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Tuesday, 21 October 2014

Rule for Salary Increment in Saudi Arabia

Have you ever heard or read about the salary increment rules and regulations in Saudi Arabia? I have been questioned several times about this subject from numerous readers of the blog and finally I have decided to spare sometime to write an article about it. You may have met many people in Saudi Arabia who came here decades ago and still working on the same package. It seems that their employers don’t even think that inflation and other price hikes are in the society. According to report published by the International Monetary Fund (IMF) the inflation rate in Saudi Arabia is around 3%. So employee should be compensated at least for the inflationary increase in prices even if there is no promotion.



Rule for Salary Increment in Saudi Arabia
Unfortunately, there is no law governing Salary Increment in Saudi Arabia. It purely depends upon the mutual agreement and contract of the employee and employer to determine the remuneration. When employees ask about the salary increment, employers don’t entertain the requests. Saudi Authorities do not think it to be appropriate to come into the issue of salary determination of employee. However, I personally think that they should come at least to rescue the employees who are paid very low. There should be a law governing minimum salary of expatriate employees as there is a law protecting minimum salary of Saudi employees. Minimum salary of Saudi employees is SR 3,000/- in Saudi Arabia.



What to do if Salary Increment is not received?
If employer is not giving any salary increment to employee or he is dissatisfied with the employer due to any other reason. The Saudi Labor Law allows expatriate workers to go for final exit or transfer sponsorship to a new employer after completing the contract. It is not advisable to leave the employer within the term of the contract as it may lead to penalties and fines for the violation of the law. I have explained it in this link “Fixed and Indefinite Contract”.



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