Having a reliable payrollsystem in Saudi Arabia is crucial to maintaining employee satisfaction and operational efficiency. Unfortunately, many companies struggle to manage payroll accurately and on time. Do you need help? Our comprehensivepayroll services in Saudi Arabia can provide you with accurate calculations of salaries, bonuses, and deductions, as well as timely disbursements, so you can promptly and securely pay salaries. We can also help you adhere to local labour laws and regulations while streamlining your payroll processes and reducing paperwork.
In this blog, we talk about the relevance of precise and punctual payroll systems in keeping employees happy, as well as the common mistakes you should look out for in payroll management.
Understanding the importance of an accurate and robust payroll system in your organisation
Saudi Arabia has specific labour laws governing payroll practices. It’s essential to adhere to these regulations to ensure compliance and foster a positive work environment. Make sure that employees receive at least the minimum wage and contribute to the social security fund. You also need to implement fair compensation practices, including regular salary reviews and performance-based incentives. Here’s why:
Boost job satisfaction among employees
A well-managed system for payroll in Saudi Arabia can create a positive experience in the workplace. In fact, a research report by SHRM found that 60% of employees rated pay and compensation as ‘very important’ in their overall job satisfaction, making it more crucial than other leading factors for job satisfaction, such as opportunities for growth or job security.
Avoid employee burnout
Inaccurate or delayed payroll can lead to serious consequences. The UKG Workforce Institute reported that 41% of employees feel burned out because of unfair compensation. This negatively impacts their engagement and performance, ultimately decreasing productivity and increasing absenteeism. Eventually, these employees may seek employment elsewhere, leading to an increased turnover rate.
Provide the right and sufficient benefits
Did you know that 60% of employees view benefits as the most important aspect of job satisfaction? At NADIA Global, we offer payroll services in Saudi Arabia to streamline benefits administration and reduce administrative burdens. We can also help you put together competitive benefits that attract and retain top talent while optimising your benefits budget and controlling costs.
Common mistakes in payroll management and ways to avoid them
Managing payroll in Saudi Arabia requires ensuring correct calculations and compliance with local labour laws. Plus, you must pay employees on time while abiding by local tax regulations, the Wage Protection System (WPS), and other challenges unique to the MENA region.
Not having the right tools and payroll services in Saudi Arabia can make your payouts and benefits system error-prone. Even the smallest mistakes can make a great impact on your employees and the company’s time and money. Let’s explore the most common mistakes in your payroll management system.
Mistake #1: Insufficient or non-compliance with the Wage Protection System
The WPS regulation requires employers like you to pay employees only through approved financial institutions. You must provide payroll data electronically to ensure accuracy and transparency. Failure to comply can result in suspended business operations, fines, and penalties.
To ensure compliance, have a WPS-compliant bank account that allows timely salary transfers. Outsourcing payroll services in Saudi Arabia can simplify the process of maintaining accurate records and submitting timely reports to the authorities.
Mistake #2: Misclassifying employees
When onboarding new hires, make sure they are classified correctly to avoid payroll errors and legal issues down the road. Saudi Arabia’s complex employment landscape can make it challenging to understand the fine line between contractors and employees.
While it may be tempting to misclassify workers to minimise costs, it’s essential to prioritise compliance with local labour laws and tax regulations. This lets you avoid penalties and fines from labour authorities and, perhaps more importantly, build trust and foster a productive work environment.
Mistake #3: Poor record-keeping practices
As an employer, you’re obligated to maintain accurate payroll records to avoid potential fines and errors. A low-quality recording system can also make audits more time-consuming, so it’s better to establish a robust process from the start. Our payroll services in Saudi Arabia can mitigate the disputes and mistakes that arise from poor record-keeping practices. We will assist your team in maintaining complete and detailed records of salary deductions, payments, and other relevant information.
Mistake #4: Inaccurate tax calculations
Saudi Arabia has a unique and complex tax landscape with specific payroll regulations. If you’re not updated, your company could be underpaying or overpaying its employees without realising it — a mistake that can damage your organisation’s reputation and financial health. Consider consulting with tax experts or utilising specialised payroll services to ensure compliance and maintain accurate payroll records.
Investing resources and time to understand tax laws can help you overcome issues with tax and payroll in Saudi Arabia. Our team can recommend solutions and practices to help improve the accuracy of your tax calculations.
Mistake #5: Not having benefits and social security
As an employer in Saudi Arabia, you are obligated to contribute to the social security scheme and provide specific employee benefits. Failure to comply can lead to legal penalties and decreased employee morale.
Be sure to maintain detailed records of employee contributions and employer contributions. You also need to regularly assess your benefits package to align with industry standards and employee needs.
If you’re unsure about your organisation’s compliance with social security regulations and benefits requirements, our payroll services in Saudi Arabia can provide expert guidance and support. We will thoroughly review your current practices and offer recommendations to optimise your HR processes and ensure employee well-being.
Save yourself from payroll mistakes
Let our team at NADIA Global streamline your payroll process with our tailored solutions. Our payroll services in Saudi Arabia will ensure your compliance with changing labour laws and tax regulations, saving you time and minimising administrative burdens. More importantly, we will ensure timely and accurate payouts to your employees. Contact us here or call +966 54 628 2781 so we can get started.
