Vacation pay calculation in Saudi Arabia is an essential side of the labor framework, confirming that employees receive fair and deserved compensation during their well-earned time off. Understanding how vacation pay works is not only necessary for employees seeking a proper work-life balance but also essential for employers who wish to comply with Saudi Labor Law. Every employee in the Kingdom is entitled to an annual paid vacation, which underscores the importance of personal well-being alongside professional responsibilities.
In this article, we will explore the complicated details of vacation pay calculation, delve into the legal stipulations that govern these processes, and clarify the rights and obligations of both employers and employees regarding annual leave. By examining these important aspects, we aim to highlight how vacation pay plays a significant role in promoting a fair and equitable work environment in Saudi Arabia, addressing the concerns that often surround this topic for many employees.
المحتويات
Vacation Pay Calculation In Saudi Arabia
How to calculate vacation pay in Saudi Arabia?
Vacation pay calculation in Saudi Arabia involves a few straightforward steps. Here’s a step-by-step guide:
- Identify Monthly Salary:
- Determine the employee’s total monthly salary.
- Determine Annual Leave Entitlement:
- Less than 5 years of service: 21 days of annual leave.
- 5 years or more: 30 days of annual leave.
- Calculate Daily Salary:
- Use the following formula:
- Daily Salary = Monthly Salary ÷ 30
- Calculate Vacation Pay:
- Use the following formula:
- Vacation Pay = Daily Salary × Annual Leave Days
- Example Calculation:
- Monthly Salary: SR 10,000
- Years of Service: 4 (Annual Leave Days = 21)
- Step 1: Calculate Daily Salary:
- Daily Salary = 10,000 ÷ 30 = SR 333.33
- Step 2: Calculate Vacation Pay:
- Vacation Pay = SR 333.33 × 21 = SR 7,000
- Use this method for accurate vacation pay calculation in Saudi Arabia to confirm compliance with Saudi labor laws and fair compensation for employees.
Read also: Saudi Labor Law Vacation Pay: A Comprehensive Guide
Annual Vacation Calculator
An annual vacation calculator is a useful tool for employees and employers to define vacation pay calculation in Saudi Arabia based on individual salary and years of service. In Saudi Arabia, the annual leave entitlement is 21 days for employees with less than 5 years of service and 30 days for those with more.
To calculate vacation pay, you need the employee’s monthly salary and their years of service. First, determine the number of annual leave days based on tenure. Next, calculate the daily salary by dividing the monthly salary by 30. Finally, multiply the daily salary by the number of annual leave days to arrive at the total vacation pay.
For example, if an employee earns SR 10,000 monthly and has 4 years of service, their vacation pay would be calculated as follows: Daily salary = SR 333.33, then vacation pay = SR 333.33 x 21 days = SR 7,000.
This calculator simplifies the process of managing annual leave entitlements, including accurate compensation for employees and helping organizations comply with labor laws efficiently.
Basic Salary Percentage In KSA
There is no law defining a basic salary percentage in KSA applicable to all workers. However, key points regarding salaries include:
- Minimum Wage for Saudis: The government raised the minimum salary for Saudi employees in the “Nitaqat” program from 3,000 to 4,000 Saudi Riyals. Saudi workers earning up to 3,000 Riyals count as half in localization calculations, while those earning at least 4,000 Riyals count fully.
- No fixed minimum wage for foreign workers: There is no legally mandated minimum salary for expatriates, allowing employers to negotiate salaries based on market conditions.
- Wage Protection System: Companies with ten or more employees must process salaries through the Wage Protection System, ensuring timely payments and compliance with labor regulations.
Overall, these regulations aim to enhance employment for Saudi nationals while ensuring fair treatment of all workers in the Kingdom.
Check out: Article 84 Saudi Labor Law: Guide to Gratuity Calculations
Saudi Labor Law Vacation Pay
The Saudi Labor Law vacation pay specifies annual leaves and how wages are calculated within its articles. Here are the most important points:
- Article 109: Employees are entitled to 21 days of paid annual leave if they have less than 5 years of service and 30 days if they have 5 years or more. Leave should be taken within the year it is earned.
- Article 110: Employers can schedule leave and must give employees 30 days’ notice before leave starts. Leave can be postponed for up to 90 days into the next year with employee consent.
- Article 111: Employees cannot cash in their vacation pay while employed, but they can receive payment for unused leave upon leaving the company.
- Article 112: Public holidays, like Eid, do not count against annual leave. If annual leave overlaps with public holidays, the holidays extend the employee’s time off.
- Definition of Wages (Article 2): Wages include the basic wage and any additional amounts, such as commissions, allowances, and performance rewards.
This structure helps protect employee rights regarding vacation pay in Saudi Arabia.
In conclusion of our article about vacation pay calculation in Saudi Arabia, we explored how to compute annual leave pay by determining the employee’s daily wage and multiplying it by the number of vacation days taken. Through examples and references to key articles of the Saudi Labor Law, such as Articles 109, 110, 111, and 112, it is clear how these regulations promote fair treatment and transparency in the workplace.
The importance of vacation pay calculation in Saudi Arabia provisions cannot be overstated, as they contribute to a comfortable work environment that acknowledges employees’ rights. A well-structured vacation pay system fosters employee satisfaction and productivity, ultimately benefiting the workforce and the economy as a whole. By ensuring all employees receive an appropriate percentage of their basic salary during their annual leave, Saudi Arabia is making strides towards creating a more balanced and equitable labor market.
Learn about: End of Service Benefits Saudi Labor Law: Rights After Contract Termination
The Etqan Al Mutamayza Law Firm can provide the necessary support. You can contact their team through the following mobile numbers: 056113776, 0541110440, and 504315333.
Alternatively, you can visit our branches:
Jeddah: Al-Aziziyah District–Mohammed bin Abdulaziz Street (Tahlia)
Riyadh: King Abdulaziz Street—In front of Kingdom
Dammam: Al-Ashri’a Street, Al-Badeea, Dammam 32415.
FAQs
How to compute vacation pay?
Vacation pay calculation in Saudi Arabia involves determining the employee’s daily wage and multiplying it by the number of vacation days taken.
What is the vacation rule in Saudi Arabia?
Employees are entitled to 21 days of paid annual leave for less than 5 years of service and 30 days for 5 years or more.
How to calculate annual leave salary?
The annual leave salary is calculated based on the employee’s average wage over the relevant period multiplied by the number of leave days.
How to calculate EOS in KSA?
To calculate the end-of-service gratuity (EOS) in Saudi Arabia, follow these steps:
For the first five years of service, the employee is entitled to half a month’s salary for each year worked.
For any additional years beyond five, the employee receives a full month’s salary for each additional year.
The total EOS is the sum of these amounts based on the employee’s last drawn salary.