Quick Summary
- SPS automatically monitors salary payments for all companies in Saudi Arabia
- Employers must pay salary through the banking system — not cash
- SPS violations are detected automatically — no complaint needed
- Penalties include work permit bans, business licence suspension and fines
- Employees of SPS-violating companies gain free sponsorship transfer rights
- You can check your company's SPS compliance status on the HRSD website
What Is the Salary Protection System?
The Salary Protection System — widely known as SPS — is an electronic wage monitoring system operated by the Ministry of Human Resources and Social Development (HRSD). It was introduced as part of Saudi Arabia's labour reform agenda to combat wage theft and ensure workers are paid correctly and on time.
The SPS works by requiring all companies to pay employee salaries through the Saudi banking system. When a salary payment is made, the bank reports the transaction data to HRSD automatically. If a payment is missing, late or below the contracted amount, the SPS flags it as a violation — without any employee needing to file a complaint.
How SPS Works — The Technical Process
Employer Registers Payroll Data
Companies registered with HRSD must maintain an accurate employee payroll register showing each employee's name, iqama number, salary amount and payment due date. This register is linked to the HRSD system.
Salary Paid Through Bank Transfer
When the employer pays salaries, the payment must go through the Saudi banking system via bank transfer. The bank automatically reports the payment data to HRSD — employee name, iqama number, amount and date.
SPS Compares Payroll vs Payment
The SPS system compares what the employer registered as due against what was actually paid. If salary is late, short or missing, the system automatically flags the company as non-compliant — no employee complaint needed.
Violation Triggers Automatic Penalties
Once flagged, the system automatically applies escalating penalties — starting with work permit restrictions and progressing to business licence suspension if violations persist or are not resolved.
What Triggers an SPS Violation?
| Violation Type | What It Means | Severity |
|---|---|---|
| Late Payment | Salary paid more than 7 days after due date | Moderate |
| Partial Payment | Less than contracted salary paid | Moderate |
| No Payment | Salary not paid at all for the month | Severe |
| Repeated Violations | Same violation occurring multiple months | Critical |
| Cash Payment Only | Salary paid in cash not through banking system | Moderate |
Penalties for SPS Violations
Penalties escalate based on the severity and duration of the violation. Here is how the penalty structure works:
Work Permit Ban
Company cannot issue new work permits or renew existing ones until violations are cleared.
Financial Fines
Escalating fines per employee affected by the salary violation each month it continues.
Iqama Renewal Block
Employees cannot renew iqamas until the employer resolves the salary violations.
Business Licence Risk
Persistent violations lead to suspension of the company's commercial registration.
Free Transfer Rights
Employees gain the right to transfer sponsorship without employer consent.
Personal Liability
Company owners can be held personally liable for systematic salary violations.
How SPS Gives YOU More Power as an Employee
The most important benefit of SPS for employees is that it gives you leverage and rights you would not otherwise have. When your employer has active SPS violations:
- Free sponsorship transfer — You can transfer your iqama to a new employer without your current employer's consent — even if you have been employed for less than 1 year
- Stronger HRSD complaint — An SPS violation on record means HRSD treats your complaint with higher urgency and the employer has less room to dispute your claim
- Article 81 resignation rights — Non-payment of salary for more than one month gives you the right to resign and still receive full EOSB as if terminated
- Priority processing — Cases involving SPS-violating employers are often fast-tracked through the HRSD complaint system
How to Check If Your Company Has SPS Violations
- Visit hrsd.gov.sa and look for the "Wage Protection" or "SPS" section
- You can also check through the Qiwa platform under your employment details
- If your company has violations, a flag will show in the system — this is public information for registered employees of that company
- Keep a record of any SPS violation status you find — it is useful evidence if you need to file a complaint or transfer sponsorship
SPS and Cash Salary Payments
Some smaller companies — particularly family businesses, small retail operations and some construction companies — pay salaries in cash rather than bank transfer. This creates problems under the SPS system:
- Cash payments are not recorded in the SPS system — from HRSD's perspective it looks like salary was not paid
- If you receive cash salary and need to prove payment for a future claim, you have very limited evidence — always get a signed payslip for cash payments
- Employers paying cash are technically in violation of the SPS requirement regardless of whether they actually paid the correct amount
- If your employer pays cash, request payment by bank transfer in writing — this protects both your evidence trail and activates SPS protection
Frequently Asked Questions
Does SPS apply to all companies in Saudi Arabia?
The SPS applies to all private sector companies registered with HRSD — which includes virtually all companies employing workers in Saudi Arabia. Government employees are on a separate payroll system. Small companies are not exempt.
My employer says they pay through a third-party payroll company. Does SPS still apply?
Yes. Whether the employer pays directly or through a payroll processing company, the payments must still flow through the Saudi banking system and be reported to HRSD. The SPS obligation rests with the employer regardless of how payroll is processed.
Can my employer fix an SPS violation after it is flagged?
Yes — by paying the outstanding salary immediately. Once payment is made and confirmed in the banking system, the violation is cleared. However fines for the violation period may still apply and employees who initiated transfers during the violation period retain those transfer rights.
I just found my company has SPS violations. What should I do right now?
First — document the violation status with a screenshot. Second — check your own salary payments to confirm whether you personally have been underpaid or not paid. Third — consider whether to transfer sponsorship using the free transfer right this gives you. Fourth — file an HRSD complaint if salary is owed to you.
Company Has SPS Violations — What Are Your Options?
SPS violations open specific rights for you as an employee. Book a consultation to understand exactly what those rights are in your situation and the best action to take — based on 20 years of Saudi Arabia experience.