Saturday, August 9, 2014

Deduction for Saudization from Salary

My Employer is deducting 9% from my salary for Saudization, is it legal? I am an expatriate.

Question by Visitor
Hope you will be fine. I have some problem with my employer I would be thankful if you could advise me. In Aug 2013 I came to Saudi Arabia on company visa. My employer is working in construction industry and I would say they are so big in this industry. In Pakistan I have signed a contract for 6,000 Saudi Riyal monthly salaries. But when I came here they told me there will be 9% deduction towards some Saudi program. When I received salary it was 5,507 Saudi riyal as package which shows they deduct 11.5 % instead of 9%.Then in Dec 2013, I have received an increment of 500 which makes my package 6,500 but I am receiving SR 5,600, which shows they are now deducting almost 14.7% from my salary. I have written letter to HR manager. May I please know what legal options available to me to enforce the terms of contract.

Answer by Steve
I personally know you and I cannot even believe that the group in which you are working can violate the Saudi Labor Law like this. If it is clearly stated in your appointment letter or employment contract that you will be getting SR 6,000/- and your company is paying you less than that (unless it is explicitly stated in the contract) you are clearly underpaid. 

You should ask for the legal justification for all the deductions they have made to your account up to now. You can challenge them in the labor office and they will have to pay you back this money. Saudi Labor Law does not allow any unauthorized deduction from the account.

Moreover, 9% is deducted from the salaries of Saudi Nationals as per GOSI Law. But this percentage is not applied to expatriates even under GOSI Law.

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