Qatar Payroll Process: An Overview

Joharan Nachia Mohamed Eusuf

3 January, 2021

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    Processing Payroll requires time, dedication, and subject knowledge; even a misconception can cause great loss. Ensuring all the employees within an organization get paid the correct amount at the right time with deductions/ allowances if any is mandatory. Here we have covered a set of frequently asked questions that pertain to payroll processing in Qatar.

    1. What is the frequency of making salary payments to employees in Qatar?

      The law in Article 66 states that the wages of the workers employed on annual or monthly wages shall be paid at least once in every month. The wages of all other workers shall be paid once at least every two weeks.

    2. What are the statutory pay components included in employee salary?

      The Qatar labor law does not define the components that should make up an employee’s salary; there are no defined statutory components.

    3. Which are the common pay components that are normally payable to employees?

      Fixed components may include Basic salary, House rent allowance, transport allowance and other allowances. The variable components may include Overtime, Sales commission, Bonus, Incentives, Relocation allowances, Mobile allowances etc.

    4. What is the minimum salary payable in Qatar?

      Law No. 17 sets the minimum wage at QAR 1,000 per month for all workers. Companies should also provide food and accommodation to its workers or an allowance of QAR 500 per month for accommodation and QAR 300 per month for food

    5. What is the maximum number of working hours in Qatar?

      The number of maximum working hours is eight hours a day and forty-four hours a week. During the month of Ramadan, it is six hours per day and thirty-six hours per week. Please refer to our article on Qatar wages.

    6. How is overtime calculated?

      Overtime is any extra hours worked by an employee beyond the normal working hours. Article 74 states that the employee shall be entitled to an additional pay equal to his normal wage plus an extra of at least 25% for extra hours beyond normal working hours. In case, if the overtime falls between 9 p.m. to 4 a.m. on a working day, the employee will be entitled to his normal wages plus an extra 50% thereof. According to Article 75, if an employee works on a designated rest day, he is entitled to normal wages plus an increase of not less than 150%. Overtime hours cannot exceed a maximum of two hours a day.

    7. How is Qatar gratuity accrued?

      Qatar gratuity is accrued against the last drawn basic salary and calculated at twenty-one days’ pay for every year of the service if the service period exceeds one year.

    8. When is gratuity paid to an employee?

      According to Article 54 of the Qatar labor law, the employee who has completed one year or more in the continuous service, is entitled to the end of service remuneration at the end of his service. For a comprehensive understanding of Qatar gratuity accrual and settlement, please refer to our article on QATAR gratuity policy and settlement.

    9. What are the statutory deductions that are made to employees in the Qatar?

      In the Qatar, payroll is not subject to income tax, and hence there are no mandated tax deductions.

    10. What is Qatar WPS?

      Qatar Wage Protection System (WPS) is an electronic salary transfer system that allows institutions and organizations in the private sector to pay their employees via banks, exchange bureaus and financial institutions approved by the Qatar Central Bank. 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.

    11. What is the leave policy defined under the labor law?
      A. Annual Leave

      A worker who has completed one continuous year in the service of the employer shall be entitled to an annual leave with the pay provided. This leave shall not be less than three weeks for the worker whose service is less than five years and four weeks for the worker whose service is more than five years.

      B. Sick leave
      According to Article 82, a worker who has fulfilled first three months of his/her contract is eligible for Sick leaves and will be granted 12 weeks in the following rate:

      1. The first 2 weeks: with full pay
      2. The next 4 weeks with half pay
      3. Next 6 weeks: Without pay

      As mentioned in Article ,82 the sick leave will be granted for an employee only after completing three months of service with the company.

      C. Maternity leave
      A female worker shall be entitled to maternity leave with full pay for a period of fifty days, including both pre-and post-natal periods provided that the continuous period of service with the employer exceeds one year. The period after delivery should not be less than thirty-five days. If the period after delivery is less than thirty-five days, the employee can be granted a complementary leave from her annual leave. If there are no annual leaves available, the employee can be granted leave without pay.

      D. Hajj Leave
      Hajj leave is taken by Muslims to go perform pilgrimage. Article 83 states that ‘Each worker shall be entitled, once in the course of entire service, to special leave without pay for performing pilgrimage’. Hajj leaves shall not exceed two weeks and is granted once in the entire employment tenure.
      Please read our article on QATAR leave policy here for a comprehensive understanding.

    12. Which are the national holidays in Qatar?

      According to Article 78, the official paid national holidays are as follows.

      • Three days for Eid El Fitr
      • Three days for Eid Al Adha
      • One day for Independence Day
      • National Sports day.
    13. Is employee Medical Insurance mandatory in Qatar?

      It is mandatory that an employer provide medical insurance to the employee during the duration of employment. Some companies are extending this coverage to employee’s dependents even though this is not mandatory.

    14. Which are the currencies that can be used in making salary payments in Qatar?

      The only accepted currency used in making salary payments is the country’s national currency which is the Qatari riyal.

    15. Is bonus or incentives payment mandatory in Qatar?

      Bonus and incentives payments are not mandatory in Qatar. Many companies in the Qatar have bonus or incentive schemes implemented to keep employee motivation and the structures vary from one company to the other based on their policy.

    16. What are the items included in End of Service Benefits calculation in Qatar?

      The employee is entitled to the following end of service benefits.

      1. Gratuity
      2. Repatriation ticket if applicable
      3. Notice period pay if applicable
      4. Any unutilized leave (Vacation) pay
      5. Any other outstanding payment or deduction
    17. Summary of Employee Benefits in Qatar:
      1. Salary
      2. Gratuity
      3. Annual Leave
      4. Sick leave
      5. Maternity Leave
      6. Medical Insurance
      7. Overtime pay if applicable.

    Business owners may not have the time for payroll calculation as they have numerous other things to take care of. Outsourcing payroll functions will not only free up the time of the owner but will also promise professional service.

    Payroll Process in Qatar

    The process of payroll is little complicated and time-consuming; hence it is always recommended to outsource your company’s payroll function. Outsourcing payroll will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business.

    One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security.

    As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our clients’ entire payroll cycle that includes preparation of payroll reports, processing salary payment with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward.

    To know more about our payroll process, click here

    Disclaimer:

    Whilst every effort has been made to ensure the accuracy of this information, HLB HAMT will not accept any liability arising out of errors or omissions. Please note that this blog is not all-inclusive. Our guidance is designed only to give general information on the issues/topics covered. It is subjected to change and not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.
     


     
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