Saudi Arabia raises minimum wage for 40.6% of citizens in private sector to 4,000 riyals

Abu Dhabi: The announced minimum wage raise of 33 per cent will benefit 715,400 Saudis, out of the 1,759,558 working in the private sector. Saudi Arabia has said it will raise the minimum wage for its citizens from 3,000 riyals ($800) to 4,000 riyals ($1,066 or Dh3917.45), the Kingdom’s Ministry of Human Resources and Social Development announced on Wednesday.

The move will come into effect five months from Wednesday, the ministry added without setting a specific date. Official statistics obtained by Al Watan newspaper showed that 24,687 Saudis or 1.4% of citizens are employed in the private sector, and draw a monthly salary of SR1,500, while 30,216 or 1.7% receive between 1,501 and 2,999 riyals.

The take-home income is 3,000 riyals for 660,497 Saudis or 37.5% of citizens employed in private firms, the statistics showed. According to the new law, if a Saudi receives a monthly salary below the new minimum wage, the employee will not be counted as part of the company’s designated quota of national employees, according to the ministry.

Saudi Arabian employees who receive a salary between 3,000 riyals and 4,000 riyals will also be counted as half of a 'citizen worker' in the quota count, the ministry said. The new ministerial decision also applies to students who are employed part-time, other part-time employees, and those who work flexible working hours.

The move is in line with the aim to attract more Saudi Arabian citizens to the private sector as well as to ensure their rights are met.

Data showed 264,444 low-income Saudis or 37% of citizens employed in the private sector were in Riyadh, while 106,144 or 14.8% were in Jeddah.