Saudization of ICT Professions: Decree 28889 and 25% Per Functional Group

The Saudization of ICT professions is set by ministerial decision number 28889, whose recorded date is 18/2/1442 AH · 5 October 2020. This decree sets its percentage for each functional group separately, and there are three groups. So Saudization in the IT sector under this decree is three numbers, not one.

This guide reads what this decree provides and nothing else: its three groups and their percentage, its scope threshold, the exception stated in it, its three wage floors and its dates. The architecture the localisation decrees share belongs in profession Saudization decrees and how they differ from Nitaqat. What the Nitaqat programme requires is a different number, read from its own reference, and estimating it is the job of the Nitaqat calculator.

1. Scope of application: 5 workers or more within a single group

The scope of application in decision 28889, in its wording, covers all private-sector establishments operating in the Saudi market that employ 5 workers or more within a single group, with the calculation at entity level.

The decisive phrase is “within a single group”. The threshold is not on the total of your workers in ICT professions, and it is not on the establishment’s total headcount. It is on each functional group taken on its own.

2. The three groups, and 25% for each group separately

The percentage set in the decision is 25% for each functional group separately, and the groups named in it are three:

• Telecommunications and information technology engineering
• Application development, programming and analysis
• Technical support and assistance

The decision sets the percentage for each group on its own. It follows that reading a single percentage across the three groups combined is not reading what the decision provides: an establishment that reaches 25% in one group may not reach it in another, and the decision states its percentage per group rather than for their total. Describing any particular situation as a breach is a matter to be referred to the statutory text and the competent authority.

The naming of the professions inside each group is read from the table of targeted professions in the decree’s procedural guide, and the profession tables in these decrees rest on the Saudi Unified Classification of Occupations. This guide did not establish an enumeration of the professions falling inside each of the three groups.

3. A group with 4 workers or fewer

The decision provides that the percentage is not applied to a group in whose professions the number of workers is 4 or fewer.

This is a second way in which the group is the unit of reading: an establishment may be inside the decree through one group and outside the application of the percentage through another group at the same time, because the count in each group is independent of the count in the others.

4. The exception stated in the decree: small establishments

The scope of application states an exception in its own words: small establishments operating in the telecommunications and information technology activity, or in the activities in its value chain, are excepted.

This guide did not establish the definition of the small establishment intended in this decree, nor an enumeration of the activities in the value chain. Both are matters to be referred to the decree’s procedural guide and the competent authority, and no particular establishment is described here as falling inside the exception or outside it.

5. Wage floors: three floors, one per group

The wage floor in the localisation decrees is a counting condition, not a minimum wage: a Saudi whose wage falls below the floor does not enter the calculation of the percentage. The measure is the contribution wage registered with the General Organization for Social Insurance, not the basic wage and not the total wage in the contract. Its components are set out in the contribution wage at GOSI.

Decision 28889 carries three floors, one for each of its groups:

So a Saudi in a technical support and assistance profession whose contribution wage is SAR 6,000 reaches his group’s floor, and a Saudi on the same wage in an application development profession does not reach his. The floor is read by the worker’s group, not by the decree as a whole.

6. The level of measurement: the entity

The calculation in this decree is at entity level. The entity in these decrees is the capacity the ministry deals with for the purposes of calculating localisation, representing all branches in the same economic activity owned by a single establishment.

So a branch is not read on its own, and the functional group is read across the entity rather than at each branch separately.

7. The date and the grace period

The recorded date of decision 28889 is 18/2/1442 AH · 5 October 2020. Its grace period is 9 months, ending on 17/11/1442 AH · 27 June 2021.

The dates here are carried as the sources read print them, in both calendars, with no conversion between them in either direction. The grace period in this family of decrees is the period between the date of publication of the ministerial decision and the date of its application and enforcement.

8. What the percentage is calculated on inside the group

This is the place that needs care. What this guide established about decision 28889 is three things: that the percentage is 25% for each functional group separately, that the scope threshold is 5 workers or more within a single group, and that the percentage is not applied to a group with 4 workers or fewer. So the unit of calculation in the decision’s text is the functional group.

As for an express formulation of the denominator, meaning the number the percentage is divided over inside the group, this guide did not establish it for this decree. The general rule established in the cross-cutting decrees, that the denominator is the workers in the targeted professions, was read from the guides of other decrees: marketing, sales, procurement, engineering, technical engineering, accounting, administrative support and project management. This decree is not among them, and its unit of calculation is the group rather than the decree, so another decree’s formulation of a denominator is not carried over to it. The denominator inside each group is read from the procedural guide to decision 28889 itself.

The same applies to the rule rounding the fraction to a whole worker: the marketing, sales and procurement guides state it, and this guide did not establish its wording in the guide to decision 28889.

9. Breach: the schedule referred to

The trigger for breach as stated in the guides is two things: failing to reach the required percentage, or assigning any task belonging to a localised profession to a non-Saudi directly or indirectly under any other job title.

The amount is not published here. Decision 28889 refers to the schedule of violations and penalties in decisions 75913 and 44558, while the schedule page published by the ministry today carries decision 112377 alone. The relationship between the reference and the published schedule was not found in any source for this guide, so no fine amount is attributed to this decree.

What this guide does not settle

• The formulation of the denominator inside the functional group in decision 28889, as set out in section 8.
• An enumeration of the professions falling inside each of the three groups.
• The definition of the small establishment in the exception stated in the decree, and an enumeration of the activities in the value chain.
• The rule for rounding the fraction in this decree’s guide.
• The predecessor decision that decision 28889 updates, if its preamble names one.
• Professional accreditation: whether it is required in the professions of these groups, and on what conditions.
• The fine amount arising from breach of this decree, and what becomes of the reference to the two older schedules.

Each of these is a matter to be referred to the decree’s procedural guide and the competent authority.

What your system should record

The number the ministry sees is read from the GOSI registration, not from your file. So what is useful to hold in your own employee file is whatever you can reconcile against that registration:

• The functional group each of your workers in ICT professions falls into, among the three groups.
• The occupational title registered with GOSI for every worker, and its code in the Saudi Unified Classification of Occupations.
• The number of workers in each group separately, not their total across the three.
• The contribution wage for every Saudi, referred to his own group’s floor: SAR 7,000, SAR 7,000 or SAR 5,000.
• The branches inside the entity: which are in the same economic activity and which are outside it.

Checklist

• Did you distribute your workers in ICT professions across the three groups, or do you read them as a single number?
• Do you know which of your groups reached 5 workers or more, and which stand at 4 or fewer?
• Are you reading the 25% in each group separately?
• Does the contribution wage of each Saudi reach his own group’s floor, rather than another group’s?
• Do the titles registered with GOSI match the group you are counting the worker in?
• Do you know which of your branches sits inside the single entity and which sits outside it?
• Did you read the denominator inside each group from this decree’s procedural guide, rather than from another decree’s guide?

Why this turns into a problem

A decree that sets three percentages gets read in the files as one. The establishment gathers its workers in ICT professions into a single column, divides, and comes out with a number that looks reassuring. That number is not the number the decision sets, because the decision sets its percentage for each group separately.

Some sources of error are not revealed by the total. One is the threshold: a group with 6 workers is inside the scope, a group with 4 does not have the percentage applied to it, and both numbers dissolve into the total so neither is read. Another is the wage: a Saudi in application development on a contribution wage of SAR 6,000 is inside the percentage on your file and below his group’s floor in the calculation, while the same wage in technical support and assistance reaches the floor. Another is borrowing one decree’s rule for another: a denominator or a rounding rule read from the marketing or engineering guide applied here, when that is not this decree’s guide. Characterising any particular case is a matter to be referred to the statutory text and the competent authority.

This is where having the facts of an employee in a single file starts to pay. That is what Qoyod HR provides: one employee file holding the contract, the documents and their expiry dates with a reminder before them, an attendance record for every employee, his leave, his salary and his end-of-service entitlements. End-of-service, overtime and leave-balance calculations are built into the system. It is a standalone HR system on its own subscription, and the connection to Qoyod Accounting is now available.

For more guides and templates, browse the HR resource centre.

Frequently asked questions

What is the Saudization percentage for ICT professions in decree 28889?

The percentage set in decision 28889 is 25% for each functional group separately, and the groups are three: telecommunications and information technology engineering; application development, programming and analysis; and technical support and assistance. The decision sets its percentage for each group on its own, and does not set a single number across the three groups combined.

Which establishments does the ICT professions Saudization decree apply to?

The scope of application in decision 28889 covers all private-sector establishments operating in the Saudi market that employ 5 workers or more within a single group, with the calculation at entity level. The decision states an exception: small establishments operating in the telecommunications and information technology activity, or in the activities in its value chain, are excepted. This guide did not establish the definition of the small establishment intended here, nor an enumeration of the value-chain activities.

What if a functional group has 4 workers or fewer?

Decision 28889 provides that the percentage is not applied to a group in whose professions the number of workers is 4 or fewer. The threshold is read for each group separately, not on the total of the establishment’s workers in ICT professions.

What is the wage floor in the ICT professions Saudization decree?

Decision 28889 carries three floors, one per group: SAR 7,000 for telecommunications and information technology engineering, SAR 7,000 for application development, programming and analysis, and SAR 5,000 for technical support and assistance. This floor is a counting condition, not a minimum wage: a Saudi whose contribution wage registered with the General Organization for Social Insurance falls below his group’s floor does not enter the calculation of the percentage.

When was decree 28889 issued and when did its grace period end?

The recorded date of decision 28889 is 18/2/1442 AH · 5 October 2020, and its grace period is 9 months, ending on 17/11/1442 AH · 27 June 2021. The dates here are carried as the sources read print them, with no conversion between the two calendars.

What follows from breaching the ICT professions Saudization decree?

The trigger for breach as stated in the guides is failing to reach the required percentage, or assigning any task belonging to a localised profession to a non-Saudi directly or indirectly under any other job title. The amount of the fine is not published here: decision 28889 refers to the schedule of violations and penalties in decisions 75913 and 44558, while the schedule page published by the ministry today carries decision 112377 alone, and the relationship between the reference and the published schedule was not found in any source for this guide.

Statutory references

This guide rests on ministerial decision number 28889 and its procedural guide, both published by the Ministry of Human Resources and Social Development, and on the schedule of violations and penalties page published by the ministry, for the fact that the schedule carried there today is decision 112377.

Dates are taken from the sources without conversion in either direction, in both calendars where both exist. Hijri dates are printed as the sources print them; Gregorian dates are written out in full. No percentage not read from this decree’s guide is published here, no fine amount attributed to it, and no profession assigned to any particular one of its three groups. Decrees that are updated from year to year should have their dates re-checked from their page at the ministry before anything is built on them.

Subjects that border this decree and are not settled on this page: registration with the General Organization for Social Insurance, and the contributions recorded against a worker under it; the contribution rates applied to a registered wage; and the Saudi Standard Classification of Occupations, from which the profession codes are drawn. None of these is read from this decree’s guide, and none of them is a source for the localisation percentage stated here.

This guide is a regulatory explanation and not legal advice. In a live dispute or a particular case, the statutory text and the competent authority remain the reference.