What the gender pay gap is
The gender pay gap (فجوة الأجور بين الجنسين), also called the gender wage gap, is a statistical measure of the difference between men’s pay and women’s pay within one population, expressed as a proportion of men’s pay. It is calculated across the whole group, without holding role, grade or years of experience constant.
The definition already marks where it stops. The gap describes a distribution; it does not pass judgement on a decision. It says that two groups in an establishment or a market sit at different levels of pay, and it does not say why. An error about the gender pay gap can begin by turning the description into a verdict in a single step that nobody writes down.
How the gender pay gap is calculated, and why the measure changes the figure
The formula fits on one line: (men’s pay minus women’s pay) ÷ men’s pay × 100. The whole disagreement lies in what “pay” means here. It can be the median, the value with half the group above it and half below it, or it can be the arithmetic mean.
Take an establishment with six men and six women:
| Group | Monthly pay (SAR) | Median (SAR) | Mean (SAR) |
|---|---|---|---|
| Men | 8,000 · 9,000 · 10,000 · 11,000 · 12,000 · 40,000 | 10,500 | 15,000 |
| Women | 8,000 · 9,000 · 10,000 · 11,000 · 12,000 · 13,000 | 10,500 | 10,500 |
Measured on the median, the gap is zero. Measured on the mean, it is (15,000 minus 10,500) ÷ 15,000 = 30%. The data are the same in both cases. The whole difference comes from one high wage, which lifts the mean and leaves the median where it was. For that reason a gap figure is not passed on without its measure, and two figures calculated on different measures are not compared with each other.
The unadjusted and adjusted gender pay gap answer different questions
The unadjusted gap is calculated on the group as it stands. The adjusted gap is calculated after holding stated factors constant: grade, role and time in the role. They are not two levels of precision for one question. They answer two different questions.
Take an establishment with two grades, in which pay within each grade is identical for men and women:
| Grade | Monthly pay (SAR) | Men | Women |
|---|---|---|---|
| Grade two | 20,000 | 40 | 10 |
| Grade one | 8,000 | 10 | 40 |
Men’s mean pay is (40 × 20,000 + 10 × 8,000) ÷ 50 = SAR 17,600. Women’s mean pay is (10 × 20,000 + 40 × 8,000) ÷ 50 = SAR 10,400. The unadjusted gap is (17,600 minus 10,400) ÷ 17,600 = 40.9%. The gap adjusted for grade is zero, because everyone in grade two is paid SAR 20,000 and everyone in grade one is paid SAR 8,000.
It would be wrong to describe this establishment as having “no gap”, and equally wrong to say that it “pays women less for the same work”. Both figures are correct at once, and they say two different things. The first says that women are distributed towards the lower grade; the second says that pricing within each grade is identical. Anyone who wants to close the first gap has to work on promotion, grade placement and selection, not on the pay scale. Anyone who reads the second figure as an acquittal has closed a file that was never opened.
The gender pay gap and the Saudi Labor Law
The provision connected to this subject is Article 61 of the Saudi Labor Law (نظام العمل), in the part setting out the duties of employers towards all their workers. Its fourth item was added to Article 61 of the Labor Law by Royal Decree No. M/44 dated 8/2/1446H, in force from 19 February 2025. The exact wording carries the point, so it is given in Arabic, as it appears in the consolidated text published by the Ministry of Human Resources and Social Development:
«أن يمتنع عن القيام بكل ما من شأنه إبطال أو إضعاف تطبيق تكافؤ الفرص أو المعاملة في الاستخدام والمهنة، سواء من خلال الاستبعاد أو التفريق أو التفضيل بين المتقدمين للعمل أو العاملين لديه على أساس العرق أو اللون أو الجنس أو السن أو الإعاقة أو الحالة الاجتماعية أو أي شكل من أشكال التمييز الأخرى.»
In our own rendering, which is not an official translation, the item requires the employer to refrain from anything that would nullify or weaken equality of opportunity or treatment in employment and occupation, whether through exclusion, differentiation or preference between applicants for work or the employer’s workers, on the basis of race, colour, sex, age, disability, marital status or any other form of discrimination.
Three features of the item govern how it relates to the measure:
- Its subject is conduct. The item reaches anything that would nullify or weaken equality of opportunity or treatment. What it is measured against is an act in a decision, not a ratio in a report.
- Its scope is employment and occupation as a whole, not pay alone. Reading the item as a rule about pay narrows it, and reading it as a rule about hiring alone narrows it from the other side. It covers applicants for work as well as the employer’s workers.
- Its grounds are listed and then left open. The item names race, colour, sex, age, disability and marital status, and then adds any other form of discrimination. Sex is one of six named grounds, and the list does not stop there.
The item sits among the employer’s duties towards all workers, not in the chapter of the Labor Law on the employment of women. It is a general duty, and sex is one of the grounds it lists. Its application to age is set out in our glossary entry on ageism.
Pay is named expressly in a different instrument. Row 22 of the Schedule of Violations and Penalties (جدول المخالفات والعقوبات), issued by Ministerial Decision No. 112377 dated 21/8/1447H (9 February 2026), lists discrimination in any form, including discrimination in pay between men and women for work of equal value. The Schedule classes that violation as grave, sets its fine in three amounts according to the size of the establishment, and multiplies the fine by the number of cases. The same row is discussed in our entry on distributive justice, and its three amounts are set out in the entry on ageism.
The consequence is that a gender pay gap is not evidence of a violation, and the absence of a gap is not evidence of compliance. The establishment in the example above shows 40.9% while its pricing within each grade is identical. Another establishment may show zero while its violation lies in a single exclusion decision that moves no average at all. The measure points the question in a direction, but it does not answer it.
In the sources we reviewed, we found no provision that places on private sector establishments an obligation to disclose or report their gender pay gap. We do not conclude from that absence that the question is closed.
The gender pay gap moves with decisions that are not pricing decisions
This is what can confuse anyone who follows the figure from one year to the next. The gap can change through four movements, and none of them is an increase or a cut in anyone’s pay:
- Hiring. An establishment that opens wide recruitment in its lower grades, and hires a higher proportion of women into them, sees its unadjusted gap widen in the same year that women’s participation rises. The figure gets worse while the situation does not.
- Promotion. In the fifty person example above, promoting one woman from grade one to grade two moves SAR 12,000 from the lower end to the upper end. Women’s mean pay rises to SAR 10,640 and the gap narrows from 40.9% to 39.5%, by 1.4 points, through one movement involving one person.
- Departures. A woman leaving grade two widens the gap, to 42.0% in the same example; a man leaving grade two narrows it, to 40.7%. The establishment does not control the timing of either.
- Reclassification. Moving a role from one grade to another, for instance when it is placed again under job classification, changes how the two groups are spread across the scale without a single riyal changing in any payroll.
For that reason the difference between two years’ figures is not taken at face value. A sound analysis splits it into two parts: a part that comes from a change in how people are spread across the grades, and a part that comes from a change in pay within each grade. If the second part is zero, the whole movement is compositional, and the work on it is work on selection and promotion. If the second part is positive and visible, the matter has moved to pay equity and to an examination of the cases one by one.
Publishing the aggregate figure without that split publishes a number driven by four forces and attributes its movement to one of them.
What the gender pay gap is not
- Pay equity (عدالة الأجور). Its question is whether every difference has a reason connected to the work that can be stated and checked, and its output is a list of cases, each carrying an explanation or a correction plan. The output of the gender pay gap is one figure about a group. Pay equity works on individuals; the gap describes the aggregate.
- The comparable wage (أجر المثل). It is a gap filling rule in Article 95 of the Labor Law, applied where neither the contract nor the work regulation (لائحة تنظيم العمل) states the wage at all. The gender pay gap is calculated on wages that have been set and paid.
- The skills gap (فجوة المهارات). The two share the word “gap” and nothing more. The skills gap measures the distance between a skill that is required and a skill that is available; the gender pay gap measures the distance between two levels of pay.
Who reads a gender pay gap figure, and in what form
There is one measure, but its output reaches three different readers, and each needs it in a different form:
- The pay committee. It needs the second part alone: whether there is a difference within a single grade, in which grade, and across how many cases. A single aggregate figure gives it nowhere to start work.
- Executive management. It needs the distribution of men and women across the grades, year after year, because that is the part that moves slowly and calls for decisions on selection and promotion rather than on the pay scale.
- Whoever writes a report for outside readers. They need to state four things alongside the percentage: the measure (median or mean), the pay base, the size of each group and the cutoff date. A percentage without those four is a number that cannot be compared with any other figure.
The working rule is to write the figure in a sentence that carries its conditions: “the median gap on actual pay, between 120 men and 95 women, at 31 December”. Written that way, the sentence comes out either correct or visibly incomplete, and both are safer than a bare figure open to any interpretation.
The same discipline applies to figures from outside the establishment. In the sources we reviewed, we found no official source that sets a national figure for the gender pay gap in the Saudi market, and a gap figure is not passed on without the body that published it, the year and the measure.
What spoils a gender pay gap measurement before it starts
- Mixing the pay base. A gap calculated on the basic wage (الأجر الأساسي) is not the same as a gap calculated on the actual wage (الأجر الفعلي). Article 2 of the Labor Law defines the actual wage as the basic wage plus other due increases, including commission and allowances due for effort expended or risk incurred in the work. An establishment whose commission is concentrated in one particular role shows two different gaps on the two bases.
- Calculating pay on actual hours without standardising it. Putting people who work full time and people who work part time into one average measures hours and calls the result pay.
- Small groups. In a category of three people, one departure can move the percentage by tens of points. The rule is to state the size of a group with its percentage every time.
Where measuring the gender pay gap begins
An establishment that sets out to measure its gender pay gap starts with two questions before it reaches any figure: which pay base it is measuring, and whether it holds a grade structure within which it can measure. Without the second, the unadjusted figure is the only figure it has, and it is the weaker of the two as a guide to what the establishment can change.
This is an explanation of the concept and of the statutory provisions cited, not legal advice.
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