Saudi Arabia Sets Minimum Salary at 5,000 Riyals; Kuwait Introduces New Wage Payment System

Saudi Arabia’s King Salman bin Abdulaziz has ordered that the minimum monthly salary for Saudi employees in the private sector be set at 5,000 riyals and that citizens receive an additional monthly financial allowance of 500 riyals. According to the Saudi Press Agency (SPA), these measures were approved on the recommendation of Crown Prince and Prime Minister Mohammed bin Salman to protect citizens from the financial impact of changes to electricity and water tariffs. The new electricity and water rates will take effect on January 1, 2027.

Under the order, the minimum monthly salary for Saudi employees working in private-sector establishments under the Nitaqat program will be set at 5,000 Saudi riyals for them to count fully toward the required Saudization rate. The measure will take effect in six months. Twelve months after the initial increase, the minimum salary will be raised to 6,000 riyals.

The financial assistance package also includes an additional monthly allowance of 500 riyals for government employees, military personnel and individuals covered by relevant employment programmes. Retired people and the families of deceased or retired employees covered by the social insurance system will also receive an additional 500 riyals per month.

Families benefiting from the social security system will likewise receive an additional monthly payment of 500 riyals, subject to the applicable rules and regulations. According to Saudi authorities, raising the minimum salary under the Nitaqat programme is intended to increase wages for Saudi employees in the private sector and make their employment more sustainable. The additional financial assistance aims to ease the financial pressure on citizens resulting from changes in electricity and water tariffs.

Meanwhile, Kuwait has tightened oversight to ensure that employees receive their salaries on time. Problems related to wage payments have been identified in the files of 8,849 employers. The government has introduced a new electronic system to monitor salary payments, while deductions from an employee’s monthly salary will be limited to no more than 25 percent.

The new electronic system will track when a company submits a salary payment request, how the bank verifies employees’ records and whether the money reaches their accounts. The process will consist of eight stages. First, the company will submit a request to pay salaries. The Central Bank and the relevant banks will then verify employees’ details. Once the information has been confirmed, the salaries will be paid, and an electronic payment report will be sent to the relevant authority. Officials say the system will make it easier to check salary payment records and reduce paperwork between banks. It will also help authorities identify which employees have received their salaries and where payment problems remain unresolved.

Kuwait’s Public Authority for Manpower (PAM) has also clarified that companies cannot deduct money from employees’ salaries at their own discretion. Thirteen valid grounds for deductions have been specified, including unpaid leave, sick leave, childcare leave, suspension from work, leaving the workplace without permission, refusing to work and absenteeism.

However, companies must provide evidence explaining why a deduction was made and demonstrating that it is legally justified. Under the rules, deductions may not exceed 25 percent of an employee’s monthly salary. Deductions above this limit are prohibited, and the required documentation must be provided even when the deduction falls within the permitted limit. The aim of the system in Kuwait is to ensure that employees receive their wages on time and that companies comply with the law. Through electronic monitoring, authorities will be able to review salary payment records and identify cases where problems arise.