Employer of Record (EOR) Qatar
Article Navigation
In the context of Qatar, our Employer of Record (EOR) Qatar services operate as the legal employer, aligning with the structure in Saudi Arabia. Functioning as a Global Professional Employer Organization (Global PEO), this key role encompasses extensive oversight of various employment aspects. The Employer of Record in Qatar ensures strict adherence to local labor laws and regulations, managing essential tasks such as payroll, taxes, and mandatory benefits, while also crafting fundamental employment agreements.
In Qatar, the Employer of Record (EOR) Qatar assumes crucial responsibilities, including:
- Ensuring rigorous compliance with the country’s employment laws.
- Managing the intricacies of the local payroll process.
- Overseeing the filing of employment-related taxes and necessary paperwork.
- Providing the worker with accurate payslips.
- Facilitating the seamless distribution of the worker’s salary payments.
Optimize your global expansion with our seamless Global PEO services, eliminating the need for entity setup. Our Employer of Record (EOR) Qatar guarantees legal presence, compliance, and Intellectual Property protection, enabling your business to concentrate on its core functions. Navigate global mobility and work visas effortlessly while cultivating a diverse and efficient global workforce. Choose Mercans as your trusted Employer of Record Qatar for a compliant and efficient employment experience for your global workforce.
EOR Solutions in Qatar
Employment Contracts in Qatar
In Qatar, the process of creating and authenticating employment contracts has been streamlined through the innovative Digital Authentication Service. Here’s a step-by-step guide to utilizing this service:
| Access the Multilingual E-Contract System: | Log in to the Ministry's website and select the "Multilingual E-Contract System." If you are a new user, initiate the registration process through the National Authentication System "Tawtheeq" on the website. |
| National Authentication System "Tawtheeq" Login: | Log in through the National Authentication System "Tawtheeq" using a smart card. |
| Create and Print Employment Contract: | Generate and print the employment contract based on the required information. |
| Upload Signed Contract: | After completing the initial steps, attach the employment contract signed by both parties—the worker and the authorized signatory of the establishment—by clicking on "Upload Attachments." |
| Verification Process: | Once the verification process is complete, the contract will appear in the "Contracts Ready to Pay" section. |
| Payment Process: | Select the contract and proceed to click on "Pay." Fill out the payment details and, upon completion, a window confirming "Payment Successfully Completed" will appear. |
| Receipt and E-Authentication: | Print the receipt or have it sent to your email. The contract is then e-authenticated, featuring a new authentication code for easy verification. |
This digitalized authentication process not only enhances efficiency but also ensures a secure and accessible method for both employers and employees in Qatar.
Working Hours
The maximum allowable working hours are 48 per week or eight hours per day. During the Ramadan period, working hours are shortened to 36 hours per week or six hours per day.
Employees have the right to a minimum of one day off per week, typically observed on Fridays. Additionally, employees should refrain from working on more than two consecutive Fridays.
It is mandatory for employees not to exceed five consecutive working hours without taking at least a one-hour break.
Probation Period
Probationary periods, lasting a maximum of six months, are allowed. Within the probation period, the employer must provide a one-month notice if terminating the employee.
Should the employee choose to resign during the probation period, a one-month notice is necessary when moving to another employer within Qatar. However, if the employee intends to depart Qatar, a two-month notice period is applicable.
13th Monthly Salary
Salary payments must be made by the employer at least once a month. There is no legal obligation for 13-month payments, and employers have the discretion to grant bonuses as they see fit.
Employees vs Independent Contractors Compliance
| Factors | Employee | Independent Contractor |
|---|---|---|
| Employment Laws | Governed by Labor Law, Expat Law, Qatari civil law, and other regulations by MADLSA. QFC entities may be subject to different laws. Certain exemptions exist for specific worker categories. | Minimal specific laws governing independent contractors. Generally, laws covering employees apply to contractors. |
| Hiring Practice | Standard application process. Employment and criminal history required. Work permit from the Ministry of Labor required. | Typically engaged via jobs boards. Work permit from each new client required for contractors not operating under an umbrella company. |
| Tax Filing Documents | No personal income tax. Liability for business tax if income generated from Qatari source. | Treated as a business entity. Taxes filed via the Dhareeba Tax Portal. |
| Payer Tax Withholding and Reporting Requirements | No personal income tax withholding. Employees pay their business taxes. | Companies pay Corporate Income Tax (CIT). Corporate tax returns submitted to GTA. Hiring companies do not withhold tax from contractor payments. |
| Other Tax Filing Requirements | Tax year aligns with the calendar year. Returns and payments due within four months of the tax year's end. | No difference for independent contractors. |
| Remuneration | Paid monthly directly into the bank account. | Paid as agreed upon within the contract. |
| Workers' Rights | Governed by Qatar Labor Law. Includes maximum working hours, minimum wage, notice period, and sick leave. | No specific workers' rights under the Labor Law. Governed by the terms of the contract. |
| Benefits | Benefits include food and accommodation allowance. Healthcare provided by the state-run Hamad Medical Corporation. | Benefits governed by the contract. |
| When Paid | Paid on a monthly basis. | Invoiced or payment request submitted. Typically requires payment within a specified timeframe. |
| Classification Criteria | Primarily based on citizenship status. Nationals of Qatar or GCC countries need a work permit. Foreign nationals require visa sponsorship. | No legal distinction between employees and independent contractors. Visa sponsorship required for all work in Qatar. Independent freelancing without a visa sponsor is illegal. |
Note: The Qatari law does not legally distinguish between employees and independent contractors. Instead, the primary legal distinction is the citizenship status of the individual. Hiring companies should be cautious and ensure proof of existing visa sponsorship when engaging with independent contractors due to the illegality of independent freelancing without proper sponsorship in Qatar.
Social Security in Qatar
In Qatar, employers are obligated to contribute to social insurance on behalf of Qatari employees. This forms a crucial part of the employment framework, ensuring financial security and support for the workforce.
Tax Landscape and Evolving Regulations
While Qatar does not currently impose net wealth/worth taxes, inheritance or gift taxes, property taxes, or luxury and excise taxes, it is important to note the dynamic nature of the tax landscape. The Gulf Cooperation Council (GCC) countries, including Qatar, have embarked on the introduction of a Value-Added Tax (VAT) system. Qatar is in the process of finalizing its VAT legislation, marking a significant development in the region’s fiscal policies. Additionally, excise taxes on specific goods are already in effect, and customs duties continue to be applied, emphasizing the need for businesses to stay informed and compliant with evolving tax regulations.
The General Retirement and Social Insurance Authority (GRSIA) of Qatar has introduced changes to the Social Security and Pension Law, impacting private sector employees in the country. The revised contribution rates, effective from 3 January 2023, aim to enhance the social security framework. A comparison between the new rates and the previous rates, along with the basis of calculation, is outlined below:
| Nationality | NEW RATES | OLD RATES |
|---|---|---|
| Qatar | 7% (Employee) / 14% (Employer) - Basic salary + Social allowance + Housing allowance* | 10% (Employee) / 10% (Employer) - Basic salary + Social allowance |
Note: The social security contributions in Qatar are calculated according to the Social Security Law, with the contributory wage (basic salary plus social and housing allowance) capped at a maximum limit of 100,000 QAR. As of January 3, 2023, the contribution comprises 21% of the contributing wage, with the employer’s share at 14% and the employee’s share at 7%. The rates provided here for Qatari nationals reflect the recent adjustments, and the previous rates are presented for comparative purposes.
Payroll in Qatar
Minimum Wages
As of December 2023, Qatar’s current minimum wage stands at QAR 1,800.00 per month, a benchmark that has been in effect since March 20, 2021. This inclusive amount comprises QAR
1,000.00 as the basic monthly wage, supplemented by a housing allowance of QAR 500.00 and a food allowance of QAR 300.00. Ensuring fair compensation, this national minimum wage reflects Qatar’s commitment to providing a decent standard of living for its workforce. All values are denominated in Qatari Rial.
Payroll Cycle
In Qatar, employees engaged on an annual or monthly basis are required to receive their payments at least once a month. For other employees, the payment frequency must be no less than once every two weeks. It is obligatory to conduct these transactions in the local currency, specifically the Qatari Riyal (QAR). Employers must ensure that payments are disbursed within seven days following the conclusion of the respective pay period.
How Mercans Can Help
Qatar Employee Hiring Cost
In the process of expanding our team in Qatar, let’s consider hiring a new member with an estimated gross annual salary of USD 10,000. The breakdown of monthly and yearly costs includes a gross monthly pay of USD 833.33 for the employee. Additionally, the employer incurs an extra cost of USD 100 for social insurance and contributions. The hiring process involves a service fee from a recruitment platform, such as Skuad, amounting to USD 699. Consequently, the total monthly cost of employment encompasses the gross monthly pay, employer cost, and Skuad fee, totaling USD 1,632.33. Factoring in estimated taxes and contributions at approximately USD 41.67, the employee’s net monthly salary stands at USD 791.66. This example provides a detailed overview, aiding in transparent budgeting and decision-making for our expansion endeavors in Qatar.
Industry Sector Average Annual Salary (In US$):
Termination, Notice Period and Severance Pay
Employee Benefits in Qatar
Statutory Leaves in Qatar
In Qatar, statutory leaves are governed by specific regulations, encompassing annual leave, sick leave, and maternity leave to ensure employees’ well-being and work-life balance.
Annual Leave
Employees with a tenure of one to five years are entitled to three weeks of annual leave, while those with over five years of service receive four weeks. Furthermore, up to 50% of the annual leave entitlement can be carried over to the following year upon the employee’s request. In addition to annual leave, employees enjoy 11 public holidays annually if they fall on a workday. Those with over three months of service are guaranteed a minimum of 20 working days per year.
Sick Leave
After completing three months of service, employees in Qatar are entitled to sick leave with corresponding pay. This includes two weeks at 100% pay, followed by an additional four weeks at 50% pay. In cases where sickness extends beyond six weeks, unpaid sick leave, for a maximum of 12 weeks, becomes applicable. Employers may dismiss an employee without notice after this period, emphasizing the importance of medical certification for sick pay eligibility.
Maternity Leave
For female employees with at least one year of continuous service, Qatar mandates 50 days of maternity leave at full pay. Notably, a minimum of 35 days must be taken after childbirth. In situations involving pregnancy-related health issues, employees are entitled to an additional 60 days of unpaid leave. Furthermore, mothers are granted daily nursing breaks of up to one hour for one year following the child’s birth, highlighting the commitment to supporting working mothers during this significant life event.
Public Holidays
| Date | English name | Description |
|---|---|---|
| Second Tuesday in February | National Sports Day | A public holiday initiated in 2012. |
| 18 December | Qatar National Day | Qatar's National Day celebration. |
| 1st, 2nd, 3rd Shawwal | Eid al-Fitr | Observance marking the end of Ramadan. |
| 10th, 11th, 12th Zulhijjah | Eid al-Adha | Commemoration of Ibrahim's willingness to sacrifice his son, also referred to as the Big Feast (celebrated from the 10th to 13th). |
Personal Income Tax in Qatar
Qatar does not levy personal income tax; instead, it imposes a 10% income tax on businesses based on their taxable income.
Wage Protection System (WPS)
The Wage Protection System (WPS) serves as an essential tool for businesses, providing an electronic platform for streamlined salary transfers to workers through authorized banks. Developed by Qatar Central Bank, this system, mandatory for all institutions registered with the Ministry, ensures accurate and timely wage payments within the private sector. Specifically tailored for various labor categories, the WPS guarantees adherence to agreed-upon salary disbursements.
For businesses seeking efficiency, the WPS Portal offers a convenient online solution to transfer employees’ salaries directly from the office with a simple click, saving valuable time without endorsing alternative payment methods.
Work Permit in Qatar
A Qatar work permit, also known as a work visa, is an official document granting authorization to foreign individuals, including Indians, allowing them to undertake employment within Qatar. This legal instrument plays a crucial role in facilitating lawful employment for foreign workers in the host country.
Eligibility Criteria for Qatar Work Permit
Prospective applicants must meet specific eligibility criteria to qualify for a Qatar work permit:
Valid Purpose
Applicants must have a legitimate and valid reason for seeking employment in Qatar.
Professional Experience
A minimum of 2 years of relevant work experience with a previous employer is typically required.
Financial Capability
Demonstrating financial sufficiency to cover living expenses for the duration of the stay, including any dependents, is essential.
Intention to Return
Providing clear documentation indicating the intention to return to the home country after the specified employment period is crucial.
Clean Record
Applicants should have a clean record without any criminal activities. This may necessitate providing a Police Clearance Certificate (PCC) during the application process.
Health Requirements
Meeting the basic health parameters stipulated by the authorities is a prerequisite for obtaining a Qatar work permit.
Conclusion
In conclusion, Mercans’ Employer of Record (EOR) services in Qatar offer a seamless solution for businesses aiming to expand their operations. With expertise in payroll, compliance, and comprehensive HR solutions, Mercans ensures a smooth and compliant entry into the Qatari market, allowing organizations to focus on their core objectives while leaving the complexities of employment management to the experts. Trust Mercans to navigate the intricacies of local regulations, enabling a successful and compliant business presence in Qatar.