Salaries in the Kingdom rise through several mechanisms that differ between the government and private sectors: the annual periodic increment, promotion to a higher grade or rank, and discretionary raises in the private sector. This guide explains each mechanism and shows how to compute the actual raise in your net pay, not just gross.
In this guide
1. How salaries increase in Saudi Arabia
- Annual periodic increment: an automatic fixed rise in the government sector on completing a year in a step.
- Promotion: moving to a higher grade or rank that ensures an actual raise on basic pay.
- Discretionary raise: in the private sector, based on performance and company policy.
- Allowance or title change: adjusting housing allowance or moving to a higher title.
2. The annual periodic increment
In the government sector, the annual increment is granted automatically on completing a full year in a step, moving the employee to the next step within their grade. Its value varies by scale and grade:
- Grade 1 of the general scale: SAR 135.
- Lieutenant on the officers scale: about SAR 380.
- Consultant physician on the health scale: about SAR 690.
See the increment value per grade and step in the salary scales.
3. Raises via promotion
Promotion moves an employee to a higher grade (on the general scale) or a higher professional rank (on scales like teachers and health), requiring experience, qualification, and a vacancy. Promotion usually gives a larger raise than the annual increment, as the employee moves to the first step of the higher grade that guarantees an actual increase.
4. Private-sector raises
The Labor Law sets no uniform annual raise for the private sector; it is governed by company policy and performance reviews. Annual raises typically range from 3% to 8%, and can be higher on promotion or changing employer. It is best to negotiate based on net salary and the full package, not basic pay alone.
5. How to calculate the raise percentage
Raise % = ((new salary − old salary) ÷ old salary) × 100
Example: old SAR 10,000, new SAR 11,500 → ((11,500 − 10,000) ÷ 10,000) × 100 = 15%.
6. Gross raise vs net raise
When comparing a new offer or estimating the effect of a raise, remember that part of the rise on basic and housing is subject to the GOSI deduction (9.75%) for Saudis, so the increase in net pay is slightly smaller than the gross increase. Compare net to net with the salary calculator, and see the deduction details in the GOSI guide.
Frequently Asked Questions
How much is the annual increment for a government employee?
The annual increment varies by scale and grade: it starts at SAR 135 in Grade 1 of the general scale, about SAR 380 for a Lieutenant on the officers scale, and around SAR 690 for a consultant physician. It is granted automatically on completing a year in a step.
When is the annual increment paid?
The periodic increment is granted automatically to an eligible employee on completing a full year in their current step (absent material performance issues), moving them to the next step within the same grade.
What is the typical annual raise in the private sector?
There is no fixed statutory raise in the private sector; it depends on company policy and performance, typically ranging from 3% to 8% per year, and can be higher on promotion or job change.
How do I calculate my raise percentage?
Use: Raise % = ((new salary − old salary) ÷ old salary) × 100. Example: from SAR 10,000 to 11,500 = a 15% raise.
Why is the net raise smaller than the gross raise?
Because part of the raise on basic salary and housing is subject to the GOSI deduction (9.75%) for Saudi employees. So always compare new net to old net, not gross.
Official sources
The figures and rules on this page are based on the following official references:
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