Aqid ERPWhat the law fixes, and what it leaves to you
The Labour Law requires a written contract that states the wage and the allowances, payment through the Wage Protection System by the end of each month, and equal pay for equal work. It sets no grades, no bands and no statutory minimum wage for the private sector. Two figures are often mistaken for a minimum: SAR 4,000, the wage at which a Saudi employee counts as a full employee in the Nitaqat Saudization count, and SAR 3,000, below which they do not count at all. Both are Saudization rules, not wage law.
GOSI fixes the contribution base: basic salary plus housing allowance, or the value of housing provided, between SAR 1,500 and SAR 45,000 a month. A Saudi employee contributes 9.75 percent of that base and the employer 11.75 percent; for a non-Saudi the employer pays 2 percent for occupational hazards and the employee nothing. Transport and other allowances sit outside the base, which is why the scale separates them.
The columns of a scale
- Grade, and the job titles that belong to it.
- Basic salary band: a minimum and a maximum.
- Housing allowance as a percentage of basic. 25 percent is common in the private sector; some contracts use two or three months' basic a year, which is the same thing expressed differently.
- Transport allowance as a fixed monthly amount.
- Total package at each end of the band, so an offer letter can be checked at a glance.
- Effective date, a policy reference, and two signatures: HR and the general manager.
One grade, worked
Grade 2, accountants: basic SAR 6,000 to 9,000, housing 25 percent, transport SAR 500.
| Minimum package: 6,000 + 1,500 + 500 | SAR 8,000 |
|---|---|
| Maximum package: 9,000 + 2,250 + 500 | SAR 11,750 |
| GOSI base at the maximum (basic + housing) | SAR 11,250 |
| Employee's GOSI at the maximum, 9.75% | SAR 1,096.88 |
| Employer's GOSI at the maximum, 11.75% | SAR 1,321.88 |
| Net at the maximum, no other deductions | SAR 10,653.12 |
Setting the bands
- Start from the jobs you have, not from a textbook: group them into five to eight grades by responsibility.
- Price the midpoint of each grade from the offers you have made and accepted in the last year; the band is roughly 80 to 120 percent of the midpoint.
- Keep Saudi employees at or above SAR 4,000 if Nitaqat counts matter to you; a lower wage costs a point in the count.
- Write the housing rule once, as a percentage, and apply it to every grade; a different rule per person is what makes a scale useless.
- Date the scale and keep the old one. A raise is a move within the band; a promotion is a move between grades.
From the scale to the pay run
The scale fixes each employee's basic and allowances. The month's payroll register applies that month's deductions (GOSI, absence, loans) and produces the net the WPS file carries to Mudad. Aqid ERP holds the grades in the payroll module and generates the register, the payslips and the Mudad file from them; the free salary-scale template is the same grid as a sheet, and the salary calculator does one employee's GOSI and net.