What is Wage Protection System (WPS)?
The Wage Protection System (WPS) is a Saudi regulatory framework requiring all employers to pay employee salaries through licensed local banks in a standardized electronic format. WPS data flows to the Ministry of Human Resources and Social Development (MHRSD), which compares paid amounts to contracted salaries to detect underpayment, delayed payment, or non-payment.
How It Works
- HR generates a Salary Information File (SIF) at the end of each pay period.
- Upload the SIF to a WPS-approved bank.
- Bank disburses funds to employee accounts.
- Bank reports payment data to MHRSD through WPS.
- MHRSD compares paid amounts to contracted amounts and flags discrepancies.
Saudi Context
WPS is mandatory for all establishments with employees. Non-compliance leads to MHRSD penalties, suspension of services such as visa issuance and renewals, and downgrades in Nitaqat Saudization ratings. Wages must be transferred no later than three days after the end of the pay period. Qoyod’s payroll module generates WPS-compliant SIF files automatically.
Example
A trading company with 25 employees runs December payroll on 31 December. HR exports the SIF file from Qoyod, uploads it to its WPS bank by 1 January, and the bank disburses salaries the same day and reports the data to MHRSD within 24 hours, maintaining the company’s WPS compliance score.