Payroll Compliance Updates -Jordan
A. Update

As a result of the Covid-19 pandemic, the Jordan Government has provided an option to employer to apply the reduced pension contributions rates for the months March to May 2020. Please find the below table which specifies the period of application of the relevant contribution rates:

Contributor's Category Up to February 29, 2020 March 01 - May 30, 2020 June 01, 2020 onwards
% % %
Employees 7.5 1 7.5
Employees 14.25 4.25 14.25

Please note that it is optional for companies to apply reduced rates on all or certain employees.

B. Statutory Compliance Release Date: March 19, 2020
C. Effective Date: March 01, 2020
A. Update

The Prime Minister, Jordan has recently issued Defense Order No. 14. The order is the protection scheme targeting private entities in the tourism and transport sectors and other entities designated as highly affected by the COVID-19 crisis (determined by the social security) who have been affected by the COVID-19. In order to avail the protection scheme, private entities need to apply to the social security corporation and obtain their approval.

The contribution to be made by the employer as per the applicable limit is 21.75% i.e. (7.5% as of the employee contribution and 14.25% as employer contribution).

As per the instructions issued in new Defense order, employer will not stop the applicable Social security deduction during the benefit of the defense order. However, a new program “Economic Empowerment 1“ has been issued in this regard, and accordingly the private entity may apply to the Social Security Corporation to reduce contributions rates to be as follows (Total contribution of 13.5%: 4.25% as of the employee share, 9.25% as of the employer share).

In addition to above, the scheme provides to allocate 50% (20% as employer share and 30% as social security office share) of ‘subject salary’ for their registered employee covered in the month of June 2020. The maximum and minimum contribution shall be 400 JOD and 220 JOD respectively.

B. Statutory Compliance Release Date: July 02, 2020
C. Effective Date: June 01, 2020 to December 31, 2020

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