Jordan Payroll Outsourcing Alert – Jordan amends personal tax exemptions effective from January 1, 2020.

Global Payroll Outsourcing provider Mercans has issued the following Jordan Payroll Outsourcing alert.

On November 2019, the Ministry of Finance for Jordan introduced Finance (Amendment) Bill 2020, which lowers annual personal tax exemption by JOD 1,000 per person. In accordance to the new bill, the following tax exemptions and brackets apply to salaries paid from January 1, 2020 to Jordanian tax residents:

Annual Income (in JOD)  
From To Tax Rate/Minimum Tax Amount in JOD
Annual Personal Tax Exemptions
1 9,000 0% – If marital status is either single or married and spouse is employed
1 18,000 0% – If marital status is married and spouse is NOT employed
Personal income exceeding the above exemptions will be subject to the following income tax rates
1 5,000 5%
5,001 10,000 10%
10,001 15,000 15%
15,001 20,000 20%
20,001 1,000,000 25%
1,000,001 + 30%

Total annual net income should be rounded to the nearest Jordanian piaster for the income tax calculation purposes.

The revised income tax brackets are applicable to all taxable employment income earned after
1 January 2020. Therefore, the employers are required to apply the new rates and brackets on all compensation.

Please contact your Mercans’ Jordan Payroll Outsourcing services delivery team for any additional information regarding the implications of the above changes.