Saudi Arabia Payroll Outsourcing Alert

Saudi Arabia – NITAQAT Program 2022

The Saudi Ministry of Human Resources and Social Development’s (MHRSD) has launched a revised version of the Saudization program NITAQAT. The second version hopes to provide 340,000 jobs by 2024 and simplifies the compliance rules for businesses. The NITAQAT program is one of the most important initiatives undertaken by MHRSD. It was first launched in 2011 to encourage the localization of jobs and set a minimum wage for Saudis in the private sector. The second version of the program was developed in partnership with the private sector, a main partner in the ministry’s labor market decisions.

The new NITAQAT program aims to balance the relationships between the number of employees and required localization rate by providing attractive job offers and increasing labor market efficiency.

The new Program version of the NITAQAT contains the following new features:

• Localization plan for the next three years, with the aim of increasing the organizational stability of private sector institutions.
• The program will use a linear formula that is properly associated with the number of employees at an institution, instead of current localization rates that rely on classifying institutions into certain and fixed sizes.
• Merging activities with similar characteristics into 32 choices instead of 85.
• Establishing the minimum wage for Saudis nationals at 4,000 SAR

Employers can verify their Saudization requirement at the following website:

https://mol.gov.sa/Services/Inquiry/NitaqatCalculatorMotawar.aspx

The formula for calculating the applicable Saudization rate is provides below:

The Liner Formula:      X = M ln(X)+Y

• X The minimum percentage of the level.
• M Fixed value for each Activity (Table 1).
• S Fixed Saudization value for 3 years (Table 1)
• H Total headcount
• In(H) formula to calculate the natural logarithm of the total headcount.

Mercans’ Saudi Arabia Payroll Outsourcing Solutions

While Mercans’ KSA Payroll Outsourcing alerts will allow you to stay on top the latest development in KSA’s payroll regulations, you should still get in touch with Mercans’ KSA payroll outsourcing, compliance, PEO/GEO and BPO specialists for a free consultation on setting up fully compliant payroll and HR functions. Better yet, outsource your payroll and HR activities in KSA to Mercans and our KSA payroll outsourcing experts will ensure that your employees will always be paid on time and in accordance with the KSA regulations.

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