that we’d be getting an extra $20 dollars for the rest of the year,” she says.

Lea, like many others, says she did not know what NSSF contributions meant, or the difference between those and income taxes. “I’m not sure whether these extra $20 stem from adjustments related to NSSF contributions, or from income taxes.”

She still maintains that she had been stressed since the beginning of the year when Parliament passed the state budget, and started looking for other jobs for fear of losing a big amount from her salary, given the fact that she currently supports her mother and has no safety net beyond her income.

For now, she says she has an agreement with her employer that should her income tax rise, her pay would also increase to match it.