Running payroll in Jordan is straightforward once you understand the structure, but the details matter. Income tax withholding, Social Security Corporation (SSC) contributions, end-of-service obligations, and the rules around the SSC salary ceiling all create real compliance obligations for foreign employers. Get them wrong and you face penalties, employee disputes, or both.
This guide covers everything you need to run legally compliant payroll in Jordan in 2026: tax brackets, contribution rates, leave rules, end-of-service calculations, and the options available to companies that do not yet have a registered entity in-country.
How payroll in jordan works
Jordan uses a monthly payroll cycle. Wages are typically paid around the 26th or 27th of each month and must be transferred directly to employees via bank account. Cash payments do not satisfy the legal requirement.
When an employee joins or leaves mid-month, you pro-rate their salary using a 30-day divisor regardless of the actual number of days in the month. All salaries must be denominated and paid in Jordanian Dinar (JOD).
The standard working week runs Sunday through Thursday, reflecting Jordan’s Friday-Saturday weekend. Maximum working hours are 8 per day and 48 per week. Overtime applies when those limits are exceeded.
Jordan labour laws affecting payroll
Jordan’s Labour Law governs the employment relationship and sets the rules that flow directly into payroll. Understanding the key provisions keeps your calculations correct and your contracts enforceable.
Employment contracts
Every employee must have a written contract. The contract must state the salary in JOD. A contract that denominates salary in a foreign currency does not meet the legal requirement, even if the value is equivalent.
Probation period
The maximum probation period is three months. During probation either party can terminate without notice, but it is good practice to state the probation period explicitly in the contract.
Notice periods
Both the employer and the employee are required to give a minimum of 30 days’ notice to end the employment relationship. An employer who wants to skip the notice period can pay one month’s salary in lieu. The obligation runs both ways: if an employee leaves without notice, the employer may deduct the equivalent from final settlement.
Working hours and overtime
Standard hours are 8 per day, 48 per week. When employees work beyond those limits, overtime rates apply:
- Daytime overtime: 125% of the regular hourly rate
- Work on the weekly rest day or on a public holiday: 150% of the regular hourly rate
Overtime pay must be included in the relevant payroll cycle. It is not permissible to bank overtime and pay it later.
Income tax withholding
Employers withhold income tax monthly and remit it to Jordan’s Income and Sales Tax Department. The employee does not file and pay separately for employment income. The obligation sits with the employer to get the withholding right throughout the year.
Personal exemptions
Before applying the tax brackets, each employee is entitled to deduct:
- JOD 9,000 per individual (the basic personal exemption)
- JOD 9,000 for dependents
- Maximum family exemption: JOD 23,000
These exemptions apply annually. For monthly withholding, divide the annual exempt amount by 12 to arrive at the monthly figure to deduct before calculating tax.
Tax brackets
The following rates apply to net taxable income after exemptions:
| Taxable Income (JOD/year) | Rate |
|---|---|
| Up to 5,000 | 5% |
| 5,001 – 10,000 | 10% |
| 10,001 – 15,000 | 15% |
| 15,001 – 20,000 | 20% |
| 20,001 – 1,000,000 | 25% |
| Above 1,000,000 | 30% |
National contribution
A 1% national contribution applies to total taxable income above JOD 200,000 per year. This is charged in addition to the applicable income tax bracket rate. For most employees on typical employment salaries, this threshold will not be relevant, but it applies to high-earning individuals and must be withheld correctly where it does.
Ssc contributions
The Social Security Corporation provides pension, work injury, and other social protections. Both employer and employee contribute monthly, and registration happens at the point of hire.
Contribution rates
- Employer contribution: 14.25% of gross salary (an additional 1% applies for roles classified as high-risk under SSC regulations)
- Employee contribution: 7.5% of gross salary
Salary ceiling
SSC contributions in 2026 are calculated only on gross salary up to JOD 3,349 per month. Salary above this ceiling is not subject to SSC contributions. This ceiling is reviewed periodically by the SSC.
For an employee earning JOD 4,000 per month, for example, both employer and employee contributions are calculated on JOD 3,349, not on JOD 4,000.
Registration
Employees must be registered with the SSC at the point of hire. Late registration creates a compliance exposure that can result in back contributions plus penalties. Foreign employers without a local entity cannot register employees directly with the SSC, which is one of the core operational reasons many companies use an Employer of Record (EOR) when entering the Jordan market.
Salary structure and minimum wage
Jordan’s minimum wage is JOD 290 per month. This rate took effect on January 1, 2025 and runs through December 31, 2027. No employee may be paid below this amount regardless of role, seniority, or the terms of any private agreement.
Gross salary is the figure used as the base for SSC contributions and for income tax calculations before exemptions. Benefits that form part of remuneration may also factor into gross salary depending on how they are structured in the contract, so it is worth being precise about what is and is not included in gross when drafting offer letters.
Gross-to-net calculation
A worked example helps show how the components interact in practice.
Example: jordanian national earning jod 1,500/month
Gross salary: JOD 1,500
SSC deductions (employee share, 7.5%): JOD 1,500 × 7.5% = JOD 112.50
Annualised salary for income tax: JOD 1,500 × 12 = JOD 18,000 Less personal exemption: JOD 18,000 − JOD 9,000 = JOD 9,000 taxable annually
Annual income tax:
- First JOD 5,000 at 5% = JOD 250
- Next JOD 4,000 at 10% = JOD 400
- Total annual tax = JOD 650
- Monthly tax withholding = JOD 650 ÷ 12 = JOD 54.17
Monthly net pay: JOD 1,500 − JOD 112.50 (SSC) − JOD 54.17 (tax) = JOD 1,333.33
Employer cost: JOD 1,500 + (JOD 1,500 × 14.25%) = JOD 1,500 + JOD 213.75 = JOD 1,713.75
Note on expatriate employees
Expatriates working in Jordan are subject to the same income tax withholding rules as Jordanian nationals. However, SSC registration and contribution obligations for foreign nationals depend on whether Jordan has a reciprocal social security agreement with the employee’s home country. Where no agreement exists, the standard SSC rates apply. Confirm the employee’s nationality and check for applicable bilateral agreements before processing the first payroll run.
Leave entitlements and payroll impact
Leave obligations in Jordan carry direct payroll consequences. They affect how you calculate monthly payroll, accruals, and final settlements.
Annual leave
Employees are entitled to 14 working days of paid annual leave per year during the first five years of service. After five years, this increases to 21 working days per year. Leave is paid at the employee’s full salary rate.
Unused annual leave must be paid out on termination. This is a fixed legal obligation and cannot be contracted away.
Sick leave
Employees are entitled to 14 paid sick days per year with a valid medical certificate. An additional 14 days at full pay applies for hospitalisation. The medical certificate requirement is the employer’s right to enforce. Failing to require one creates administrative complications if disputes arise later.
Maternity leave
Maternity leave is 90 calendar days, fully paid by the employer. At least six weeks of this must be taken after the birth. The full cost sits with the employer and is not currently offset by SSC reimbursement in the standard arrangement.
Paternity leave
Fathers are entitled to three paid days of paternity leave.
Public holidays
Jordan observes between 8 and 10 public holidays per year. Employees receive full pay on public holidays. Where an employee works on a public holiday, they are entitled to additional compensation at the 150% overtime rate.
End-of-service benefits
End-of-service calculations in Jordan depend on whether the employee is enrolled in the SSC pension system. Getting this right matters because it affects how much you owe at termination and whether additional gratuity applies.
Employees not covered by ssc pension
For employees not enrolled in or not covered by the SSC pension scheme, the employer owes a gratuity of one month’s salary for each year of service. Partial years are pro-rated.
Ssc-enrolled employees
For employees who have contributed to the SSC throughout their employment, the SSC pension or lump sum generally replaces the employer-paid gratuity. The lump sum formula depends on the total number of months of contributions:
- Up to 120 months of contributions: 10% of total contribution base
- 120 to 216 months: 12% of total contribution base
- Over 216 months: 15% of total contribution base
The ssc ceiling issue
Here is a point that frequently creates disputes. SSC contributions are only calculated on salary up to the JOD 3,349 monthly ceiling. For an employee earning above that ceiling, a portion of their salary was never subject to SSC contributions. Jordanian court precedents have held that the employer may still owe gratuity on the salary above the ceiling, because that portion effectively has no SSC coverage.
If you are employing staff at salaries above JOD 3,349 per month, take specific legal advice on how to structure end-of-service obligations for that portion of salary. Assuming SSC enrollment fully removes the gratuity obligation creates a contingent liability.
Final settlement
Regardless of the reason for termination, the final settlement must include:
- Outstanding salary for the period worked
- Payment for accrued, unused annual leave
- Any gratuity owed under the applicable calculation
Final settlement must be paid promptly. Delays can result in labour complaints and penalty obligations.
Payroll options for foreign employers
Foreign companies have two main routes for employing staff in Jordan: establish a legal entity and run payroll directly, or use an Employer of Record to employ staff on your behalf.
| Local entity | Employer of Record | |
|---|---|---|
| Setup time | 3–6 months+ | Days to weeks |
| Cost to establish | High (legal, registration, ongoing compliance) | No setup cost |
| SSC registration | Employer registers directly | Handled by EOR |
| Payroll compliance | Employer’s responsibility | Handled by EOR |
| Employment contracts | Drafted and managed in-house | Provided by EOR |
| End-of-service liability | Employer carries it | Shared with EOR |
| Best for | Large, committed headcount | 1–20 employees; market testing |
An EOR services provider becomes the legal employer of your Jordan-based staff. Your team members work for you day-to-day, but the EOR handles payroll processing, SSC contributions, income tax withholding, and compliance with Jordanian labour law. This is the fastest and most cost-effective way for a foreign company to hire legally in Jordan without opening a local entity.
For independent project work, engaging contractors is another option. Contractors are not subject to the same payroll obligations as employees, but misclassification risk is real. Jordan’s labour authorities look at the substance of the working relationship, not just the contract label. If a contractor works exclusively for you, follows your instructions, and works set hours, there is a meaningful risk they will be reclassified as an employee.
Common jordan payroll mistakes to avoid
Even well-resourced HR teams make errors when running payroll in an unfamiliar market. These are the ones that appear most frequently in Jordan.
Denominating contracts in foreign currency. The contract must state salary in JOD. A USD salary with a conversion note is not compliant. Reissue contracts if this is how your current agreements are structured.
Ignoring the SSC salary ceiling when calculating end-of-service. Many employers assume that SSC enrollment fully replaces gratuity. It does not, if the employee earns above JOD 3,349. Build the ceiling issue into your liability model from day one.
Paying cash. Bank transfer is the legal requirement. Cash payroll creates a compliance exposure and makes it difficult to demonstrate timely payment if a dispute arises.
Missing SSC registration at hire. Registration must happen at the point of hire, not at the end of the probation period. Late registration creates back-contribution liability.
Overlooking unused leave at termination. Unused annual leave must be paid out. It is not discretionary. Missing it in the final settlement calculation is one of the most common sources of labour complaints.
Applying the wrong overtime rate. Daytime overtime is 125%. Work on the weekly rest day or a public holiday is 150%. Applying the lower rate across the board will result in underpayment claims.
Using the wrong pro-ration divisor. Jordan uses a 30-day divisor for all months. Using the actual number of days in the month (28, 29, 31) will produce incorrect results in most months.
Simplify jordan payroll with RemotePass
Managing Jordan payroll from outside the country is time-consuming, and the cost of errors compounds quickly. RemotePass handles payroll processing, SSC registration and contributions, income tax withholding, employment contracts, and end-of-service calculations for employers hiring in Jordan, without requiring you to open a local entity.
Book a RemotePass demo to see how it works.
FAQs
What is the minimum wage in Jordan in 2026? JOD 290 per month. This rate is fixed through December 31, 2027.
When must Jordan payroll be paid each month? Wages are typically paid around the 26th or 27th of each month. Payment must be made by bank transfer.
What are the SSC contribution rates in Jordan? The employer contributes 14.25% of gross salary (plus 1% for high-risk roles). The employee contributes 7.5%. Contributions are calculated only on gross salary up to the JOD 3,349 monthly ceiling.
Does enrolling employees in SSC eliminate the end-of-service gratuity obligation? For most SSC-enrolled employees, the SSC lump sum or pension replaces the employer gratuity. However, where an employee’s salary exceeds the JOD 3,349 SSC ceiling, Jordanian courts have found that gratuity may still be owed on the portion of salary above that ceiling.
Can a foreign company hire in Jordan without a local entity? Yes. Using an Employer of Record is the standard approach for foreign companies that want to hire in Jordan without registering a legal entity. The EOR becomes the legal employer and handles all local payroll and compliance obligations.
What is the income tax rate in Jordan? Jordan uses a progressive system. Rates range from 5% on the first JOD 5,000 of net taxable income (after exemptions) up to 30% on income above JOD 1,000,000. Most employees at typical salary levels fall into the 5%–25% range.
How many days of annual leave do employees get in Jordan? 14 working days per year for the first five years of service, increasing to 21 working days per year after five years.
What is the working week in Jordan? The standard working week is Sunday through Thursday, with Friday and Saturday as the weekend. Maximum hours are 8 per day and 48 per week.
