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ISSUE 1
“The range of contributions across Middle East countries varies from 0 to 26%.” cases. While in Oman, the Annual leave, sick leave, and maternity leave period has been increased overall. UAE is also making significant changes in the End of service benefit. While the Social Insurance Organization (SIO) has introduced end-of-service gratuity for non-Bahrainis working in Bahrain. One of the other important areas, where different countries are bringing up significant changes are statutory leaves. In the updated regulations, UAE increased the maternity leave by 15 days with 50% pay and, moreover, another 30 days is allowed for specific more benefits to the employees. For instance, in most of the Middle Eastern countries, standard working hours are stated as 8 hours a day. Further, countries like Kuwait restrict overtime hours to 2 hours a day, while in Oman, the maximum working hours including overtime is 12 hours a day.
2. Withholding of taxes on employment income : While GCC countries don’t have the concept of personal taxes, countries like Turkey, Lebanon, Egypt, and Iraq have complex tax regulations. In Turkey, all the calculations are done at a salary component level including gross-up calculations which makes it quite complex to arrive at the net pay. In payslips too, net and gross figures need to be reflected at the component level. Likewise, in Lebanon, if an employee hasn’t worked for a full year, then their income is considered as earned, while the tax slabs need to be apportioned based on the time the employee has worked. In Iraq the way exemption is calculated for allowances makes it quite sensitive to errors. In Egypt, income needs to be annualised to calculate tax. In practice, multiple methods are followed including monthly, yearly, monthly with annualization and cumulative calculations. However, multiple methods may lead to incorrect calculations. Therefore, it’s important to ensure that the calculated tax is compliant. 3. Contribution to Social Security : There are different social security benefits that citizens receive in each country, and they must pay a certain amount to contribute towards these schemes. It falls upon the employer to deduct or remit these amounts, as required by the specific laws. The contributions in some countries could even vary for local nationals and expatriates.
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