How to calculate basic salary in Saudi Arabia
Saudi Arabia is one of the wealthiest nations in the world, with citizens enjoying strong economic prosperity, high wages, and a cost of living that is lower than other major cities in the Middle East. All of this makes it an attractive destination for foreign workers who want to take up residence.
Calculating the basic salary for a job in Saudi Arabia is fairly straightforward and depends on a number of factors, such as the type of job, qualifications, experience and working hours. It is important to note that the salaries in Saudi Arabia are different from those in other countries due to the structure in which salaries are calculated.
Before delving into the calculation of the basic salary, it is important to understand how the Saudi Arabian government approaches salaries. The Saudi Arabian government sets a minimum wage, which is the minimum allowed by law and is still a very generous wage. This wage is then supplemented by other benefits, such as bonuses and end-of-service payments, depending on the employer and the type of job.
The basic salary usually takes the form of a monthly salary, which can range from SAR 3,000-14,000 ($800-$3,666) per month, depending on the job, qualifications and experience. This salary is usually supplemented by a range of other benefits such as housing, fuel and other allowances, medical insurance, and a salary adjustment every two years. The allowances and other benefits can be significant and can push up the final salary to around SAR 30,000-50,000 ($8,000-$13,333) per month.
The calculation of the basic salary depends on the type of job and can involve many factors such as the number of hours worked, the qualifications and experience of the employee and any additional benefits that the employer is offering. For example, a job in IT may have different wages than a job in hospitality.
It is possible to use an online salary calculator to help estimate the basic salary for a job in Saudi Arabia. These calculators use Saudi Arabia’s labor law as a reference to calculate the salary, taking into account the working hours, qualifications, experience and other benefits.
In addition to a salary calculator, it is also important to make use of other helpful resources such as the Saudi Arabian government website, which contains information on the minimum wage and a number of other tips on wages and salaries. There are also a number of online forums dedicated to helping foreign workers understand the labor laws and calculate their salaries.
Job Experience
Experience is an important factor when calculating basic salary in Saudi Arabia. The more experience that the employee has, the higher the salary that is offered. It is important to note that Saudi Arabia follows a traditional approach when it comes to wages, with senior staff earning more than junior staff. This can be seen in a number of industries including IT, hospitality, finance and healthcare.
Experience can also play a role in the type of benefits that the employee is offered. For example, an employee with 5 years of experience may receive additional benefits such as an end-of-service payment or a larger housing allowance. On the other hand, an employee with no work experience may not be offered any additional benefits.
Length of Employment
The length of employment can also play an important role in the calculation of the basic salary. As with experience, the longer the employee stays with the company, the higher the salary will be. This is due to the fact that companies in Saudi Arabia tend to reward employees for their loyalty and dedication to the company.
It should be noted that, although salary increases come with length of service, there is also a ‘benchmark’ salary for certain positions that is set by the Saudi government. This means that an employee with many years of service may not be able to negotiate a salary that is higher than this benchmark.
Qualifications
The qualifications of the employee can also play an important role in determining the basic salary. Jobs in Saudi Arabia that require special qualifications or experience, such as medical staff or engineers, tend to pay higher salaries than those that don’t require such qualifications.
Qualifications are also taken into account when calculating end-of-service payments. Employees with higher qualifications may be offered more generous end-of-service payments than those without such qualifications.
Bargaining Power
It is also important to note that bargaining power can play an important role in the calculation of the basic salary. Employees who have greater bargaining power, such as those with a higher qualifications or experience, may be able to negotiate a higher salary.
On the other hand, employees who do not have strong bargaining power, such as those with no experience or qualifications, may not be able to negotiate a higher salary. In this case, the employer may be willing to offer additional benefits such as housing allowance or an end-of-service payment.
Exchange Rates
Lastly, it is important to note that the exchange rate between the Saudi Riyal and US Dollar can also affect the calculation of the basic salary. The Saudi Riyal is a floating currency, meaning that it can fluctuate in value. This means that the same job can be paid differently depending on the exchange rate at the time.
In conclusion, calculating the basic salary for a job in Saudi Arabia is fairly straightforward and is determined by a number of factors, such as the job, qualifications and experience of the employee, working hours and any additional benefits offered by the employer. It is important to make use of online tools such as salary calculators and Saudi Arabian government websites to help calculate the best salary for one’s position.
