Your guide to payroll in Jordan 

The Jordan payroll system is governed by a combination of the Labor Code, Law No 8 of 1996, Income Tax Legislation, Social Security Law, etc. Each of these laws and regulations impacts how to pay employees in Jordan and how businesses can ensure payroll compliance in Jordan. 

Payroll management in Jordan includes understanding progressive tax brackets, obligations around end-of-service gratuity, mandatory Social Security Corporation contributions, and more. 

This guide helps you know everything about payroll in Jordan. Learn how Payoneer Workforce Management, a trusted EOR service, helps streamline onboarding and Jordan payroll processing efficiently so that payroll compliance is maintained. 

Jordan payroll: Wages and other payments

Jordan payroll processing is not only about monthly employee compensation. Employers in the country have to account for a wide range of payments, including bonuses, overtime, allowances, end-of-service gratuity, etc. 

Each of these is governed by specific provisions under the Labor Code, Law No 8 of 1996. Employers can face legal consequences for not maintaining payroll compliance in Jordan. 

Payroll cycle in Jordan

The payroll cycle in Jordan is monthly. Employees are generally paid on the last day of the month. 

Minimum wage

The minimum wage in Jordan is JOD 260 per month. The payout currency is the Jordanian Dinar (JOD).

Overtime pay

Normal working hours in Jordan are 40 hours per week. 

Employees can work overtime for a cumulative maximum of 30 days per year. The working hours, in addition to the overtime hours, should not cross 10 total working hours per day. 

Overtime pay calculations in Jordan are as follows:

• Overtime for normal days: 1.25 x normal hours rate
• Overtime on weekends and holidays: 1.5 x normal hours rate
• Days off: The off days can be substituted for days off, provided it is approved by the employee. 

Sick pay

Employees in Jordan are entitled to 14 days of sick leave per year with full pay. To be eligible, the employee has to provide a report by a medical practitioner approved by the organization. 

• There can be an extension of the sick leave for a further 14 days with full pay in case the employee is hospitalized. 
• The employee will receive half pay for 14 days of extended sick leave due to non-hospitalization. However, the employee has to provide a valid report from a medical commission, which is approved by the organization. 

Maternity pay

Female employees in Jordan are entitled to 10 weeks (70 days) of maternity leave. 

The maternity leave period is fully paid and includes rest before and after the delivery. Leave after delivery should not be less than 6 weeks. 

Paternity pay

New fathers in Jordan are entitled to fully paid paternity leave for 3 days. 

Severance pay

Employees in Jordan are entitled to severance pay. 

The employee will get half a month’s salary for each year of service, with a minimum of 2 months plus 30 days’ pay in case the employee did not get any notice from the employer. 

Payroll in Jordan: Contributions and deductions

Like Saudi Arabia, in Jordan, both employees and employers have to make mandatory contributions and deductions from the Jordan payroll every month. There are specific employee and employer taxes in Jordan. 

These include income tax withholdings, Social Security Corporation (SSC) contributions, and other applicable deductions. 

Using a cost calculator helps calculate the taxes accurately. This is important for accurate Jordan payroll processing.  

Income tax

The individual income tax in Jordan is progressive in nature. The tax ranges from 5% to 30%. 

Social security contributions in Jordan

The social security contributions in Jordan are governed by the Social Security Corporation (SSC) and are mandatory for most workers. 

The percentage of employer taxes in Jordan for social security contributions is 14.25%. Employee contribution is 7.5%. The social security contributions include:

• Disability, old age, and death insurance
• Maternity insurance
• Workplace injury insurance
• Unemployment insurance

Other employee benefits

Though employees have to pay salary tax in Jordan, they are entitled to several benefits under the Jordan payroll. Some of the most important ones are as follows:

Public health insurance

The Ministry of Health (MoH) provides the public health insurance in Jordan through the Civil Insurance Program (CIP). Public health insurance is not mandatory in the country. 

Approximately 60% of Jordanians are covered under the Civil Insurance Program. This includes public sector employees, retirees, and dependents of employees. 

Earned or annual leave

Employees in Jordan are entitled to earned/annual leave in the country. The number of days of leave depends on the employment tenure of the employee. 

• When an employee’s employment tenure is less than 5 years, the annual leave entitlement is 14 days.
• When an employee’s employment tenure is more than 5 years, the annual leave entitlement is 21 days.

Annual bonus

An annual bonus is optional in Jordanian payroll. It depends on the discretion of the employer. 

Holiday/vacation bonus

There is no separate statutory holiday/vacation bonus for employees in Jordan. They are entitled to fully paid earned/annual leave in the country. The leaves can be for either 14 days (for less than 5 years of employment) or 21 days (for more than 5 years of employment). 

Jordan’s payroll compliance best practices

Ensuring payroll compliance in Jordan is mandatory for employers in the country. This helps mitigate severe legal consequences, such as fines and penalties. Sometimes, the employer’s reputation is also at stake for payroll non-compliance. 

To remain compliant with Jordan’s payroll regulations, employers have to pay constant attention to accurate record-keeping, legal updates, and timely filings. 

Here are some of the best compliance practices that employers must follow in Jordan payroll processing.

• As an employer, you must familiarize yourself with the Labor Code, Law No 8 of 1996 and its amendments. This is the primary law in the country that governs working hours, wages, leave entitlements, and termination clauses. 
• When you hire employees in the country, register them with the Social Security Corporation (SSC) promptly. Ensure that the monthly SSC contributions are submitted on time. 
• Apply the correct progressive tax brackets to the employee’s salary. Make sure that you withhold and remit the withholdings to the Income and Sales Tax Department within the stipulated deadline.  
• Keep employment contracts, payslips, and payment records of employees for a stipulated time. This is required under Jordanian law. Many employers have strong payslip requirements in Jordan. 
• Jordan revises the national minimum wage periodically. Employers must ensure that the salaries are updated accordingly. 
• It is recommended that employers conduct regular internal payroll audits. They must review payroll calculations, filings, and deductions for errors before they turn into compliance issues. 

Your options for payroll services in Jordan

If you intend to optimize employment costs in Jordan, you can select from the payroll services options listed below. These help you choose the right model for effective talent engagement and payroll management in Jordan.

• Setting up a local entity in the country: Setting up a local entity in Jordan is one of the options to make a legal business presence in the country. However, the process requires a lot of formal documentation and other work and is time-consuming. 
• Hiring independent contractors: You can hire independent contractors in Jordan when you are looking to finish a particular task or project. Ensure that you remain safe from misclassification risks, as that can invite legal hassles. 
• An EOR service: Seeking assistance from an EOR service, such as Payoneer Workforce Management, is a preferred option for seamless payroll management in Jordan. These services help maintain Jordan’s payroll accurately, along with onboarding, benefits administration, and more. 

Payoneer Workforce Management not only offers assistance to pay employees in Jordan, but it also supports payroll compliance in Jordan. In addition to helping with seamless payroll management in Jordan, the EOR service also offers support with taxation, employee onboarding and termination, leave entitlements, and so on. 

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