The HR Development Fund in Saudi Arabia is among multiple government authorities that have announced new initiatives to mitigate the impact of COVID-19 on the private sector.
The Wages Protection System (WPS) is signified by a monthly file received by banks across Saudi Arabia crediting employees. The establishment in which these employees work sends the Wages File to its associated bank,
An update, Article (41), has been added to the Executive Regulations of Labor Law as part of the numerous initiatives which the Saudi government has announced to provide business continuity in response to COVID-19. The update provides legal options for employees and employers to provide flexibility in employment contracts as preventative measures against redundancy or company closure.
Due to COVID-19, Saudi Arabia has announced it will postpone the filing and the associated payments of the following taxes for three months.
As a business in the Kingdom, you might be wondering how to stay green within the Nitaqat guidelines that have accompanied Saudization. It is important to know that red-zone companies face business limitations as a result of non-compliance, and as of February 2020, the yellow band of Nitaqat has been canceled; if you do not stay green, you are in the red. Nitaqat and Saudization are essential components of operating in the Kingdom, and without proper knowledge and application of the program, your company is at risk of unnecessary consequences. Many companies are unsure of their Nitaqat requirements and with recent changes such as the cancelling of the yellow zone in Nitaqat make it vital to know.
It is common for companies to lose track of calculating Zakat as they grow and expand. Zakat is an Islamic form of charity and is one of the five main pillars of Islam. It applies to all types of wealth, from farming and crafting to major stocks, which means Saudi companies must abide by it and make it part of their financial equation every year.
Saudi Arabia has ushered in an era of entrepreneurship with new opportunities for foreign investors and SMEs, and constantly-updated regulations to match.
As of the third quarter of 2019, Saudi nationals occupied nearly 24% of the workforce. It was considered a slight, but quick increase from the first quarter of the same year. This is an indicator that what the Vision 2030, along with Saudization are accomplishing is vitalizing the young society of Saudi Arabia, increasing their involvement in the workforce and bringing new and exciting elements of art and culture into their lives.
Entrepreneurship in Saudi Arabia has evolved over the years, and the government has taken many steps to improve the market.
The General Organization for Social Insurance (GOSI) carries out the social insurance regulations in Saudi Arabia. GOSI collects contributions from employers, covers social insurance according to the law and pays benefits for insured persons or their families. The organization provides medical treatment, allowances and services for injured or disabled individuals or to the families of insured individuals who are deceased, in which case the death pension is received. GOSI calculations vary across employee nationalities with employees split into three main groups, Saudi Nationals, GCC nationals who have varying contributions and other expat workers. For Saudi nationals in the private sector GOSI contributions equal 22% of the maximum monthly applicable earnings (9% each for the employee and employer for pension contributions, 1% each for unemployment contributions and 2% for occupational hazard which is covered by the employer). The monthly earning combines basic salary, housing allowance and commissions. In-kind housing is equivalent to a two-month basic salary divided by twelve months. Meanwhile, minimum salary 1500 SAR will be counted as half Saudi and minimum salary 3000 SAR will be counted as full Saudi.