Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

December 2, 2019
2019-6498

Jordan amends social security law

Executive summary

Jordan published Law No. 24 of 2019 (the Law), amending the Social Security Law, in the Official Gazette on 1 October 2019. The amendments temporarily change the social security contributions for newly registered entities that meet specific conditions. In addition, employers are no longer required to remit social security contributions for female staff on maternity leave. Entities operating in Jordan should familiarize themselves with the amendments and the implications for their business.

Detailed discussion

Employers and their workers in Jordan are required to contribute to social security (at different proportions) for the following: (i) old age, disability, and death, (ii) work injuries, (iii) maternity, and (iv) unemployment.

Contributions for newly registered entities

The changes introduced by the Law amends the above structure for entities that are registered in Jordan after the effective date of the Law (1 October 2019) and have less than 25 workers. According to the changes made, if such an entity has workers that are under the age of 28, social security contributions for old age are not required to be made for up to five years of the entity’s registration date. This effectively reduces the applicable social security contribution rate for newly registered entities.

It is expected that regulations clarifying the implementation procedures and methods with respect to the above will be issued in due course.

Contributions during maternity leave

Employers are no longer required to remit the employee and the employer’s social security shares to the Social Security Corporation in Jordan when a female employee is on maternity leave.

Implications

Employers should review the amendments made to the Social Security Law to assess their impact on their social security compliance obligations.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Jordan, Amman
Ernst & Young LLP (United States), Middle East Tax Desk, New York

ATTACHMENT

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more