Saudi Labor Law Salary Increment: Employment Rights & Regulations

In this article we will explain you how does this work under Saudi Labor Law. Also, anything you need to know about how what can you do to get your salary increment law.

The Basic Wage and the Actual Wage

According to the Saudi Labor Law, your wage consists of two components: the basic wage and the actual wage. The basic wage is what you receive for your work according to your employment contract, regardless of the type or method of payment. The actual wage is the basic wage plus any other increments that you receive for your effort, risk, or performance at work.

The basic wage cannot be reduced without your written consent. Unless there is a court order or a legal justification. The actual wage can be reduced if the increments are temporary or conditional. However, only if the reduction does not affect the basic wage.

Although there are no explicit rules for salary increment in Saudi Labor Law, there are factors you must have in mind. For example, that you cannot stop paying your taxes in Saudi Arabia KSA after your salary increment.

The Inflation Rate and the Market Conditions

One of the factors that may influence your salary increment is the inflation rate in Saudi Arabia. The inflation rate measures the change in the prices of goods and services over time. A high inflation rate means that your purchasing power decreases, as you need more money to buy the same things.

The inflation rate in Saudi Arabia has been relatively low in recent years, ranging from 2% to 2.5%. Meaning that you should expect at least a similar percentage of salary increment every year to maintain your living standards. However, this is not a legal obligation for your employer, as there is no rule for salary increments in Saudi Labor Law.

Another factor that may affect your salary increment is the market conditions and the demand and supply of labor. Depending on your profession, skills, experience, and performance, you may have more or less bargaining power with your employer. If there is a high demand for your services and a low supply of workers with similar qualifications, you may be able to negotiate a higher salary increment. On the other hand, if there is a low demand and a high supply of workers like you, you may face more competition and less leverage.

The Employer’s Discretion and Policy

Ultimately, your salary increment depends largely on your employer’s discretion and policy. As there is no rule for salary increments in Saudi Labor Law, your employer can decide whether to give you a salary increment or not, and how much to give you. However, once your employer gives you a salary increment, he cannot reduce it in the following years without your consent.

Your employer may have a policy or a system for determining salary increments considering various criteria. Such as, performance appraisal, seniority, productivity, profitability, etc. You should be familiar with your employer’s policy and system, Additionally, try to meet or exceed the expectations and targets set by your employer.

What to Do If You Don’t Receive a Salary Increment?

If you believe that you deserve a better increment, here you have some rules for salary increment to think about. You can try to negotiate with your employer by presenting evidence of your achievements, contributions, and market value. You can also look for another job that offers better pay and conditions, and resign from your current job. In this case, you can either go on a final exit and return to Saudi Arabia on a new visa, or request a transfer of sponsorship from your current employer.

However, before you take any action, you should weigh the pros and cons carefully. You should also respect your employment contract and follow the legal procedures for resignation or transfer of sponsorship. You should not breach your contract or violate any laws or regulations that may jeopardize your rights or reputation.

Other Factors That Affect Salary Increment

Besides the inflation rate and market conditions, there may be other factors that affect your salary increment. Some of these factors are:

• Your employer’s financial situation and profitability

If your employer is doing well financially and making profits, he may be more willing and able to give you a salary increment. If your employer is struggling financially and losing money, he may be less able or willing to give you a salary increment.

• Your employer’s policy and system for salary increments

Your employer may have a policy or a system for determining salary increments based on various criteria, such as performance appraisal, seniority, productivity, profitability, etc. You should be familiar with your employer’s policy and system, and try to meet or exceed the expectations and targets set by your employer.

• Your personal relationship with your employer

Your personal relationship with your employer may also influence your salary increment. If you have a good rapport and trust with your employer, he may be more inclined to reward you with a salary increment. If you have a poor or strained relationship with your employer, he may be less inclined to reward you with a salary increment.

How to Negotiate with Your Employer for a Better Salary Increment

If you believe that you deserve a better salary increment than what you receive from your employer, you can try to negotiate with your employer by following these steps:

• Prepare yourself

Before you approach your employer, you should do some research and preparation. You should know how much you are worth in the market. Based on your skills, experience, qualifications, and performance. Have in mind how much your employer can afford to pay you, based on his financial situation and profitability. You should have evidence of your achievements, contributions, and value to the company. Remember to have a realistic and reasonable expectation of how much you want, having in mind rules for salary increment.

• Choose the right time

Timing is important when it comes to negotiating for a salary increment. You should a moment when your employer is in a happy mood and not stressed with work. Also, choose a time when you have recently completed a successful project or achieved a significant goal. You should avoid asking for a salary increment when your employer is facing financial difficulties. Furthermore, avoid to ask when the company is undergoing changes or restructuring.

• Ask for a meeting

You should ask for a meeting with your employer to discuss your salary increment. It is preferable to not bring up the topic casually. Specially in front of other people. You should be polite and respectful when asking for a meeting, and explain that you want to discuss your performance and compensation. Finally, remember to schedule the meeting in advance and confirm it with your employer. Though not explicit, you can consider these tips as rules for salary increment in Saudi Saudi Labor Law.

What do if your employer is not sure?

However, your employer or their representative might still be unsure. Therefore, you can be willing to insist on a respectful way. Here are some of the actions you could follow:

• Present your case

During the meeting, you should present your case clearly and confidently. You should start by expressing your appreciation and satisfaction with your work and the company. Then, you should also highlight your achievements, contributions, and value to the company. Furthermore, feel free to provide evidence to support your claims. You should then state your salary expectations and explain why you deserve a salary increment. Finally, remember to mention the inflation rate and market conditions, and how they affect your living standards and motivation.

• Listen and negotiate

After presenting your case, you should listen to your employer’s response and feedback. Remember to be prepared to face some resistance or objections from your employer, and be ready to address them. You should also be flexible and willing to compromise, as you may not get exactly what you want. You should try to find a win-win solution that satisfies both you and your employer. It is important that you avoid being emotional, aggressive, or defensive, as this may harm your relationship with your employer.

• Follow up

After the meeting, you should follow up with your employer and confirm the outcome of the negotiation. It is essential that you thank your employer for their time and consideration, and express your commitment and loyalty to the company. You should also keep a record of the agreement and make sure that it is implemented in your next paycheck.

Conclusion

In summary, there are no specific rules for salary increments in Saudi Labor Law. Your salary increment depends on various factors, such as your basic wage and actual wage, the inflation rate and market conditions, and your employer’s discretion and policy. If you are not satisfied with your salary increment, you can try to negotiate with your employer or look for another job. However, you should always act professionally and legally.

If you need further information about rules for salary increment in the law, do not hesitate to contact us anytime.