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Hire Contractors in Jordan

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Employ contractors and employees in 160+ countries

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Employ contractors and employees in 160+ countries

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Jordan boasts a workforce known for its skill, dedication, and adaptability, making it a prime destination for businesses seeking talented professionals.

The Jordanian government has also prioritized education and created adult education centers nationwide. This has resulted in a drop in the illiteracy rate and saturated the skilled employees market. 

In recent years, hiring contractors in Jordan has emerged as a strategic move for companies to improve efficiency and flexibility. 

Hiring contractors allows businesses to access specialized skills for projects without a long-term commitment. This reduces overhead costs and helps companies scale their workforce per market demands.

If you also want to tap into the hiring market in Jordan and are not sure about the process, we are here to help. This guide will equip you with the knowledge and resources needed to hire contractors in Jordan. 

It focuses on agent-of-record (AOR) solutions to ensure a successful and compliant experience.

How to Hire Contractors in Jordan

There are some specific steps you should take to ensure a smooth and compliant process for hiring contractors in Jordan:

  1. Define your needs:
    • Identify the skills and experience required for your project.
    • Determine the project duration and budget.
  1. Understand contractor classification:
    • Jordanian law distinguishes between employees and contractors. 
    • Misclassifying a worker can lead to fines and penalties. It's crucial to understand the legal definition to avoid issues.
  1. Find qualified contractors:
    • Leverage online job boards, professional associations, or recruitment agencies specializing in Jordan.
    • Review resumes and portfolios to assess qualifications and experience.
    • Conduct interviews to discuss the project requirements, timelines, and expectations.
  1. Negotiate contract terms:
    • Clearly outline the scope of work, deliverables, payment schedule, and communication channels.
    • Specify the independent contractor nature of the relationship.
    • Address intellectual property ownership and confidentiality.
  1. Ensure compliance:
    • Verify the contractor's legal status and work permits (if applicable).
    • Register the contractor with the Jordanian Contractors Association for added benefits if necessary.
    • Understand and comply with tax and social security requirements for contractor payments. Consider outsourcing payroll to a Jordanian contractor management service provider for expertise.

Instead of hiring the country of Jordan independent contractors directly, use Skuad AOR to hire contractors.

Hiring contractors through Skuad AOR

Skuad’s Agent of Record (AOR) offers a potential solution for companies looking to hire contractors in Jordan without even setting up a legal entity locally and helps

  • To ensure correct worker classification to avoid legal issues
  • To handle payroll processing for contractors and compliance with Jordanian tax and social security regulations
  • To draft contracts that clearly outline the independent contractor relationship and protect your company's interests

How to pay contractors in Jordan

Contractor payments in Jordan involve the generation of pay stubs, contractor invoices, or independent contractor payment receipts. The contractor records details about a payment received for their services.

Keeping in mind the flexible payroll compliance, employers can choose from the below payment methods for contractors in Jordan:

Method Advantages Disadvantages Considerations for Choosing
Bank Transfer Secure, traceable record Slow (international transfers) Large payments, security
Payment Gateway Convenient online options Transaction fees, currency limitations Smaller, frequent payments
Cash Fastest, simplest Unsecured, no paper trail, limited by physical location For small payments, informality is acceptable
Payroll Services via Skuad AOR Compliant, streamlined process, reduces workload
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Complexities of contractor payroll, compliance concerns, minimizing administrative burden during global expansion
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Challenges of Hiring Contractors in Jordan

Onboarding contractors is often more cost-effective than hiring employees, but some hurdles must be considered. Here are a few challenges to hiring contractors in Jordan:

1) Independent contractor laws in Jordan

  • While the local law clearly distinguishes employees and contractors in Jordan, misclassifying a worker can lead to fines and penalties for your company. You can refer to this independent contractor checklist to classify a worker correctly.
  • Moreover, well-drafted negotiations before hiring contractors can protect both parties from misunderstandings and disputes.
  • News of unfair contract practices in the construction sector can spread, making it harder to attract qualified contractors in Jordan, workers & engineers who want fair treatment and unambiguous terms.

2) Restricted occupations for non-Jordanian contractors

  • Some professions are restricted to Jordanian citizens only. This can be a limiting factor to hire contractors in Jordan in occupations like
    • Hair salons
    • Upholstery and furniture renovation workshops
    • Carpentry
    • Blacksmithing
    • Aluminum fabrication and metal processing
    • Embroidery and traditional clothing workshops
    • Goldsmithing and jewelry-making workshops
    • Ceramic and pottery production
    • Laundry and dry cleaning
    • Producing and bottling fresh water for direct sale
    • Roasting and packing nuts for direct sal
  • The availability of skilled contractors can vary depending on the specific trade you need.
  • Additionally, proficiency in Arabic can be another limiting factor for contractor management in the country. 

3) Payroll for contractors in Jordan

  • There is no imposition on employer deduction from the Jordan government for income tax on independent contractors’ payments. 
  • However, contractors in Jordan have their income tax obligations. It could result in extra paperwork for employers. 
  • Additionally, traditional payroll systems fail to handle the unique requirements of contractor payments, as different payment structures lead to multiple tax implications. 
  • It indirectly increases the importance of correctly formatted invoices and record-keeping, complicating contractor management in Jordan. 
  • Moreover, when engaging with 1099 US contractors in Jordan, you must support them with the necessary documents so they can report annual income exceeding $600 to the IRS in the US. 

Fortunately, there are expert AOR solution providers and contractor management software like Skuad to help you hire workers from the Hashemite Kingdom country of Jordan as independent contractors in a compliant manner.

Hiring Contractors Directly vs Hiring Contractors via Skuad

The table summarizes the differences between hiring contractors directly and through contractor management solutions like Skuad. Most evidently, hiring contractors via Skuad saves employers from contractor misclassification risks. 

Feature Direct Hiring Skuad AOR
Compliance risk High Low
Payroll complexity High Low
Administrative burden High Low
Cost Potentially lower upfront cost but higher long-term cost Affordable platform usage fees, facilitate processes in the long run
Speed Potentially faster (no onboarding process) Speedier processing (streamlined workflow)
Control More control Less direct control
Access to the talent pool Limited (your network) Wide network
Expertise It relies on your internal knowledge Access to Skuad's expertise

Cost of Hiring Contractors in Jordan

The cost of hiring contractors varies depending on the job post and your budget. The below tables summarize the best practices followed:

Cost component Estimated range
Benefits & taxes Here’s the cost of hiring employees in Jordan:
  • Minimum wage: JOD 260 per month
  • Tax obligations: Progressive income tax ranges from 5% to 30%
  • Employer cost: 16.25% on an annual salary of USD 60,000.

By hiring contractors, you can avoid all the above payroll costs in Jordan.
Software & tools
  • Skuad’s contractor management software for onboarding, payroll & compliance
  • Internal communication tool costs

How to Convert a Contractor into an Employee in Jordan

Converting a contractor into an employee in Jordan follows roughly the steps involved in switching 1099 Contractors to W2 employees. Here's a breakdown of the process:

  1. Evaluate the need and legality
    • Analyze the original agreement between you and the contractor. Was it a genuine independent contractor agreement, or were there elements that might suggest an employer-employee relationship?
    • Consider the advantages of employing the contractor, such as increased control over work, access to employee benefits, and potentially improved loyalty.
  1. Prepare employment contract
    • Have a transparent conversation with the contractor about your intentions and the potential benefits of becoming an employee. 
    • Be prepared to address any concerns they might have, such as changes in income structure or work schedule.
    • The new contract should clearly outline the terms of employment, including salary, benefits, working hours, vacation days, and termination clauses. 
  1. Payroll management
    • You'll need to withhold income tax and social security contributions from the employee's salary and pay them to the appropriate Jordanian authorities.
    • Set up a system to manage payroll for your new employee, ensuring timely and accurate payments. 
    • As an employer, you'll be responsible for registering the new employee with Jordan's Social Security Institution.

Hire Contractors in Jordan with Skuad

Skuad provides seamless and compliant access to the global workforce through its AOR services. Hiring contractors in Jordan through Skuad is beneficial as it ensures compliance with local regulations and streamlines administrative tasks. 

You can hire, pay, and manage contracts without setting up a local entity. 

Whether a small startup or a large multinational corporation, Skuad can be your ideal partner for a successful and compliant contractor management experience in Jordan and over 160 other countries.

Book a free demo to boost your global expansion. 

FAQs

1) Can I hire an independent contractor overseas?

Yes, you can hire independent contractors overseas while operating in Jordan. However, restrictions should be considered when employing non-Jordanians in certain professions, such as partnering with AOR service providers to handle the legal complexities and streamline payroll. 

2) Do I need to file a 1099 for a foreign contractor?

It is unlikely that foreign contractors in Jordan who are not US citizens and have never worked in the US will file a 1099 tax form. You can use contractor management software to manage payroll for your independent contractors in Jordan. 

3) Is it cheaper to hire employees or independent contractors?

Hiring independent contractors offers companies greater flexibility in benefits administration and payroll compliance, so the initial cost might be lower for them. On the other hand, hiring employees comes with higher upfront costs for salary and benefits but offers more control and eliminates the risk of misclassification issues.

4) How does Skuad help hire and pay independent contractors in Jordan?

Skuad simplifies hiring and paying independent contractors in Jordan, all without setting up a local legal entity. Its Agent of Record (AOR) services involve payroll processing, tax withholding, and contractor payments, freeing you to focus on finding the best talent and managing your project. 

5) What are the labor laws in Jordan?

Jordan's labor law sets a minimum standard for working hours (a maximum of 40 hours/week), rest periods, minimum wage (JOD 260 per month), and social security contributions. It also outlines clear rules for employee rights and termination procedures within a month of the notice period.

Skuad is the best solution to hire and expand globally.

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