Jordan Payroll Outsourcing and PEO/GEO Services Leader Publishes Payroll & HR Insights for Jordan

Mercans, a leading Jordan payroll outsourcingPEO/GEOemployee leasingrecruitment and BPO services provider, has published its most recent Payroll & HR Insights for Jordan. These insights provide an invaluable overview of the information every Payroll & HR specialist should know before setting up their HR and payroll functions in Jordan or signing up with a payroll outsourcing or PEO/GEO services provider. Mercans’ summary of labor laws, tax and social security regulations in Jordan allow you to navigate the local complexities and avoid pitfalls.

Mercans’ Jordan Payroll Outsourcing Solutions

While this summary will serve you as a great guide, you should still get in touch with Mercans’ Jordan payroll outsourcing, compliance, PEO/GEO and BPO specialists for a free consultation on setting up fully compliant payroll and HR functions. Better yet, outsource your payroll and HR activities in Jordan to Mercans and our Jordan payroll outsourcing experts will ensure that your employees will always be paid on time and in accordance with the Jordan regulations.

Mercans’ Jordan payroll outsourcing solutions are unique and revolutionary:

  • Mercans is not an aggregator – your Jordan payroll outsourcing services will be delivered by Mercans’ dedicated Jordan payroll outsourcing team. No middlemen or subcontractors will ever see your confidential data.
  • We use our proprietary Jordan payroll outsourcing software platform, that has been specifically designed to handle the complexities and requirements of Jordan labor regulations.
  • Your data is always be secure with Mercans – Mercans is the only Jordan payroll outsourcing provider with ISO 9001, 20000 and 27001 certifications; has passed SOC 1 and 2 (both Type 1 and 2) audits; is GDPR compliant and has successfully completed OWASP Type 3.0 penetration tests.
  • Mercans’ Jordan payroll outsourcing software platform can be easily integrated with any global HRMS systems; i.e. Workday, SAP, SuccessFactors, Oracle, Dynamics, etc.
  • Mercans’ Jordan payroll outsourcing fees are transparent and competitive – you will save 30-50% over the service fees of any other comparative Jordan payroll outsourcing provider.

Mercans’ Jordan PEO/GEO Services

If you are already too busy to deal with another country or do not have a local legal entity in Jordan and need to hire staff there, then Mercans’ PEO/GEO services in Jordan are the right solution for you. We will employ the staff on your behalf in Jordan and will ensure the full compliance with the local regulations throughout the hire-to-retire cycle in Jordan. Mercans’ recruitment and immigration specialists will even help you to find the right staff and complete their immigration process in the matter of days.

Mercans does not use any subcontractor’s to deliver Jordan PEO/GEO Services. This ensures that your employees receive the highest quality support in Jordan and our service fees are unbeatable.

1.0 Doing Business in Jordan

1.1 Registrations and Establishing an Entity

Companies in Jordan must register for taxes (including corporate tax, income tax, and VAT) by completing the application form and submitting it to the relevant one-stop-shop counter of the Companies Registry.  The company obtains a unique Tax Identification Number (TIN).

There are two types of operating companies in Jordan

  • A limited period whereupon such companies are awarded tenders and carries out their business in Jordan for a period limited to the duration of a contract. The registration of such companies shall cease upon completion of their business in Jordan.
  • Companies operating permanently in Jordan under a license granted by the authorities.

Registering a company is mandatory for operating the business in Jordan and the documentation requirement for the registration are as follows-

  • A copy of the Articles and Memorandum of Association of the company.
  • The official documents certifying that the company has obtained the approval of the competent Jordanian authorities to perform its business.
  • A list of the names of members of the Board of Directors of the company, the management committee or the shareholders and their respective nationalities, in addition to the names of the authorized signatories of the company.
  • A copy of the power of attorney by virtue of which a foreign company authorized a person resident in Jordan to carry out its activities and receive service letters/notifications on its behalf.
  • The financial statement for the last fiscal year of the company (head office) certified by a licensed auditor.
  • Any other data or information that the controller of Companies deems necessary.
  • The application form for registration must be signed by the person authorized to register the company before the controller of companies, or any person authorized in writing, or public notary.
  • All documents should be legalized by the Jordanian Embassy/consulate, the ministry of foreign affairs in the company’s country of origin, and the Jordanian ministry of foreign affairs. All documents should also be translated into Arabic and legalized by a public notary in Jordan.

1.2 Banking

It is not mandatory to make employee salary payments from an in-country bank account; however, it is mandatory to make third party authority payments from an in-country bank account.

Banks are typically open from 08:30 to 13:00, and some have recently introduced afternoon hours from 16:00 to 18:00.

1.3 Working Week

Friday and Saturday is the weekly holiday when government offices, banks and most offices are closed.  Most businesses and banks have a half-day on Thursday, and some businesses and banks take Sunday as a half-day or a complete holiday.

Government departments are open from 08:00 to 14:00 daily, except Friday.

The maximum working hours are forty-eight during a six-day week.  The seventh day is a paid weekly day off. Additional hours will be considered as overtime and qualify for compensation of 25% over the regular wage, excluding overtime hours worked during public holiday, which are subject to an overtime compensation of 150% of the standard wage.

1.4       Basic Facts about Jordan

General Information:

Full Name: Hashemite Kingdom

Population: 9.702 million

Capital: Amman

Major Languages: Arabic

Currency: Jordanian dinar (JOD)

Main Industries: Clothing, Phosphate Mining, Fertilizers, Pharmaceuticals, Petroleum Refining,

Cement, Potash, Inorganic Chemicals, Light Manufacturing, Tourism

GDP Growth: 2.2%

Internet Domain: .jo

International Dialling Code: +962

How to say: –

Hello As-Salām ‘Alaykum

Good Morning abā-ul Kh-Ayr

Good Evening Masā’ Al-Khayr

Do You Speak English? Hal Tatakallam El-Ingliziyya

Good Bye Bāy Bāy ,Ma`A As-Salāma

Thank You Shukran Jazīlan (Shukran)

See You Soon! Ashoufak ‘Ourayyeb

Dates & Numbers

 

Dates are usually written in the day, month and year sequence. For example, 1 July 2015 or 1/7/15.

2.0 Tax & Social Security

In Jordan, the non- residents are taxed on their Jordan-sourced income. However, married couples are generally taxed separately but they may elect for joint taxation.

Taxable profits include:

  • Interests, Discounts, Exchange Gains and Commissions,
  • Any Obligation or Annuity,
  • Income or rent and other profits from movable and immovable property
  • Capital gains from the disposal of immovable property during the course of a business and from the disposal of property acquired on or after 01 November 1989.

2.1 Income Tax

The modifications to the previous tax law were published in the Official Gazette on 2 December 2018 with an effective date of 1 January 2019 and 1 January 2020, putting into effect Jordan’s new Income Tax Law No. 38 of 2018 (the New Income Tax Law).

The New Income Tax Law has reduced the amount of exemptions available to natural persons and adjusted the treatment of the end of service benefit and pension in arriving at taxable income. Furthermore, modifications have been made to the tax brackets and rates applicable when calculating the personal income tax liability, and a new national contribution tax has been introduced and made applicable to the net income of high-earning individuals.

The following annual personal income tax exemptions apply from 1 January 2020:

 

  • Personal exemption                                                                                                                                           JD 9,000
  • Dependent exemption for a non-employed spouse                                                                                    JD 9,000
  • Additional exemptions for medical expenses, educational expenses, rent, home loan interest, and murabaha                                                                                                                                                                                JD 4,000*

*JD 1,000 for individual, JD 1,000 for spouse and JD 1,000 per child up to JD 3,000. The exemption is granted on a case-by-case basis after the Income Tax Department has reviewed the related supporting documents.

As for the income corporate tax, the amount is as follows:

Sector

Rate

Banking 35%
Electricity generation 24%
Basic mining companies 24%
Finance, financial intermediary and financial leasing 24%
Telecommunication 24%
Drug and Clothes 10%
Insurance and reinsurance 24%
Other sectors 20%

 

Income Tax Table

 

Taxable Income After Applicable Tax Exemptions

Exceeding

Not Exceeding

Rate

JD

JD

%

0 5,000 5
5,001 10,000 10
10,001 15,000 15
15,001 20,000 20
20,001 1,000,000 25
>1,000,000 30

 

For payments made by Resident Taxpayers to Non-Residents for taxable activities in Jordan, taxpayers must withhold 10% of gross payments and remit this withholding tax to the tax authorities within 30 days after the due date or payment date, whichever is earlier.  This tax is final.

2.2 Social Security

Employers with more than five employees are required to register and contribute to the Social Security Corporation. All employees who work for the registered employer have to register with the Social Security Corporation.

Non-Jordanians are subject to the social security deductions if they are residing in Jordan and work for an entity subject to the provisions of the Social Security Law.

According to Law No (1) of 2014, social security rates will be increased in 2015, 2016, and 2017. The increase will be 0.25% on employee share and 0.50% on employer share yearly. This will be fixed after 2017 when employee share will be 7.5% and employer share will be 14.25%.

 

YEAR

EMPLOYEE

EMPLOYER

2015

7%

13.25%

2016

7.25%

13.75%

2017+

7.5%

14.25%

2.3 Reporting

The tax year is the calendar year. Tax returns must be filed in Arabic using a prescribed form within four months after the end of each fiscal year.  The total amount of tax due must be paid at that time.

2.4 New Employees

When a new employee is hired, the employer should submit the ‘Form of insured’s contribution in the Social Security (Form No.1)’ to the Social Security Corporation (SSC) within a maximum of 15 days from the employment start date.

The documents required to register the new starts are as follows-

  • Passport (Expatriates)
  • Residency card (Jordanians)

2.5 Leavers

All leavers must be reported to the Social Security Corporation (SSC) within maximum of 15 days from their last working day.

The employer must report to the SSC the ‘Leavers Contributions Form – From 3 Appendix’ that includes all leavers’ details.

3.0 Payroll

There are no procedures regarding the provision of online payslips.

3.1 Reports

Monthly

Every employer who pays salaries, wages, allowances or bonuses to employees must deduct from such payments the tax due and forward it to the Tax Authorities on a monthly basis.

4.0 Employment Law

4.1 Holiday Accrual / Calculations

Each employee shall be entitled to annual leave with full pay for 14 days per year of service unless more than that period was agreed upon, provided that the annual leave shall be 21 days if the employee remains in the service of the employer 5 successive years.  The public holidays, religious feasts and the weekly holidays shall not be calculated from the annual leave unless they took place during it.

4.2 Maternity Leave

Working Mothers in Jordan are provided with additional legal protection. The labour law in Jordan disallows employers from terminating their jobs or giving them notice about termination if they are past their sixth month of pregnancy or on maternity leave. It also gives mothers 10 weeks of paid maternity leave, as well as an hour a day for breast-feeding during the first year after delivery and a year’s unpaid leave to care for their new-born.

4.3 Paternity Leave

New Fathers in the private sector are obliged to use another type of leave, such as annual leave or unpaid leave in order to support their wives and welcome their new child.

In the public sector paternity leave has been legally recognised and enforced.  Fathers currently receive paternity leave of three consecutive working days during the first month of the child’s birth.

Arguably, paid paternity leave should be in force by law for the private sector too and additional periods of unpaid leave should be granted to new fathers, especially where the mother may have encountered difficulties with her pregnancy or the delivery of the child or where the new-born suffers any complications.

4.4 Sickness

The first 14 days are of Sick Leave are fully paid. The following 14 days are half paid if the employee is not hospitalized and fully paid if the employee is hospitalized.

5.0 Employee Benefits

Jordanian Labour law regulates the relationship between the employer and the employee, which means that any contract or any term in any contract between both parties that contradicts the labour law is considered invalid.

6.0 Visas & Work Permits

All the non-Jordan nationalities must apply for a working permit if they want to work in Jordan; Work permits are issued with the approval of the Ministry of Interior.

An applicant may not begin working in Jordan before obtaining a work permit. Work permits may not be transferred from one employer to another; therefore, if an employee changes employer, the previous work permit is cancelled, and the worker must apply for a new permit.

A work permit is valid for one year and may be renewed each year.  The following are the fees for renewal: –

  • JD 180 for Arab workers in fields other than agriculture or nursing
  • JD 60 for Arab workers in agriculture or nursing
  • JD 300 for foreign nationals working in fields other than agriculture
  • JD 120 for foreign nationals in agriculture

According to Ministry of Labor instructions, an employer must submit a bank letter of guarantee to the order of the Ministry of Labor in the amount of approximately JD 300 to JD 1,000 for each expatriate employee.

Foreign investors may engage in almost any type of economic activity.  Jordan does not impose any limits on foreigners’ investments.  Except for certain sectors, including construction and trade, in which foreign ownership may not exceed 50%, non-Jordanians may fully own any economic project in Jordan. The following types of businesses may be 100% foreign-owned:

  • Agriculture
  • Hotels
  • Health care
  • Mining
  • Industrial
  • Telecommunications

In addition, under the Jordanian Labor Law, non-Jordanians are prohibited from having certain jobs, such as medical and engineering professions, administrative and accounting professions, clerical work including typing and secretarial work, warehouse work, haircutting work, teaching profession and mechanical and car repair profession.

Jordan Payroll Outsourcing

Make sure your employees are always paid accurately and on time with real-time access to your HR and payroll data by allowing Mercans’ Jordan payroll outsourcing team to manage all aspects of your payroll function in Jordan. Mercans’ cutting-edge HRBlizzTM payroll suite is intuitive and transparent: save time, and let technology do the hard work. Mercans’ Business Intelligence and HRIS integration tools tie all of your systems into a single harmonious platform.

Mercans’ Jordan payroll outsourcing offering, leverages Mercans’ more than 20-year experience in delivering payroll outsourcing and PEO/GEO services in Jordan. HRBlizzTM SaaS Global Payroll Suite features, designed for Jordan payroll software and payroll outsourcing clients, include:

  • Integration Jordan tax and social security systems and process.
  • Ability to generate electronic bank files for all major bank in Jordan.
  • Built-in working hours rules in compliance with Jordan labor law.
  • Holiday/annual leave calculations in accordance with Jordan labor regulations
  • Sick pay calculations in accordance with Jordan labor laws
  • Collective bargaining agreements related configurations and support.
  • Income tax calculations in accordance with Jordan tax regulations
  • Tax calculations for non-resident individuals.
  • Foreign tax relief based tax credits.
  • Personal deductions and employment expenses support for tax calculations.
  • Fully configurable setup for unemployment, accident and group life insurances.
  • Customizable and configurable benefits plans.
  • Restricted Stock Units (RSU) tax calculation in accordance with Jordan regulations.
  • Online Employee Self Service (ESS) for delivery of payslips.
  • Fully automated integration with the existing HRIS and third-party systems.
  • Wage type specific gross-to-net or net-to-gross calculations and simulations.
  • Customized calculations formulas for employee benefits.
  • In-kind benefits calculations.
  • Private pension plans administration.
  • Formula and eligibility driven calculations.
  • Automated conversions of annual compensation amounts to monthly, daily and hourly rates.
  • Wage type specific pro-rata calculation rules.

Jordan PEO/GEO Services

React quickly to the market demands and deploy staff anywhere in the world in just days: this is Mercans’ global employee outsourcing and employee leasing services. Mercans PEO/GEO and employee leasing services in Jordan provide you agility, increase your competitiveness and are easy to implement. There is no need for you to worry about setting up a local company, recruiting and payrolling staff. Enjoy the security of Mercans’ guaranteed compliance with the regulations in Jordan. Mobilize any number of resources quickly— and focus on building your business while we take care of the rest.

Jordan Talent Acquisition & Recruitment

Get access to a large pool of global and local talent in Jordan, reduce time-to-hire, and improve hire quality all in one. Our Mesaar recruitment suite uses innovative matching and psychometric assessment tools to identify the best candidates for your business at record speed. Our consultants have extensive experience placing candidates across industries and organizational levels, and we have led executive searches and outsourcing mobilization projects for large multinationals involving thousands of candidates in Jordan and other parts of the world.

Jordan HR Advisory

Tap into the experience of our seasoned HR advisory team in Jordan. Their expertise ranges from HR policies and procedures, salary benchmark studies, and HR due diligence to sophisticated HR transformation projects. Get a speedy and precise needs analysis, and have us design, implement, and monitor the execution of any project—carried out by subject-matter experts who understand your needs, and who know what it takes for your business to stay ahead of the competition.

Jordan BPO Services

Make your business thrive and concentrate on the essentials and let Mercans’ business process outsourcing services minimize your administrative and overhead costs. Fully outsource your back-office functions to a team of HR, finance, accounting, immigration, and administration specialists. Our BPO team will take care of it all while you have the time and freedom you need to nurture your business.

Get in touch with Mercans’ Jordan payroll outsourcing, compliance, PEO/GEO and BPO specialists for a free consultation!