Saudi Arabia’s Mudad Payroll Platform and Salary System Updates

Saudi Arabia’s updated payroll system under the Wage Protection Program and Mudad ensures timely, transparent, and fair salary payments for employees. Employers face stricter compliance rules, while workers gain benefits like flexible salary withdrawals and protection against delayed wages.

Saudi Arabia’s Ministry of Human Resources and Social Development (MHRSD) has updated its salary system under the Wage Protection Program and the Mudad payroll platform for private companies. The reforms focus is towards ensuring timely salary payments and accurate payroll records for employers. Businesses are now required to process wages digitally, so that concerns of employees gain more visibility, and they benefit from new options like flexible salary withdrawals.

Salary system updates under the Wage Protection Program

The new directive from MHRSD clarifies that assigning arbitrary wages, whether extremely low or excessively high, will immediately push alerts on the Mudad system. Such irregularities are automatically logged as violations in the employer’s compliance record. The Ministry’s intent, as per the directive, is to ensure fair wage practices and prevent manipulation of payroll data.

Other violations that will activate alerts are as follows:

• Salary deductions that exceed 50 percent of an employee’s wage;
• Failure to record the basic wage on the Mudad system for more than 90 days; and
• Omitting wage details from the required fields, withholding salaries, or maintaining no record of wage disbursement.

The MHRSD has also brought flexibility in wage withdrawal for employees. In July 2025, Mudad entered into a cooperation agreement with Khazna Financial Technology Company to launch the Flexible Salary feature. This service allows employees to access part of their earned wages before the official payday. Workers can withdraw a portion of their salary based on the number of days already worked in the month.

Penalties for delayed payroll file submissions

The revised framework also addresses delayed wage protection file submissions. If a company fails to upload wage data within 20 days of the due date, the Mudad platform automatically escalates the case.

The process follows this sequence:

• A reminder is sent on the due date;
• A second notification is issued after 10 days;
• A final warning follows on the 15th day; and
• If no action is taken within 20 days, the platform triggers an inspection request to the Ministry’s Inspection Department.

This step-by-step process gives employees a transparent mechanism to challenge or review explanations for delays.

Handling delayed salary payments

When a salary delay occurs, Mudad allows both the employer and employee to present their side. Employers have 10 days to justify the delay within the platform. Employees then have 3 days to either accept or reject the justification.

If the employee does not respond, the system automatically accepts the employer’s explanation. But the consequences can escalate, if salary delays continue, in the following manner:

• A two-month delay results in suspension of most government services, except for issuing and renewing work permits; and
• A delay of three months or more leads to complete suspension of all services. At this point, employees are legally entitled to transfer to a new employer without needing approval from their current company, even if their work permits remain valid.

What is Mudad?

Mudad is a digital payroll and compliance platform developed by the MHRSD to manage wage protection obligations across private companies. It was specifically designed to support small and medium-sized enterprises (SMEs), which form a large share of the Saudi economy.

The platform brings together payroll functions of businesses with requirements from the Ministry, the General Organization for Social Insurance (GOSI), and other financial institutions.

Registration and setup process

To use Mudad, companies must first complete a straightforward registration process:

• Account creation – Register on the Mudad portal with the company’s commercial registration (CR) number, business name, and contact details;
• Document submission – Upload the commercial registration certificate and an authorization letter signed by the company’s legal representative;
• Bank account linkage – Connect the corporate payroll account to the system to ensure wage payments are tracked; and
• Payroll settings – Enter employee details, salary structures, and other payroll data.

Once registration is complete and verified, employers can process monthly payroll, generate compliance reports, and respond to employee queries through the platform.

Payroll automation and compliance integration

Mudad’s payroll system provides automated calculations, which can eliminate manual errors and save company’s administrative time. The platform integrates directly with Saudi banking channels to ensure that salaries are transferred securely to employee accounts.

The system’s automation covers:

• Salary calculation and disbursement through banking channels;
• Batch processing for multiple employee payments; and
• Automated reminders and reporting for wage file submissions.

One of Mudad’s strengths is that it gives employees direct access to their payroll information. Workers can log in to review their salary details, deductions, and benefits at any time. The system also generates digital pay stubs and sends email notifications when payments are processed.

Integration with HR and financial systems

Mudad can be integrated with existing human resources (HR) and financial systems used by private companies. This integration allows for:

• Data synchronization between HR records and payroll information;
• Workflow automation for onboarding and employee updates; and
• Financial integration for accurate reconciliation of payroll data with accounting records.

In summary

Saudi Arabia’s recent salary system updates mark an important shift in how private-sector payroll is regulated. Employers are now expected to maintain right wage records and meet payroll deadlines. On the other hand, employees benefit from protections against wage delays.

The initiative also supports wider Vision 2030 objectives by promoting financial inclusion and attracting private-sector investment with improvements in labor governance.

Read more: How to Check Iqama Validity in Saudi Arabia

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