12% to 14%

• Social insurance tax for non-Saudi employees: 2%
• Social insurance tax for Saudi employees: 12%

‍

15%

• 22 February (Friday): Saudi Founding Day
• 9–13 April (Tuesday–Sunday): Eid al-Fitr
• 15 June (Saturday): Arafat Day
• 16–19 June (Sunday–Wednesday): Eid al-Adha
• 23 September (Monday): Saudi National Day

Note: these are estimated dates and are yet to be confirmed.

Employees can take 120 days of sick leave each year, but the percentage of their salary that they receive during that time is determined by the number of days that they take off sick:

• First 30 days: 100% of salary
• Days 31 to 90: 33% of salary
• Days 91 to 120: 0% of salary

The sick leave laws only apply to organizations with over 20 members of staff. All employees who take sick leave must provide medical certificates as proof.

Paid maternity leave is ten weeks, starting four weeks prior to the day on which the baby is due. Employees with at least one year’s service receive 50% of their salary. Employees with at least three years’ service receive 100% of their salary.

Paternity leave is for one day after the birth of the child.

The termination process is dependent on the type of contract, the reason for ending employment, the employment agreement, and/or any relevant collective agreements. If the employer cannot offer a valid reason for termination, they must pay compensation.

Notice periods are 30 days for monthly contracts or 15 days for any other type of contract.

Severance pay is set in law as half a month’s of the employee’s final salary for each of the first five years and one month’s salary for each subsequent year of service. Under certain conditions related to misconduct or absence, the severance payment is not mandatory.

Typical probationary periods are 90 days.

Saudi Arabia is experiencing a significant rise in remote work, transforming its traditional office culture. This growth is driven by a combination of factors:

• Tech Surge: Reliable internet connectivity and video conferencing tools are fueling a seamless remote work environment. The $15 billion investment in information and communication technology (ICT) infrastructure since 2017 exemplifies the government's commitment to this digital transformation. This robust infrastructure is crucial for the tertiary sectors that enable remote work to function smoothly.
• Employer Benefits: Companies are recognizing the advantages of remote work, including cost savings, access to a wider talent pool, and a more satisfied workforce. A prime example is Saudi Telecom Company (STC), a leading employer embracing remote work as a long-term strategy. 
• Government Push: The Saudi government actively promotes remote work through initiatives like infrastructure upgrades, telecommuting policy development, and flexible work arrangement incentives. For instance, in 2022, The Saudi Arabian Ministry of Human Resources and Social Development (MHRSD) approved the implementation of work-from-home policies in the public sector

Projected Growth: The Gulf Cooperation Council countries, which include Saudi Arabia, are projected to have a remote workforce exceeding 52%, with a growth rate of 35%. This trend holds promise for both businesses and employees, shaping the future of work in the kingdom.

Despite the surge in remote work, hiring remote employees in Saudi Arabia presents unique challenges. Here are some key complexities to consider:

• Work Permits and Visas: Saudi Arabia has a strict sponsorship system for foreign workers. To hire a remote worker who isn't a citizen, you'll need to sponsor their Iqama and navigate the application process. This can be time-consuming, involve significant paperwork, and come with additional costs.
• Legal and Regulatory Considerations: Labor laws and regulations might differ when employing someone remotely. Understanding employment contracts, payroll taxes, and data privacy laws that apply to remote workers in a different location can be intricate.
• Cultural Nuances: Effective communication and collaboration are essential for any remote team. However, cultural differences in Saudi Arabia, such as communication styles and work expectations, can add complexity to managing remote employees. Building trust and rapport virtually requires extra effort.

Data Security and Compliance: Ensuring data security is paramount, especially when employees access company information remotely. Implementing robust cybersecurity measures and data encryption protocols is crucial. Additionally, you'll need to comply with any relevant data privacy regulations in Saudi Arabia.

Building a remote team in Saudi Arabia offers exciting possibilities, but navigating the complexities of hiring can be daunting. RemotePass Employer of Record (EOR) services streamline the process, allowing you to focus on finding top talent. Here's how:

• Compliance Made Easy: RemotePass handles the entire process, ensuring your foreign hires have the necessary documentation to work legally. We also ensure adherence to KSA's comprehensive labor laws, minimizing risks of non-compliance.
• Reduced HR Burden: RemotePass takes care of everything, from salary calculations to social security contributions, freeing your team to focus on core business activities.
• Access to Top KSA Talent: Our extensive network within the Kingdom grants access to a wider pool of qualified candidates, ensuring you attract the best fit for your needs.
• Cost-Effectiveness: RemotePass leverages our existing infrastructure, offering economies of scale that translate to cost savings for you. Additionally, our expertise minimizes the risk of non-compliance penalties.
• Scalability and Flexibility: Our solutions adapt to your evolving needs. Whether you're starting with a single hire or require a larger remote team, RemotePass provides the flexibility to scale your workforce seamlessly.

Book a demo to simplify hiring in KSA.