Old-age, disability, and death insurance under Jordan's Social Security Law is funded by monthly contributions the establishment pays at 11% of insured workers' wages, contributions the establishment deducts at 6.5% of the same wages, and contributions of voluntarily affiliated insured persons at 17.5% of the wage subject to deduction.
Funding sources for old-age, disability, and death insurance
The Social Security Law provides that the funding sources for this insurance include monthly contributions the establishment pays at 11% of insured workers' wages, monthly contributions the establishment deducts at 6.5% of insured workers' wages, monthly contributions paid by voluntarily affiliated insured persons at 17.5% of the wage subject to deduction, in addition to interest and fines arising from non-compliance with this insurance's provisions and the yield from investing these funds. Private-sector establishments may reduce the contribution rate due for Jordanian insured persons under thirty years of age who were not previously covered by the law, provided the reduction does not exceed 50% of this insurance's contribution.
Conditions for old-age pension entitlement
An insured person is entitled to an old-age pension provided a male insured person completes sixty years of age and a female insured person completes fifty-five years of age, and that the person's contributions to this insurance total at least 180 contributions, of which 84 are actual contributions. The pension is calculated for each year of contribution at 2.5% of the first one thousand five hundred dinars of average monthly wage, and at 2% of the remainder of that average exceeding that amount.
Illustrative example
- Suppose an insured person's monthly wage is 800 dinars; the establishment's contribution for them at 11% equals 88 dinars per month, and the amount deducted from their wage at 6.5% equals 52 dinars per month. These are hypothetical figures for illustration only.
Fines for failing to cover workers under social security
Anyone who, in bad faith, provides false information to obtain, for themselves or others, a salary or compensation without entitlement, or to evade fulfilling any right due to the Corporation, is punished with a fine of not less than one thousand dinars and not more than two thousand dinars. Every establishment covered by this law is punished with a fine of five hundred dinars for each worker it fails to cover under this law, and anyone who violates any other provision of this law is punished with a fine of five hundred dinars.
Inspection and oversight powers
The Director General of the Social Security Corporation, or any of its employees authorized in writing by the Director General, has the right to enter establishments and any workplaces affiliated with them during working hours and to examine the records, ledgers, and electronic data showing the number of workers and their wages; in this capacity, the Director General and the Corporation's employees may hear statements from employers and workers and draw up a record of the facts that cannot be challenged except for forgery.
Legal References
- Social Security Law No. 1 of 2014 — Article 59 (funding sources for old-age, disability, and death insurance)
- Social Security Law No. 1 of 2014 — Article 62 (conditions for old-age pension entitlement and its calculation)
- Social Security Law No. 1 of 2014 — Article 98 (entry and inspection powers)
- Social Security Law No. 1 of 2014 — Article 100 (fines for violations)
For questions about your specific situation, you can ask the Jordan Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.