Government supports companies’ Saudization growth

The Saudi government have released a new program to support private sector businesses in increasing their Saudization levels. The program will pay private sector companies a monthly contribution, called HADAF, to those that are achieving growth in hiring Saudi employees.

HADAF

HADAF supports private sector companies by contributing an equal percentage of their GOSI subscription as a monthly payment to the company’s account. To receive HADAF, the company must be registered with GOSI.

HADAF contributes 15% of new employee’s monthly salary calculated according to Saudization growth.

HADAF contributes 20% of new female employees’ monthly salary calculated according to Saudization growth.

Saudization growth is calculated effective from 1st August 2017.

Rules

The monthly payment is calculated based on growth indicators of Saudi employment in the private sector companies, in accordance with the following rules:

  • Employee’s age shall not be less than 18 years and not more than 60 years
  • The subsidy should include newly recruited Saudi employees who have been appointed to the establishment after July 31, 2017 and until the end of the program
  • The salary maximum of employees registered in the GOSI system shall not exceed 6,000 riyals monthly

The following categories are excluded from support program:

  • Regular non-affiliated students
  • Those who have commercial register or license
  • Employees in seasonal work or pensioners
  • Employee supported by other fund programs during the same support period

If the number of Saudi employees falls below the the base number, then the support payments will be paused. When the number of Saudi employees has increased above the base number, then the support payments will resume.

The base number of employees, both Saudi and non-Saudi, were registered as of 31 July 2017 in the GOSI system, and the company’s Saudization growth is measured monthly thereafter until the end of program.

Saudi employees who have been hired by the company after 31 July 2017 are qualified as Saudization growth.

In case of a change in employees included in the base number, the HADAF value is calculated based on the salary of the latest employee registered with the GOSI system, according to the date of registration. In the event that the registration date coincide, those with lowest salaries are approved.

Calculated monthly, HADAF payments are deposited in the company’s settlement account with GOSI. The first payment is deposited effective from October 2017.

If the company made use of the program by obtaining undue HADAF due to non-compliance of support rules, wrong data or the company submitted wrong or forged information, HADAF is suspended and the company is required to refund all the HADAF paid without any right to the fund.

Application procedures:

  1. Login to the GOSI system
  2. Subscription to the program from within the company’s GOSI account
  3. Approval through e-declaration to receive support

Program duration:

Program duration begins from 1st October 2017 and expires on 30 September 2019, and program extension is reconsidered according to Saudization growth motivation in private sectors prior to the program end.

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