countryintel page main banner

Mercans CountryIntel ® Jordan Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Jordan

Jordan enjoys strong economic and strategic relationships within the MENA region and the world and has emerged as a renewable energy and clean technology destination. With an investor-friendly environment, modern infrastructure, robust economic growth and political stability, Jordan has become a major tourist destination in the Middle East. Despite regional turmoil, Jordan maintains a stable, modern and secure environment, offering exceptional quality of life.

Doing Business in Jordan

Jordan offers an extensive system of incentives aimed at promoting a range of investments. A gateway to the region, Jordan enables investors and entrepreneurs access to over 1 billion consumers. Incentives for economic growth include custom duty exemptions and tax reimbursement on production inputs, exemptions and reductions of the General Sales Tax on production requirements and tax reimbursement on services for manufacturing and vocational activities.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Jordan is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: 9:00 am to 6:00 pm from Saturday to Thursday

Working Week

The standard working week is from Sunday to Thursday from 7:00 am - 2:00 pm

Labor Law

The primary piece of legislation affecting the employment relationship is Jordanian Labor Law No. (8) of 1996, amended in 2019. The latest amendments have a significant impact on a number of aspects of the employment relationship including wages and how wage disputes are resolved, overtime, paternity leave, annual leave, childcare and retirement.

Main Industries

Tourism, information technology, clothing, fertilizer, potash, phosphate mining, pharmaceuticals, petroleum refining, cement, inorganic chemicals, light manufacturing

GDP Growth

2.70%

Dates & Numbers

dd/mm/yyyy

Official State Name

Hashemite Kingdom of Jordan

Population

10.2 million

Capital

Amman

Major Languages

Arabic

Currency

Jordanian dinar

Internet Domain

.jo

International Dialing Code

+962

Jordan
Amman, JO
4:31 am, July 7, 2022
23°C
clear sky

Payroll

Jordanian Labor Law determines that the wage (or salary) is all cash or in-kind entitlements of the employee and any other entitlement of whatever type that is provided for by law or the work contract. An employer who pays a worker less than the minimum rate shall be punished by a fine and shall be ordered to pay the worker the difference. The penalty shall be doubled every time the offense is repeated. Companies that operate a multi-country payroll should take note of Jordan’s recent labor law amendments including the introduction of the concept of wage discrimination (gender-based wage inequality).

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 10 years

Reports

Employees are entitled to 14 days of paid annual leave, and 21 days after completing 5 years

Annual Leave

Employees are entitled to 14 days of paid sick leave

Sick Leave

Employees are entitled to 10 weeks of paid maternity leave and 3 days of paid paternity leave

Maternity & Paternity Leave

7 days notice is required for terminating employees

Employee Termination

Not mandated by law

13th month salary

268 Jordanian dinars per month

Minimum Wage

If an employee has worked over 48 hours per week, they are entitled to overtime at a minimum rate of 125% - 150%

Overtime

If a worker’s employment is terminated before they consume their annual leave, they shall be entitled to receive remuneration for all their remaining leave days.

Severance Pay

Tax and Social Security

Any income incurred in or from Jordan (regardless of the place of payment) shall be subject to tax in Jordan. Social security is a general solidarity insurance scheme that aims to provide social and economic protection to the people of Jordan. Benefits are funded by contributions paid by both insured persons and employers.

Tax

Aside from the personal income tax rates which are applied progressively, amounts exceeding JOD 200,000 of the annual taxable income for individuals will be subject to 1% as national contribution tax.

20%

Corporate Income Tax

30%

Personal Income Tax

16%

Sales Tax

16%

VAT

Social Security

Voluntary subscriptions entails Jordanian citizens being able to subscribe in their old age, disability and death insurance to avail themselves of the benefits provided by social security. This includes pension salaries and disability salaries.

21.7%

Social Security Rate

14.2%

Social Security Rate for Employers

7.5%

Social Security Rate for Employees

Employment Law

Free trade unions may be formed within the limits of the law, wherein any worker has the right to join the trade union if they fulfill membership requirements. As such, employers cannot make the employment of a worker subject to the condition that the worker does not join a trade union. Where there are individual labor disputes, these are settled by the Conciliation Court (except for cases that concern remuneration which are decided upon by the Remuneration Authority).

Employment Agreement

Chapter IV of the Labor Code deals with the contract of employment, which must be drawn up in Arabic. The duration of the contract is set by agreement between the parties. An employer is able to employ a worker on a trial basis, to verify their competence and capacity. This trial or probationary period shall not exceed three months. The employer has the right to terminate the employment of the worker under probation without notice or indemnity during the trial period.

Working condition

Provision of a nursery in the workplace was already required when there are at least 20 female employees in the workplace. This minimum number requirement has been removed. The obligation is now triggered when employees cumulatively have at least 15 children under the age of five.

Leaves

Jordanian Labor Law stipulates that working hours shall not exceed eight per day and a total of 48 hours per week except in cases stipulated by Jordanian law such as persons undertaking general supervision or management or where the nature of work involves traveling within and outside the country.

Employment termination

How an employment contract is terminated depends on a few factors, including whether the contract is unlimited or for a limited period. In the case of the former, if the discharge is found by the court to be arbitrary and in violation of the law, the court may order the employer to reinstate the employee to their job or pay a sum of compensation equal to half of the wage for each year of all the working period. This would be done in addition to the payment in lieu of notice and other entitlements. Where the termination is of limited period work contract and the termination occurs before the term expiry, the employee shall be entitled to al the rights and benefits stipulated in their contact, including due wages until the expiry of the remaining period of the contract (unless dismissal was by virtue of Article 28 of the Jordanian Labor Law).

1 month

Minimum notice period for terminating an employee

8 days

Total number of public holidays

40

Working hours per week

8 days

Total number of days for Compassionate & Bereavement Leave

Immigration

The work permit is required for any non-Jordanian worker legally residing in the country to work for an employer. The work contract is required for the application but where this is not available, a letter from the employer clarifying the period of employment, the nature of the worker’s job and estimated wages will suffice.

Residency permits

In the case of the grant of a five-year residence permit, this may be granted where the petitioner has resided in Jordan for 10 years legally (except for wives of Jordanian men) and where the residency is not for work purposes. A letter of recommendation from the Department of Residency and Borders is required.

Work Permit validity

One year

Required Documents

Company’s name, the worker’s name, address, nature of work, and available branches

Worker’s name, nationality, and profession

Two copies of the worker’ work contract

The company’s valid vocational license

Copy of the worker’s passport

List issued by the Social Security Corporation

Valid medical checkup certificate

Photo of the worker.

Compliant, reliable, error-free and touchless payroll in Jordan

Build the best team and hire top talent compliantly in Jordan. Get in touch with Jordan payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
Tell us where you want to grow.
Our team regional experts are here to support you with global expansion plans.

    Learn how we can help you comply with Local labor law
    Discover the best-in-class Payroll solution