# Payroll in Saudi Arabia: The Complete Employer's Guide *Everything an employer needs to know about running payroll under the Saudi Labor Law* > **In short:** A complete guide to payroll in Saudi Arabia: basic salary and allowances, GOSI contributions, end-of-service gratuity, leave rules and payroll software. - **URL:** https://www.snad.io/en/blog/kashf-rawatib-sharikaat-saudi-dalil - **Arabic original:** https://www.snad.io/blog/kashf-rawatib-sharikaat-saudi-dalil - **Category:** Guides — Human Resources - **Tags:** Payroll, Human Resources, Saudi Labor Law, GOSI, Snad, Employee Management - **Published:** 2026-05-10 - **Updated:** 2026-08-02 - **Publisher:** Snad (snad.io) Preparing a payslip in Saudi Arabia is not simply a matter of working out a number and sending it to the employee. It is a legal obligation that covers GOSI social insurance, end-of-service gratuity, annual leave and the rules of the Saudi Labor Law — and getting any of them wrong can expose you to fines. This guide explains every component of a Saudi payslip, how to calculate each one correctly, and which software can automate the whole process month after month. ## Components of a Saudi payslip A Saudi payslip is usually made up of the following: Basic salary: the amount agreed in the contract. It is the base used to calculate GOSI contributions and end-of-service gratuity. Housing allowance: usually 25% of the basic salary, and stated in the contract. Transport allowance: a fixed amount set by the employer. Other allowances: phone, meal and representation allowances, depending on the contract and the job title. Overtime: overtime hours are paid at one and a half times the basic rate. Deductions: the GOSI contribution (10% of the basic salary for Saudi employees), absence and lateness. Net salary = (basic salary + allowances + overtime) — deductions ## GOSI social insurance General Organisation for Social Insurance (GOSI) contributions are mandatory for every Saudi employee, and only part of the scheme applies to expatriates: For a Saudi employee: - Employee share: 10% of the basic salary - Employer share: 12% of the basic salary (9% insurance, 2% unemployment, 1% occupational hazards) For an expatriate employee: - No social insurance share is paid by the employee - The employer pays 2% for occupational hazards health cover Contributions are remitted to GOSI in the middle of each Gregorian month. Payroll software such as Snad calculates these figures automatically and produces the monthly GOSI reports ready to file. ## End-of-service gratuity End-of-service gratuity is the employee's entitlement when the contract ends, and it is calculated as follows: Less than 5 years: half a month's pay for each year of service More than 5 years: a full month's pay for each year of service Example: an employee who has worked 7 years on a basic salary of SAR 5,000 - Years 1-5: 5 × (SAR 5,000 ÷ 2) = SAR 12,500 - Years 6-7: 2 × SAR 5,000 = SAR 10,000 - Total gratuity: SAR 22,500 Note: an employee who resigns voluntarily before 5 years is not entitled to a gratuity. After 5 years, a resignation between 5 and 10 years of service entitles the employee to one third of the gratuity. ## Leave under the Saudi Labor Law The Saudi Labor Law makes the following leave entitlements compulsory: Annual leave: - Less than 5 years: 21 working days per year - 5 years or more: 30 working days per year Annual sick leave: - 30 days at full pay - 60 days at three quarters of pay - 30 days unpaid Hajj leave: for an employee who has not yet performed the pilgrimage, once during the entire period of service, for no more than 15 days on pay. Maternity leave: 10 weeks for a working mother. Bereavement leave: 5 days for a death in the immediate family. ## Automating payroll with dedicated software Running payroll by hand for 10 employees or more takes hours every month and leaves plenty of room for error. The answer is dedicated payroll software such as Snad: - Enter employee data once, then calculate the salary automatically every month - Automatic calculation of GOSI, allowances and overtime - Leave management and balance tracking - Attendance, departure and absence tracking - Automatic journal entries when payroll is closed - Electronic payslips for every employee - Monthly and annual reports for management The time you save each month easily covers the cost of the software. ## Frequently asked questions ### Are payslips a legal requirement in Saudi Arabia? Yes. The employer is required to document salaries and pay them on schedule. The Wage Protection System (WPS) requires salaries to be paid electronically and recorded digitally. ### What is the Wage Protection System (WPS)? A Saudi system that requires employers to pay employee salaries through approved banks and financial institutions and to record each payment electronically. Its purpose is to make sure salaries are paid on time. ### Does payroll software generate the WPS file automatically? Some of the more advanced payroll systems support exporting a WPS file. Check for this feature before you subscribe if your company has 10 employees or more. --- ## About the publisher **Snad (سند)** — a private Saudi software company based in Riyadh, founded 2025. Legal form: Sole proprietorship. Commercial registration: 7038154642 VAT number: 310959226500003 Only official domain: snad.io > Snad is a private commercial business-management platform. It is not a > government body, not a bank, and not a government services portal, and it > is not affiliated with any government entity. Any site or app with a > similar name is unrelated to Snad.