Tax Contribution Cap Raised in Jordan
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Jordan Payroll Outsourcing Alert– Social Security Contribution Cap revised Effective from January 1, 2020
Jordan payroll outsourcing leader issues a statutory alert for Jordan.
Mercans has alerted its Jordan payroll outsourcing clients of Tax Cap related changes.
Effective from January 1, 2020, the Kingdom of Jordan has increased the maximum monthly salary amount that is subject to social security contributions from JOD 3,186 to JOD 3,328. The new maximum applies to employees who were enrolled with the Jordanian Social Security Corporation (“SSC”) by their first employer in the country after October 15, 2009.
For employees registered with SSC before October 15, 2009, the monthly salary cap remains at JOD 5,000. The revised maximum salary is subject to social security and applies to all compensation received after January 1, 2020.
Social security contributions are calculated by the Jordanian SSC based on employees’ monthly fixed remuneration, inclusive of any fixed allowances or supplemental compensation, declared to SSC by their employers at the beginning of the respective calendar year. The current social security contribution rate for employees is 7.5% and 14.25% for employers.
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