Calculating your net salary is an important task that employees perform on a monthly basis after deducting insurance, bank-related expenses, and other deductions. Insurance is a fundamental component of providing protection for employees in the event of an injury. In the following article, we'll explain the answer to the question, "How do I calculate my net salary after insurance?" and learn the correct method.

How can I calculate my net salary after deducting social insurance?

There is a way to calculate the net salary after deducting social insurance. This is done through several steps, the most important of which are:

• Calculate your total salary with all the benefits you receive.
• To calculate the discount, you must determine your salary and then multiply the amount by the insurance percentage, which can be 9% in the Kingdom.
• Then deduct the discount value from your total salary.

What is the percentage of social insurance deduction from salary in Saudi Arabia?

The percentage of salary deductions in Saudi Arabia varies slightly depending on the insurance and salary, and also depending on the difference between the Saudi employee and the foreigner:

For Saudi employees, 9.75% of their salary is deducted and divided into:

9% is the portion deducted from the employee’s share of the pension branch.

0.75% is the employee's portion of the unemployment branch.

Foreign worker: No money is deducted from the foreign worker's salary, as the employer bears the insurance deductions.

How are allowances calculated and how do they affect net salary?

There are many ways to calculate allowances and understand their clear impact on an employee's salary. Allowances can be calculated by calculating the basic salary agreed upon in the employment contract, adding to it allowances for housing, transportation, overtime, and nature of work, in addition to bonuses the individual receives.

To calculate the combined allowances, they can be added together and the basic salary subtracted from them.

There is a clear impact of allowances on the basic salary of the individual:

• It is one of the basic things that increases the net salary and increases the basic income of the individual.
• The allowances help cover his expenses.
• Allowances have a positive impact on the tax and insurance calculations that are deducted from the salary.

Is the method of calculating net salary different for Saudi and non-Saudi employees?

Yes, there are many differences in calculating the net salary of Saudi employees and foreign employees:

The common factors between the salaries of Saudi and foreign employees are:

• The amount of the agreed-upon basic salary without any special or additional benefits, and it varies depending on the individual’s qualifications and experience.
• Allowances and bonuses that an individual receives are added to the salary.
• Deductions from the basic salary in addition to social insurance.

The differences between the salaries of Saudi and foreign employees are:

• minimum wagePrivate business owners in the Kingdom of Saudi Arabia are required to set the minimum wage for Saudi workers at 4000 Saudi Riyals, but the minimum wage for non-Saudis is lower.
• Discounts 9.75% is deducted from the salary of a Saudi employee, but no deduction is made from the salary of a non-Saudi employee.

What documents are required for an accurate calculation of the salary after insurance?

There are some important documents for accurately calculating the salary after deducting social insurance. The most important of these documents are:

• Statement of the basic value of the salary received by an individual.
• All attendance records and papers that show the number of days and hours an individual works.
• Divorce papers or marriage contract, depending on the worker’s status.
• If there are any papers related to death cases or medical reports that change the insurance.
• Educational certificates, which are used to determine an individual's qualifications and financial status, in order to determine the amount he should receive.
• A certificate from the Social Insurance Institution stating the subscriber’s periods and wages.
• A certificate of contributory wages provides all details of an individual's wages in order to calculate the amount correctly.

Are there free online calculators to calculate net salary?

yesThere are many tools and programs that help calculate net salary for free, such as:

• Some companies offer free payroll software as part of their services to attract customers. Examples of these programs include ADP, Restrictions, and OnPay.
• There are some specialized online tools that are used to calculate salaries and offer many additional features related to retirement and savings. Examples include: ADP
• There are also some financial management software and accounting systems such as the percentage calculator offered by Wafeq.

Frequently asked questions about how to calculate my net salary after insurance

How do I calculate health insurance from my salary?

Medical insurance is calculated by multiplying the salary allocated for insurance by the percentage due from the relevant authority, which is 9.75%.

Does years of experience affect deduction rates?

No, the number of years of experience does not directly affect the percentage of insurance deductions that are deducted from the salary. However, experience affects the basic salary amount. Therefore, the final return received by an individual with many years of experience is higher than that of an individual with little experience.

What is the difference between gross salary and net salary?

There are some differences between gross salary and net salary:

Total salaryIt is the sum of all basic salary, allowances and bonuses that the individual receives.

Net salary: It is the remaining amount after deductions, insurances, and taxes are deducted from the total salary that an individual receives.

How does the new Saudi labor system affect salary calculations?

There are not many differences in the new Saudi labor system regarding salary, as insurance and deductions are calculated according to the Saudi labor system and social insurance regulations.