Setting up GOSI and WPS payroll in an ERP: a practical guide

Define components explicitly: basic salary, housing allowance, transport allowance, other allowances, overtime, deductions and loans. GOSI contributions are calculated on the components the regulations include, typically basic plus housing within the applicable ceiling, so components must be flagged as contributory or not. End-of-service is calculated on the wage as defined by the Labour Law, which again depends on how components are classified. Decide these classifications with your advisers once, and configure them once.

Every calculation reads from the employee record: nationality drives the GOSI rule set; the GOSI subscription number, national ID or iqama number and bank IBAN go into the WPS file; contract start date drives end-of-service; the contract type affects termination calculations. Import employees from the previous system or spreadsheet, then validate: no missing IBANs, no expired iqamas, no employees without a nationality. The system should refuse to run payroll for an incomplete record rather than skip it.

Configure separate rule sets for Saudi and non-Saudi employees, with employee and employer shares, the contributory base and the ceiling, effective-dated so rate changes can be entered in advance. If the recent reforms for new entrants apply to any of your staff, model them as their own rule set with the dates that apply. Test with one employee of each type against a manual calculation before running the company.

Each bank accepts a specific file layout for the Wage Protection System. Configure the layout for your bank, map the fields from the payroll result, and run a test file for a handful of employees through the bank's validation before month-end. Include every employee the regulations require, with the correct salary, deductions and days worked. Keep generated files with the payroll run so the audit trail is complete.

Configure the accrual according to the Labour Law schedule, half a month's wage per year for the first five years and a full month per year thereafter, with the reductions that apply on resignation by length of service, and post the accrual monthly so the liability is on the balance sheet rather than discovered on exit. Confirm the treatment of unpaid leave and partial years with your advisers.

Run the new system in parallel for one payroll, reconcile every line, and only then switch. Differences are usually component classification or a missing employee field, both cheap to fix before go-live and expensive after.