Hire in Jordan through our Employer of Record (EOR)

Jordan's employment landscape is characterized by a complex mix of challenges and opportunities. The country faces significant unemployment issues, particularly among youth and women, alongside a mismatch between available skills and market demands. Despite these challenges, Jordan's workforce is diverse, with a strong emphasis on the service sector and a growing focus on developing high-skilled labor to meet evolving economic needs.

Overview of Labor Laws

Jordan's labor laws aim to protect both employers and employees, establishing a framework for fair employment practices. Key aspects include:

• A standard workweek of 48 hours, with provisions for overtime pay
• Mandatory social security contributions for both employers and employees
• Minimum wage regulations, periodically reviewed and adjusted
• Provisions for annual leave, sick leave, and maternity leave
• Regulations on termination of employment and severance pay

These laws apply to most sectors, with some exceptions for agricultural workers and domestic helpers. It's crucial for employers to stay updated on these regulations to ensure compliance.

Cultural Considerations

Understanding Jordan's cultural nuances is essential for successful business operations:

• Family-centric society: Work-life balance is highly valued, with family commitments often taking precedence
• Relationship-building: Investing time in personal relationships before business discussions is common practice
• Indirect communication: Jordanians often prefer subtle, indirect communication to maintain harmony
• Hierarchical structure: Respect for authority and seniority is deeply ingrained in the workplace
• Hospitality: Expect social interactions and invitations as part of building professional relationships

Adapting to these cultural norms can significantly enhance workplace dynamics and business success in Jordan.

Challenges of Direct Hiring

Direct hiring in Jordan presents several challenges:

1. Complex labor laws: Navigating the intricacies of Jordanian labor regulations can be daunting for foreign companies
2. Language barrier: While English is widely used in business, Arabic proficiency may be necessary for certain roles and interactions
3. Skill mismatch: Finding candidates with the right skill set can be challenging due to the gap between education and market needs
4. Cultural adaptation: Ensuring that foreign management practices align with local cultural expectations can be difficult
5. Administrative hurdles: Obtaining necessary work permits and visas for expatriate employees can be time-consuming and complex

These challenges underscore the potential benefits of partnering with a local expert or using an Employer of Record service to navigate the Jordanian employment landscape more effectively.

Jordan's payroll and tax system is designed to support the country's social welfare programs while ensuring fair contributions from both employers and employees. The system encompasses various elements, including social security contributions, income tax withholding, and additional taxes for high-income earners. Understanding these components is crucial for both employers and employees to ensure compliance with Jordanian tax laws and regulations.

Employer Contributions

Employers in Jordan play a significant role in the country's tax and social security system. They are responsible for several contributions and withholdings:

Social Security Contributions

Employers are required to contribute 14.25% of an employee's gross salary to the Social Security program. This program provides essential benefits such as:

• Retirement pensions
• Disability benefits
• Survivor benefits
• Coverage for work-related injuries

Income Tax Withholding

Employers must withhold income tax from their employees' salaries. The tax rates are progressive, ranging from 5% to 30%, depending on the employee's income level. Key points include:

• Withheld taxes must be reported and paid to Jordanian tax authorities regularly, typically on a monthly basis
• Proper calculation and timely remittance of these taxes are crucial for compliance

National Contribution Tax

For high-income earners with an annual taxable income exceeding JOD 200,000, employers must withhold an additional 1% National Contribution Tax.

Other Potential Taxes

Depending on the nature of the business, employers may be subject to additional taxes such as:

• Property taxes for business-owned real estate
• Stamp duties for certain transactions or documents

It's important to note that tax laws and regulations can change. Employers should stay informed about the latest updates and consult with tax professionals to ensure full compliance.

Employee Contributions

Employees in Jordan also have tax and social security obligations. Their contributions are primarily deducted from their salaries by their employers:

Income Tax

The primary tax deduction for employees is income tax. Key features include:

• Progressive tax rates ranging from 5% to 30%
• Rates increase as income rises
• Personal exemptions are available to reduce taxable income

Social Security Contributions

Employees contribute 7.5% of their gross salary to Jordan's Social Security fund. This contribution covers various benefits, including:

• Retirement pensions
• Disability benefits
• Survivor pensions

Withholding Taxes for Specific Professions

Certain professions may be subject to additional withholding taxes:

• Applies to fields such as medicine, law, engineering, and accounting
• Typically withheld at a flat rate
• This is in addition to regular income tax deductions

Understanding these contributions is essential for employees to manage their finances effectively and ensure they're receiving the correct net salary.

In conclusion, Jordan's payroll and tax system requires active participation from both employers and employees. By fulfilling their respective obligations, they contribute to the country's social welfare programs and overall economic stability. It's crucial for both parties to stay informed about their responsibilities and any changes in tax laws to maintain compliance and avoid potential penalties.

Navigating employee benefits in Jordan can be complex, but understanding the mandatory and optional benefits is crucial for both employers and employees. An Employer of Record (EOR) like Rivermate can simplify this process by managing these benefits on behalf of companies, ensuring compliance with local laws and regulations while also helping to implement competitive optional benefits packages. Let's explore the landscape of employee benefits in Jordan.

Mandatory Benefits

In Jordan, several benefits are mandated by law and must be provided to employees:

• Social Security Contributions:

  • Combined contribution of 21.75% of gross monthly salary
  • Employer contributes 14.25%
  • Employee contributes 7.5%
  • Covers old age pension, disability benefits, and survivor benefits

• Paid Leave:

  • Minimum 14 days of paid annual leave after one year of service
  • Paid leave for all official Jordanian public holidays
  • Paid sick leave (duration may vary)
  • 60 days of paid maternity leave for female employees
  • Limited paid paternity leave (duration may vary)

• Other Mandatory Benefits:

  • Severance pay based on length of service
  • Notice period before employment termination (duration depends on contract and labor law)

Optional Benefits

Many companies in Jordan offer additional benefits to attract and retain top talent:

• Transportation Allowances:

  • Help cover commuting costs, especially beneficial in larger cities

• Flexible Work Arrangements:

  • Remote work options
  • Compressed workweeks
  • Improve work-life balance

• Professional Development Opportunities:

  • Training programs
  • Conference attendance
  • Educational stipends

• Life and Disability Insurance:

  • Provides financial security for unforeseen circumstances

• Additional Optional Benefits:

  • Subsidized meals
  • Gym memberships
  • Recreation facilities
  • Childcare assistance
  • Profit-sharing plans
  • Stock options

By leveraging an EOR like Rivermate, companies can ensure they're meeting all mandatory benefit requirements while also implementing competitive optional benefits packages tailored to their industry, size, and budget. This approach not only ensures compliance but also helps in attracting and retaining top talent in Jordan's evolving job market.

The process of termination and offboarding in Jordan is governed by specific labor laws that protect both employers and employees. Understanding these regulations is crucial for companies operating in the country to ensure compliance and maintain positive relationships with their workforce.

Grounds for Termination

In Jordan, employment contracts can be terminated for various reasons, including:

• Mutual agreement between employer and employee
• Expiration of a fixed-term contract
• Completion of a specific task
• Employee resignation
• Employee's death or imprisonment
• Force majeure events
• Dismissal for cause (e.g., serious misconduct, repeated violations of company policies, incompetence, or extended unexcused absence)

Notice Requirements

When terminating an employment contract, proper notice is essential:

• Employers must provide at least one month's written notice to the employee
• Employees resigning must give notice based on their payment structure:
  • Monthly pay: At least one month's notice
  • Weekly or daily pay: At least two weeks' notice

Failure to provide proper notice results in compensation equivalent to the notice period wages.

Severance Pay

Jordan mandates severance pay for dismissed employees:

• Indefinite contracts: One month's salary for each year of service
• Fixed-term contracts: Remaining wages for the contract term if terminated prematurely by the employer

Offboarding Process

To ensure a smooth transition, consider the following steps:

1. Conduct an exit interview
2. Retrieve company property
3. Revoke access to systems and facilities
4. Process final paycheck, including severance pay if applicable
5. Provide necessary documentation (e.g., certificate of service)
6. Inform relevant departments and team members

By following these guidelines, companies can navigate the termination and offboarding process in Jordan while maintaining compliance with local labor laws and fostering a positive employer brand.

Jordan welcomes foreign workers, but navigating the visa and work permit requirements can be complex. Here's a concise overview of what you need to know:

Work Visa and Permit Process

To work legally in Jordan, foreign nationals typically need both a work permit and a residency permit. The process usually involves these steps:

1. Job offer: Secure employment with a Jordanian company.
2. Work permit: Your employer applies for this on your behalf.
3. Entry visa: Apply at a Jordanian embassy or consulate in your home country.
4. Residency permit: Apply after arriving in Jordan.

Key Requirements

• Valid passport with at least six months validity
• Proof of employment or job offer
• Clean criminal record
• Health certificate
• Educational qualifications and professional certifications

Important Considerations

• Work permits are usually valid for one year and can be renewed
• Certain professions may have additional requirements or restrictions
• The process can take several weeks to complete
• Fees apply for both work permits and residency permits

Employer Obligations

Jordanian employers must:

• Prove they cannot find a qualified Jordanian citizen for the position
• Pay a fee for each foreign worker they employ
• Ensure the worker's skills match the job requirements

Exceptions and Special Cases

Some categories of workers may have different or simplified procedures:

• Investors
• Highly skilled professionals in certain sectors
• Employees of international organizations

Remember, regulations can change, so it's always best to check with the Jordanian Ministry of Labor or a reputable immigration lawyer for the most up-to-date information.