Qatar Global Payroll & Tax Information Guide

September 19, 2022 | 5 Mins Yana Todorova

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Payroll in Qatar – 2022 Updates

With the 2022 FIFA World Cup fast approaching there are some significant updates which benefit those who are doing business in the country. Some of them are:

    • The abolishment of the No Objection Certificate (NOC) – The amendment provides the opportunity for employees to change jobs before the end of their contracts and to move freely from company to company.
    • Minimum wage of QAR 1,000 (USD 275) per month for all employees.
    • The option of 100% foreign ownership of businesses in the State of Qatar
    • Extension of the number of areas where non-residents are allowed to purchase residential and non-residential properties on a freehold basis to twenty-five.
    • Ratification of the Singapore Convention on Mediation.
    • An amendment to the intellectual property law resulted in more protection of industrial designs.
    • Updates of the rules for dealing in the Qatar Stock Exchange (QSE).
    • New framework for the operation and regulation of the railways in Qatar.
    • New law for regulation of the private public partnerships.
    • Updates of the law defining charities to simplify operating processes, policies, and procedures

Qatar Payroll – Basic Facts

Arabic is the official language of Qatar; however, English is widely spoken in the country and is the main business language.

The currency in Qatar is the Qatari Riyal (QAR).

The fiscal year in Qatar is from 1st of April to 31st of March. The wages of the workers employed on annual or monthly wages should be paid at least once every month. The wages of all other workers should be paid once at least every two weeks. In Qatar, payroll is not subject to income tax.

Income Tax

Individuals in Qatar are not taxed on any of their personal income and are not obliged to file a tax return with Qatar’s Public Revenues and Taxes Department (PRTD).

Social Security Tax

There is no social security system in Qatar. Qatari nationals are provided with state help including sickness, medical care, maternity cover, childcare, pensions, unemployment benefits, etc.

Foreigners working in Qatar are eligible to receive medical assistance and other very limited social services. There are no state pension schemes in Qatar for foreign workers. Some international companies have corporate pension schemes.

Capital Gains Tax

Qatar-sourced capital gains derived by non-residents are subject to 10% income tax.

Corporate Tax

The corporate income tax rate is 10%. Foreign employers must file their tax return no later than 4 months after the end of the tax year.

There is a 35% tax rate that applies to entities dealing with oil and gas operations. No extensions will be given for filing a business tax return in Qatar.

Withholding Tax

A 5% withholding tax applies to all services in the State of Qatar. Withholding also applied to interest, royalties, technical fees, commissions, brokerage fees and other payments for services. Dividends are not subject to withholding.

Value Added Tax

The standard VAT rate in Qatar is 5%.

Qatar Wage Protection System (WPS)

The Wage Protection System (WPS) is an electronic salary transfer system developed by the Qatar Central Bank and the Ministry of Labour to ensure timely and full payment of wages through a database. WPS allows the Ministry of Administrative Development, labor and Social Affairs (MADLSA) to maintain a database that records wage payments in the private sector, and guarantees payments are made in full and on time.

Compensation and Benefits

Minimum Wage

There are 3 different rates for the minimum wage in Qatar for employees:

1) QAR 1,000 per month – if the employer provides a decent food and accommodation.
2) QAR 1,300 per month – if the employer provides a decent accommodation but does not provide food.
3) QAR 1,800 per month – if the employer does not provide food or accommodation.

Overtime

The overtime calculation in Qatar depends on the company, however, this is the basic overtime calculation formula in Qatar:

• Basic salary/26/8×OT hrs×1.25 = Overtime amount (on normal working days)
• Basic salary/26/8hrs×1.50 = Overtime amount (on Off day)
• Basic salary/26/8hrs×1.50 = Overtime amount (from 9 pm to 6 am)
• Basic salary/26/8hrs×1.50= Overtime amount + another day rest (on public holiday)

Hours of Work

The working week in Qatar is Sunday to Thursday from 9am to 6pm. Working hours can vary between 40 and 48 hours per week depending on the company’s policy. Friday is the Muslim rest day, which is the only official weekend day. Saturday is often a working day for the construction and service industries. During the month of Ramadan, the working day is reduced to 6 hours.

Holidays

Public holidays with full wage paid in Qatar are:

• Al-Fitr Eid (After Ramadan) - 3 days
• Al-Adha Eid (Pilgrimage period) - 3 days
• Independence Day - 1 day
• 3 working days to be specified by the employer

Leaves

• Annual leave – Workers with more than 1 year of service and less than 5 years, are entitle to an annual leave with pay for at least 3 weeks. Workers with more than 5 years of service, are entitle for at least 4 weeks paid annual leave.

• Sick days – For sick leave less than 2 week, the worker should be paid with the full wage. If the sick leave extends up to 4 weeks, the worker should be paid half of his wage. If the leave is furtherly extended, the worker would not be compensated any more.

• Leave for Muslim workers (Hajj leave) – A Muslim worker is entitled to not paid leave for 2 weeks to fulfill his pilgrimage duty.

• Maternity leave – Female employees are entitled to 50 days maternity leave if they have worked for the company for an entire year. Up to 15 days may be taken before the birth and at least 35 days must be taken after. Women are eligible to take additional time as unpaid or as annual leave.

Foreign workers in Qatar

Visa Requirements

After it was briefly suspended in 2020 due to COVID-19, Qatar’s visa-on-arrival service has resumed with some conditions. As of August 2022, citizens of over 95 countries are eligible for visa-free entry into the State of Qatar. Learn more here.

Taxes

Qatar is considered a tax-free country for expats. Non-residents may have to pay a 5% withholding tax if they’ve made money from services originating in Qatar. This rate is the same for individuals, self-employed workers, and companies.

 

For more information about how our Global Payroll Control Platform integrates with local payroll providers in State of Qatar, contact us today.

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