How to run payroll in Saudi Arabia: a monthly checklist
Eight steps that take a Saudi payroll run from attendance to the bank transfer, with the rules that apply at each step.
1. Confirm each employee's wage
Under the Labour Law the wage is the actual wage: basic pay plus allowances such as housing and transport. Keep the basic wage and each allowance as separate items, because different rules use different parts of the wage.
2. Add overtime
Each overtime hour is paid at the hourly wage plus 50% of the basic hourly wage (Article 107). Hours worked on official holidays and Eids count as overtime. Common practice divides the monthly wage by 30 days and by 8 hours to get the hourly wage. The Ministry cites a limit of 720 overtime hours a year.
3. Apply leave and absences
- Annual leave: 21 days a year, 30 days after 5 consecutive years (Article 109).
- Sick leave: within one year, whether continuous or not: first 30 days at full pay, next 60 days at 75%, next 30 days unpaid (Article 117).
- Maternity leave: 12 weeks at full pay since the 2025 amendments.
4. Apply deductions
Deduct loans, advances and penalties only where the law allows. Deductions above half of an employee's pay are flagged as a violation in Mudad.
5. Calculate GOSI contributions
Contributions are based on basic pay plus housing allowance, between SAR 1,500 (SAR 400 for non-Saudis) and SAR 45,000 a month.
| Employee | Employee share | Employer share |
|---|---|---|
| Saudi, registered before 3 July 2024 | 9.75% | 11.75% |
| Saudi, first registered on or after 3 July 2024 (from July 2026) | 10.75% | 12.75% |
| Non-Saudi | 0% | 2% |
6. Work out net pay
Net pay = wage + overtime and other earnings − unpaid leave − deductions − the employee's GOSI share. Accrue the end-of-service award for each employee every month so the liability is always known.
7. Upload the wage protection file to Mudad
Upload the file within 30 days (the period since 1 March 2025). Mudad checks it against GOSI data and shows your compliance rate straight away. Read the Mudad guide
8. Pay and keep records
Pay salaries by bank transfer through the wage protection system and give each employee a payslip. Keep payroll records for every month.
Run payroll in one place
Syncstead handles payroll, GOSI, leave and end of service, with ready files for Mudad and bank upload, in Arabic and English.
Request a demo Free settlement calculatorFor general information, not legal advice. Sources: Ministry of Human Resources (overtime), Ministry of Human Resources (sick leave), GOSI employer FAQ, Argaam (new GOSI rates), Deloitte (Mudad 30 days).