Payroll outsourcing is the most cost efficient approach for complying with the WPS regulations in Saudi Arabia as the Ministry of Labour expands the WPS compliance requirements.
The Ministry of Labour has announced that effective from November 1, 2015, all companies with at least 100 employees must process their payroll payments through the Wages Protection System (WPS) in Saudi Arabia. However, starting from February 1, 2016, this requirement will apply to all companies with at least 10 employees.
In accordance with the Ministry of Labour, the employers that are subject to the WPS program must comply with the following payroll processing requirements:
- Register their company with the WPS program.
- Produce an electronic WPS file every time they process payroll payments to their staff.
- Pay all of their employees through the WPS process in Saudi riyals and to the employees’ local bank accounts.
- Upload the WPS file to the Saudi Arabia's Ministry of Labour e-serivce portal after the file has been processed and certified by the employer's bank.
Please note: employers that do not comply with the WPS program requirements will have all of their MOL services, including Iqama transfers, suspended.
The Nitaqat program now applies to all companies, including small establishments with less than 10 employees.
The Ministry of Labour has also announced that the Nitaqat program now includes all companies with less than 10 employees. All small establishments operating in Saudi Arabia must employ at least 1 full-time Saudi national, who has been registered with GOSI, in order to be categorized in the green Nitaqat zone.
Non-compliance with this requirement will result in the denial of the company’s work permit renewal, Iqama transfer and new employment visa requests.
The Solution? Outsource Your Payroll Function In Saudi Arabia In Order To Stay Compliant.
The generation of electronic WPS files requires specialized or customized software, which can be very expensive to implement and support. Your payroll outsourcing provider will complete all payroll calculations and filings on your behalf in line with the laws of Saudi Arabia.
They will also generate and upload WPS files in the format prescribed for your bank and the Ministry of Labour. This will allow you to reduce the burden on your HR and payroll staff and minimize the investment into expensive HR/Payroll software solutions.