Introduction to Payroll in Qatar

Qatar has a thriving economy, especially in part due to its gas and oil sector. The local workers are talented, and expatriates are intrigued by the idea of no income tax. So, you have a new team member living in Qatar.

Now that you have hired them, how do you go about setting up payroll in Qatar? It can be tricky. You will have to take note of Qatar’s unique labor laws, like employee contracts needing to be in both English and Arabic.

Don’t worry though. Skuad is here to help your company expand to new horizons.

Payroll Process in Qatar

Your payroll team is already busy with the payroll in your own country. Now, throw in employees from all over the world. Each country has specific regulations to follow.

You can streamline this process by standardizing some aspects. The entire process can be split into three phases:

Pre-Payroll Phase

This first stage is where the bulk of the work lies.

Setting up the Organization

The first thing to do is set up your organization in Qatar. Consider your business philosophy and desired work culture. With these in mind, you can set clear policies that will standardize the payroll process. Some of these policies are

• Business Profile. To register a subsidiary in Qatar, there are explicit steps to follow. You must register it with the Ministry of Economics and Commerce. You will have to submit a Memorandum of Association and The Articles of Association. Also, there is a minimum share capital of 10 million Qatari Riyal (QAR).
• Work Location.  You will also need to establish a work location in Qatar. Remember to check the specific region’s laws as well. Each region may have its own regulations.
• Leave Policy. We have all been sick or wanted to go on vacation. Having a standard leave policy that encompasses the cultural differences of your team can streamline the process of calculating payroll.
• Attendance Policy. It is not only important to know when your employees take off but also when they are working. Decide on your employees’ scheduled hours and how you would like them to log their time. Biometric attendance devices can be a beneficial way to calculate attendance across the globe.
• Statutory Components. Qatar has statutory components laid out in its labor laws. These components include employee benefits, minimum wage, and other employee rights. Review these laws to ensure compliance.
• Salary Components. It is important to consider each country's standards when designing salary components. Decide wages, deductions, benefits, allowances, and schedule with each of your employees’ culture in mind.
• Pay Schedule. After you calculate payroll, it will be time to pay your team. So, how often should you pay them? It could be good to consider the standard in your employees’ countries. For example, it is standard for employees to be paid monthly in Qatar.
• Employee Information. Last but not least, you will have to collect employee information. Some important information would be their job title, work designation, and identification. These are necessary for payroll and government records.

Payroll Calculation Phase

This is when your payroll team will gather the policies and information from the pre-payroll phase. Once gathered, it is time to calculate your employees’ pay.

This process varies depending on your payroll team’s calculation method. The least time-consuming approach is to use payroll software that does the calculations itself. Your team enters the withholdings, deductions, and taxes, and the system would automatically factor them in.

Post-Payroll Phase

You are nearly finished. You just have a few more steps to go:

• Salary payments. It is the time all your employees have been waiting for—payday. To pay them, you can either notify the bank with a calculation report or use payroll software that has direct deposit built in.
• Payroll accounting. After you finish, keep a detailed record of your team’s payments for tax, budget, and liability purposes.
• Payroll reporting and compliance. As always, be sure to remain compliant by distributing the payroll deductions as required.

Book a demo with Skuad if you have any questions about the Qatari payroll process.

Payroll Processing in Qatar

Reading about the payroll process in Qatar is one thing, but putting it into action is another. Here’s the good news: Skuad can help you every step of the way.

Payroll Processing Company in Qatar

Payroll processing companies like Skuad can assist you with the payroll process in Qatar. We can set up your payroll so that you can focus on your company’s success.

Contact Skuad to see how we may benefit your company.

Payroll Management in Qatar

Not to be confused with payroll processing companies, payroll management services offer another option. These services manage your payroll records and ensure compliance with local Qatari labor laws. Payroll management will record your employees’ gross and net salaries, incentives, and payslips for a specified amount of time.

Payroll Compliance in Qatar

We have mentioned payroll compliance a few times now, but what is it? Compliance means that you must meet Qatar’s statutory requirements according to the labor laws. Some of these requirements include employee rights, employee benefits, and taxes.

Payroll Components in Qatar

You will need to consider several payroll components to stay compliant in Qatar. Some of those components are

Compensation

The minimum wage in Qatari rial (QAR) is QAR 1,000 per month. In U.S. dollars (USD) this is about USD 275. Employees should also receive a food allowance of QAR 300 (USD 83) and a housing allowance of QAR 500 (USD 137). Alternatively, you can offer equivalent food and housing.

Working hours

For full-time employees, the standard workweek is 48 hours. Employees may work six days each week and eight hours each day. However, during the month of Ramadan, this time is shortened to six hours per day and 36 hours per week. Usually, Friday is the rest day.

Overtime laws

If your employee works over 48 hours a week, you must pay them overtime at a rate of 125% of their regular wage. There is also an increased overtime rate if they work after 9 pm and are not contractually scheduled on night shifts. This night overtime rate is 150%.

Social security

One of the great things about Qatar is its fantastic universal benefits for its citizens. These include public healthcare, childcare, unemployment, and disability. Unfortunately, expatriates only have access to medical facilities.

In addition, with Qatar’s new Social Insurance Law, Law No. 1 of 2022, all Qatari employees who have worked at least 15 years at a company will have access to a pension.

Sick leave

Everyone gets under the weather sometimes. To help them out and to keep the sickness from spreading, employees who have worked at least three months receive sick leave:

• 100% paid for the first two weeks
• 50% paid for the next four weeks
• Unpaid leave after the first six weeks

Parental leave

When an employee is pregnant, she is entitled to maternity leave if she has worked for over a year. She will receive 50 paid days of leave, 35 of which will be after the birth. If the birth had complications, she can have an additional 60 days of unpaid leave. Once she returns to work, she will get one-hour nursing breaks every day for a year.

Although there is no legal requirement for paternity or parental leave, it is standard for Qatari fathers to receive five days off when they have a new child.

Public holidays

When it comes to Qatar, there are eleven paid holidays. Eight of these days are set:

• National Sports Day
• Eid al-Fitr (three days)
• Eid al-Adha (three days)
• Qatar National Day

Then, there are three more days each year that are not established. Employers get to decide the dates for these.

Payroll taxes

Qatar is unique in that it does not have any income tax that must be paid by employees. However, there is still a corporate tax that companies must pay. This rate is usually about 10%, but it can go as high as 35% if your company is in the oil or gas industry.

Other laws

Here are a few more Qatari labor laws to consider:

• Medical insurance. Employers must provide medical insurance for their employees.
• Paid time off. Employees receive a certain amount of leave depending on how long they have been with the company:
  1. Less than one year: A percentage determined by the employer
  2. One to four years: Three weeks
  3. Five or more years: Four weeks

• Hajj Leave. Muslim employees can take a one-time leave of 20 days for a pilgrimage to Mecca.
• Gratuity policy. When an employee leaves, they receive three weeks' salary for each year they were employed.

See more information about hiring in Qatar.

Conclusion

Payroll in Qatar can be complicated. You will need to consider statutory labor laws, company policies, and a subsidiary in Qatar. You could set up your own subsidiary to establish payroll, but this is a large expense and can take time.

Instead, Skuad can assist you with the payroll process in Qatar. We have a team of experts that will keep you compliant. Contact Skuad to receive global payroll help.