Payroll in Saudi Arabia has to satisfy three checks every month. Wages are paid into employees’ bank accounts at least monthly under the Labour Law, a wage file is submitted through Mudad under the Wage Protection System within 30 days of the due date, and GOSI contributions are paid within the first 15 days of the following month. End-of-service awards sit outside the monthly run but must be accrued, and paid within one or two weeks of the contract ending.
This is general information, not legal advice. Rates, deadlines and penalties change, so confirm them with the Ministry of Human Resources and Social Development (HRSD), GOSI or a qualified adviser before relying on them for a specific employer’s payroll in Saudi Arabia.
The terms behind payroll in Saudi Arabia
The Wage Protection System (WPS), also called the Wage Protection Program, is HRSD’s programme for monitoring whether private-sector establishments pay wages on time and in the agreed amount. It began in 2013 with the largest employers and has been extended in stages to small establishments. For payroll in Saudi Arabia, that means paying the wage is not enough; the wage file must also be submitted.
Mudad is the HRSD platform where establishments upload their wage files and see their compliance rate.
GOSI is the General Organization for Social Insurance. It collects employer and employee contributions, which payroll in Saudi Arabia calculates on the contributory wage.
The end-of-service award is the payment due under Articles 84 to 88 of the Labour Law when employment ends. How it is calculated is covered in the guide to the Saudi end of service calculation.
The six steps of payroll in Saudi Arabia, in order
This is how payroll works in Saudi Arabia each month, and the order matters because each step feeds the next.
1. Calculate pay and deductions
Payroll in Saudi Arabia starts from gross pay, which is the contractual wage plus any overtime. Article 107 requires an additional amount for overtime hours equal to the hourly wage plus 50 per cent of basic wage. Deductions are limited. Article 92 bars deductions against private rights without the worker’s written consent, apart from listed cases that include social insurance contributions. Article 93 caps total deductions at half the wage due unless the labour court allows more.
2. Pay through a bank
Under Article 90, monthly-paid workers are paid once a month, and firms must deposit wages into workers’ bank accounts through approved banks in the Kingdom unless the Minister exempts them. If an employer delays wages without valid justification, Article 94 lets the labour court order payment and impose a fine of up to twice the outstanding wages.
3. Submit the wage file through Mudad
The Mudad wage file is an electronic sealed file of pay and reconciliation data that establishments upload through the platform, and it is how HRSD monitors payroll in Saudi Arabia. HRSD says the data is checked against social insurance records and the establishment’s compliance rate is updated. Since 1 March 2025 the allowed upload period is 30 days from the due date. It was 60 days before that, and the Ministry said that 91 per cent of establishments already uploaded within 30 days. HRSD says establishments that do not comply face the penalties set in the labour system.
Because Mudad data is compared with social insurance records, the wage registered with GOSI, the wage in the contract and the wage actually paid should agree before the file goes up.
4. Pay GOSI contributions
GOSI’s employer guidance says contributions must be paid within the first fifteen days of the month after the one they relate to. The rates depend on who the employee is, so payroll in Saudi Arabia needs a rule per employee group, not one rate for the whole company.
| Employee group | Annuities | Occupational hazards | SANED |
|---|---|---|---|
| Saudi, under the existing system | 9% employer, 9% employee | 2% employer | 0.75% employer, 0.75% employee |
| Saudi, under the new system (joined with no earlier contribution history, from 3 July 2024) | 10% employer, 10% employee from 1 July 2026, rising by 0.5 points each July to 11% in July 2028 | 2% employer | 0.75% employer, 0.75% employee |
| Non-Saudi | Not applicable | 2% employer | Not applicable |
The annuities branch applies to Saudi workers, and SANED, the unemployment insurance scheme, covers Saudis registered with the annuities branch. The contributory wage has a ceiling of SAR 45,000 a month. GOSI’s employer FAQ defines it as the basic wage plus a housing allowance paid in cash, before deductions, and excludes overtime, allowances for the nature, risk or place of work, annual bonuses and benefits in kind.
As an illustration only, take a contributory wage of SAR 10,000. A Saudi employee under the existing system has SAR 975 deducted (9% plus 0.75%) and the employer pays SAR 1,175 (9%, 0.75% and 2%). Under the new system at the 10% step the figures are SAR 1,075 and SAR 1,275. For a non-Saudi employee nothing is deducted and the employer pays SAR 200.
5. Reconcile before closing the month
Before closing the month, the payroll register, the bank transfer and the wage file should show the same net total, and the GOSI contribution should match the registered contributory wage for each employee. Mismatches are cheaper to fix before the bank file is sent and the deadlines start to run.
6. Accrue and settle end of service
Under Article 84 the award is half a month’s last wage for each of the first five years and a month’s wage for each year after, and Article 85 reduces it for resignations under ten years. Because the liability grows with every month of service, many employers accrue it monthly, and payroll in Saudi Arabia has to carry it even though it never appears in the monthly pay run. At the end of the contract, Article 88 requires wages and entitlements to be settled within one week, or two weeks if the worker ended the contract, and Article 111 adds pay for accrued leave that was not taken.
Does the 30-day Mudad window mean wages can be paid late?
No. The 30 days applies to uploading the wage file. When wages are due is set by the Labour Law and the contract, and Article 90 requires monthly-paid workers to be paid once a month. A delayed payment is a separate problem from a late file. Payroll in Saudi Arabia therefore runs on two clocks, one for the date wages are due and one for the upload date of the wage file.
What payroll software has to produce
Each step above is something the payroll software Saudi Arabia employers choose must either do or feed. In payroll that sits inside a human capital management system, the same employee record should give you the payslip, the bank file, the wage file for Mudad, the GOSI contribution by employee group and the end-of-service accrual. Ask any vendor to run payroll in Saudi Arabia on your own data, with a Saudi employee under each GOSI system, a non-Saudi employee, a mid-month joiner and a resignation. The wider process of comparing vendors is set out in how to choose HR software in Saudi Arabia.
Check your payroll in Saudi Arabia against these six steps
Tell us how payroll runs today and where the files come from, and we will walk through which steps your current tools cover.
Sources
- Labor Law (Royal Decree No. M/51 of 23/8/1426H), English text, Articles 84 to 88, 90, 92 to 94, 107 and 111, Ministry of Human Resources and Social Development. hrsd.gov.sa. Accessed 2 October 2026.
- Human Resources Ministry: Wage Protection File Upload Period on Mudad Platform Reduced to 30 Days, Saudi Press Agency, 3 February 2025. spa.gov.sa. Accessed 2 October 2026.
- Wage Protection Program: A Strategic Tool to Preserve Workers’ Rights, Ministry of Human Resources and Social Development. hrsd.gov.sa. Accessed 2 October 2026.
- Wage protection (national transformation initiatives), Ministry of Human Resources and Social Development. hrsd.gov.sa. Accessed 2 October 2026.
- Uploading the Wage Protection file, Ministry of Human Resources and Social Development. hrsd.gov.sa. Accessed 2 October 2026.
- Employer FAQ, General Organization for Social Insurance. gosi.gov.sa. Accessed 2 October 2026.
- Contributor FAQ, General Organization for Social Insurance. gosi.gov.sa. Accessed 2 October 2026.
- Unemployment Insurance (SANED) FAQ, General Organization for Social Insurance. gosi.gov.sa. Accessed 2 October 2026.
- New Social Insurance System (1445H/2024), GOSI awareness platform. awareness.gosi.gov.sa. Accessed 2 October 2026.
- Council of Ministers Approves New Social Insurance Law for New Employees, Saudi Press Agency, 3 July 2024. spa.gov.sa. Accessed 2 October 2026.
- GOSI to increase pension contributions for new employees as of July 1, Argaam, 30 June 2025 (news report). argaam.com. Accessed 2 October 2026.
