As per the Labor Law in effect in the Kingdom of Saudi Arabia, the Ministry of Human Resources and Social Development has clarified the method for calculating annual leave entitlements.
Some of the workers had wondered whether the annual leave entitlements are calculated based on only the basic salary or if it is based on the salary including housing and transportation.
It was confirmed by the Ministry that the annual leave wage is calculated based on the actual wage, which includes all allowances, in accordance with the definition of wages in Article 2 of the Saudi Labor Law.
Basic Wage definition in Article 2 of Saudi Labor Law :
Any payment made to an employee for his work pursuant to a written or unwritten work contract regardless of wage type or payment method, as well as periodic increases.
Actual Wage definition in Article 2 of Saudi Labor Law :
For the worker, the basic wage plus all other increments are determined by the effort he applies at work or by the risks he encounters in performing the work, or by those determined by the work contract or work organization regulation.
1. Commissions or percentages of sales or profits paid against what an employee markets, produces, collects or realizes from increased or enhanced production.
2. The amount the worker is entitled to as a result of exerted effort, or the risks he encounters while performing his job.
3. Amounts that may be granted in accordance with the standard of living or to meet family expenditures.
4. Grant to Reward : What the employer grants to the worker and what he pays to him for honesty and efficiency, if such an award is stipulated in the work contract or the work organization regulation of the firm or if it is customarily granted to the extent to which the workers consider it part of the wage rather than a contribution to the firm.
5. In rem privileges : Worker's compensation is what the employer commits himself to provide by stating in the work contract or the work organization regulation and it is estimated at a maximum of 2 months basic wage per annum unless it is otherwise determined to exceed that in the work contract or the work organization regulation.
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SOURCE : SAUDI EXPATRIATES
