Saudi Arabia

Saudi Arabia, a key economic player in the Middle East, offers a dynamic business environment characterized by its Vision 2030 initiative, aiming to diversify the economy and enhance the private sector's role. The Kingdom's labor market is undergoing significant reforms to modernize employment practices and improve worker rights.
Contractor Management
EOR
Payroll
Contractor of Record
Currency
Saudi Riyal (SAR)
Payroll Frequency
Monthly
Employer Taxes
12 to 14%

Overview

Population
~ 35 million
Language
Arabic
Capital
Riyadh
Currency
Saudi Riyal (SAR)
Country code
+966
Min wage
5,800 SAR / month
Working hours
8 hours/day, 6 days/week
Weekdays
Sunday to Thursday
Work hours per week
48 hours per week

Payroll

Salaried Employees
Time-Based Employees
13th Salary

Not mandatory; subject to employer discretion

Avg employer tax

12% to 14%

Tax Breakdown

Personal Income Tax (PIT):

Saudi nationals contribute 10% to the General Organization for Social Insurance (GOSI), while employers contribute 12% for pensions and 2% for unemployment insurance. Expatriates are not subject to GOSI contributions.

Corporate Income Tax (CIT):

Standard Rate
20% on net adjusted profits
Zakat
2.5% on the company's Zakat base (net worth)
Special Rates
Income from oil and hydrocarbon production is taxed at rates ranging from 50% to 85%

Social Security Contributions:

Saudi nationals contribute 10% to the General Organization for Social Insurance (GOSI), while employers contribute 12% for pensions and 2% for unemployment insurance. Expatriates are not subject to GOSI contributions.

VAT

VAT

15%

Tax Calculation for Saudi Arabia
*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
SA
*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Top Countries
Employer cost
Total monthly cost of employment
Gross monthly salary costs
Estimated taxes and contributions
Employee cost
Net monthly salary
GBP 5,137
Gross monthly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Employer cost
Total yearly cost of employment
Gross yearly salary costs
Estimated taxes and contributions
Employee cost
Net yearly salary
GBP 5,137
Gross yearly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Request a detailed quotation
How it works

Onboarding Process

Onboarding in Saudi Arabia typically includes the following steps to ensure a smooth transition for new hires:

Employment Contract

Must be in writing; include job title, duties, salary, working hours, leave entitlements, and termination conditions

Registration with Authorities

Register the employee with the Ministry of Human Resources and Social Development (MHRSD) and GOSI

Payroll Setup

Ensure accurate calculation and withholding of taxes and social security contributions

Employee Documentation

Collect personal identification, bank account details, and tax information

Workplace Policies

Provide access to company policies, health and safety guidelines, and any applicable collective agreements

Pre-boarding

Pre-boarding

Pre-boarding

Key Elements of an Employment Contract in Saudi Arabia
When drafting an employment contract for employees in Saudi Arabia, the following key elements should be included:

Personal Details

Name, contact information, and role of the employee.

Employee Leave Policies

Sick days
  • Paid by employer for the first 30 days; thereafter, by GOSI
Maternity leave
  • 12 weeks (6 weeks postnatal)
Paternity leave
  •  3 days to be taken within 7 days of childbirth

Bereavement Leave:

  • 3 days for the death of a sibling

Hajj Leave:

  • 10 to 15 days of paid leave for employees performing the pilgrimage for the first time

Annual Leave
  • 21 days for employees with 1–5 years of service; 30 days for employees with more than 5 years
10 Public holidays in Saudi Arabia

Note: Islamic holidays are based on the lunar calendar and may vary annually.

22nd
Founding Day
1st
Ramadan Begins (Tentative)
11th
Flag Day
30th
Eid al-Fitr
31st
Eid al-Fitr Holiday
1st
Eid al-Fitr Holiday
5th
Arafat Day (Tentative)
6th
Eid al-Adha (Tentative)
7th
Eid al-Adha
23th
National Day
  • 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.

Termination Process

Notice Period

  • Employee-Initiated: 30 days
  • Employer-Initiated: 60 days

Severance Pay

Not mandatory; subject to employment agreements

Termination During Probation

Either party can terminate with 30 days' notice

Probation Period

  • Maximum Duration: 180 days
  • Extension: No additional agreement required to extend beyond initial 90 days
  • Termination During Probation: Either party can terminate with 30 days' notice

Personal Details

Name, contact information, and role of the employee.

_'s Booming Remote Workforce

Challenges of Remote Hiring in _

Simplifying Remote Hiring in _ with RemotePass 

Grow Your Team in Saudi Arabia
with RemotePass

Whether you're onboarding remote talent in Riyadh, navigating GOSI requirements, or expanding into the KSA market, RemotePass handles the heavy lifting.

Building and expanding a global workforce is seamless with RemotePass. Our platform simplifies the complexities of hiring, payroll, and compliance across over 150 countries, including Saudi Arabia.

With RemotePass, you can quickly onboard international employees, manage payroll, ensure legal compliance, and provide competitive benefits—all from one place. Focus on growing your business while we handle the HR and legal intricacies.

Free 7-day trial

No credit card required

Cancel anytime

A Complete Guide to Hiring in Saudi Arabia (KSA)

Saudi Arabia is a land of massive opportunity, but its compliance is complex. This is our insider's guide to everything from Saudization and GOSI and labor laws, so you can conquer the Kingdom.

RemotePass makes hiring in KSA simple. We handle compliance, contracts, and payroll. You focus on building your business.

Key Takeaways for Hiring in Saudi Arabia (KSA)

  • Saudi Arabia has no personal income tax, but employers must navigate GOSI contributions (11.75% for Saudi nationals, 2% for expats) and Zakat/corporate tax obligations.
  • Saudization quotas require companies to maintain a percentage of Saudi nationals on staff or face penalties and visa restrictions.
  • End-of-Service Benefits (EOSB) are mandatory severance calculated at half a month's salary per year for the first five years, then one month's salary per year after.
  • Employers must provide health insurance for all expat employees and cover repatriation costs when employment ends.

Quick Facts for Hiring in Saudi Arabia (KSA)

Continent
Asia
Capital
Riyadh
Currency
Saudi Riyal (SAR)
Language
Arabic
Payroll Cycle
Monthly
Pay Date
27th - 28th of the month

Saudi Arabia Employment Contract Overview

Contract Type
Fixed-term
Local Language Required?
Yes
Bilingual?
Yes
Probation Period
Up to 90 days. Another 90 days can be added upon written agreement.
Minimum Paid Time Off
21 calendar days
Public Holidays
Nine public holidays
Notice Period
60 days

What Do You Need to Include in a Saudi Arabia Employment Contract?

Make sure your contracts have all of these to comply with local labor laws:

Employee Information

  • Full name
  • ID number
    • For relocations - Passport/ID
    • For Expats inside KSA - Iqama and passport
    • For Saudi Nationals - National ID and passport
  • Role / Job title
    • KSA only recognizes specific government-approved job titles. Even if you use a different title in your offer letter, it'll need to be adjusted to match the official list when registering the employee.
  • Start date
  • Contract duration
  • Working hours
  • Probation and notice conditions
    • Maximum of 90 days, extendable once to 180 days (with written consent).
  • Notice Period
    • Minimum 60 days for indefinite contracts unless otherwise agreed.
  • Termination Provisions
    • You must clearly outline justifications for termination, severance entitlements, and end-of-service benefit calculations.

How Does Payroll and Taxation Work in Saudi Arabia?

Payroll in Saudi Arabia has some unique rules that affect how you hire and pay talent. Knowing the differences between Saudi nationals and expats helps you avoid compliance and budgeting headaches.

Saudi Arabia Payroll Basics

Salary currency

SAR (Saudi Riyal)

Minimum Wage

4,000 SAR for Saudi Nationals

No limit for expatriates

Hours per Week

Regular hours: 48 hours per week / Eight hours per day

Ramadan adjustment: 36 hours per week / Six hours per day

Payroll Frequency

Monthly

Weekdays

Sunday through Thursday

Mandatory Bonuses

Not required

Gross Salary Structure in Saudi Arabia

Salaries in Saudi Arabia are often split into a base salary and standard allowances. A common structure looks like this, though you can also offer extra allowances or benefits in your offer letter:

  • Basic Salary: 65%

  • Housing Allowance: 25%

  • Transportation Allowance: 10%

What Payroll Taxes do Employers Pay in Saudi Arabia?

Employer cost % (estimate):


Saudi Nationals


Expats

Contributions Breakdown


Saudi Nationals:

GOSI

  • Retirement: 9%

  • Compensation and disability: 2%

  • Unemployment insurance: 0.75%


Expats:

GOSI

Occupational Hazards Insurance: 2%

What Payroll Taxes Do Employees Pay in Saudi Arabia?

Individual Income Tax

No individual income tax

Social Contributions


Saudi Nationals

GOSI:

  • Retirement 9%
  • Unemployment insurance 0.75%

Expats

0%

Hiring cost calculator 

*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
SA
*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Top Countries
Employer cost
Total monthly cost of employment
Gross monthly salary costs
Estimated taxes and contributions
Employee cost
Net monthly salary
GBP 5,137
Gross monthly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Employer cost
Total yearly cost of employment
Gross yearly salary costs
Estimated taxes and contributions
Employee cost
Net yearly salary
GBP 5,137
Gross yearly salary
GBP 8,334
Estimated taxes & social security
GBP 8,334
Request a detailed quotation

Employee Benefits and Mobility in Saudi Arabia

Hiring in Saudi Arabia involves mandatory benefits like health insurance and end-of-service gratuity, as well as immigration and work permit requirements.

Mandatory Benefits in Saudi Arabia

Benefits Mandatory? Notes
Health Insurance

Yes

Employers must provide health insurance coverage as a condition of employment. Coverage usually includes basic medical care, hospitalization, and outpatient services. Expats' dependents linked to their Iqama are also covered.

Pension / Social Security

Yes, only for Saudi nationals

Coverage includes retirement pension, disability benefits, survivor benefits, and unemployment insurance (SANED).

Other Statutory Benefits

Yes

End-of-service benefits (EOSB)

Immigration Fees in Saudi Arabia

Employees in Saudi Arabia need a residence permit (Iqama) and a work permit. Typical costs are:

Employees Inside KSA - without Iqama

Type Fee
Iqama Issuance

SAR 11,850 (Annual)

Employees Inside KSA - with Iqama

Type Fee
Iqama Renewal

SAR 11,850 (Annual)

Iqama Transfer - First time

SAR 2,000

Iqama Transfer - Second time

SAR 4,000

Iqama Transfer - Third time or more

SAR 6,000

Employees Outside KSA

Type Fee
Work Visa Issuance

SAR 11,000

Labor Card and Iqama Issuance

SAR 11,850

Iqama Renewal (upon expiry)

SAR 11,850

Other Fees

Type Fee
Saudization Fee

SAR 1,500 (Monthly)

Government Dependent Levy Fee

SAR 440 (Monthly, per dependent)

Legalization Fees (optional)

Approximately ~ SAR 3,000 - 4,000

Leave and Holidays in Saudi Arabia

Annual leave

21 calendar days

30 calendar days for five+ years of service.

Public holidays

Employees are entitled to nine days of paid public holidays each year. Some dates vary annually due to the lunar calendar.

These holidays include:

  • Eid Al-Fitr (date varies): Although the holiday spans ten days, most employers grant three days off.

  • Eid Al-Adha (date varies): This holiday also lasts ten days, but typically, five days are observed.

  • September 23: Saudi National Day.

If National Day falls on a weekend, a substitute day off is usually provided either before or after the weekend. Employees required to work on public holidays are entitled to 150% of their standard wage.

Sick Leave

Up to 120 days per year

  • First 30 days: full pay

  • Next 60 days: half pay

  • Final 30 days: unpaid

Maternity Leave

12 weeks (recently extended from ten weeks). Saudi nationals get full pay and expats typically do as well, depending on their contract or employer policy.

Paternity Leave

Three days under the updated labor law.

Other Types of Leave

  • Hajj Leave: Unpaid leave for Muslim employees to perform Hajj pilgrimage once during employment.

  • Bereavement Leave: Five days of leave for the death of a spouse, parent or child.

  • Emergency Leave: Discretionary.

  • Marriage Leave: Discretionary.

Termination and Offboarding in Saudi Arabia

Type Possible?
Termination for Cause (poor performance, misconduct, etc.) Yes
Termination without Cause Yes
Mutual Termination Agreement (MTA) Yes
Redundancy Possible but not recommended. Consult on a case-by-case basis

Employee Resignations

Employee
Resignations

 Termination with Cause

Termination
with Cause

Termination without Cause

Termination
without Cause

Mutual Termination Agreement

Mutual Termination
Agreement

 Fixed Term Contract

Fixed Term
Contract

The Employee Resignation Process in Saudi Arabia

Acceptable Grounds for Resignation:

Employees can resign voluntarily with written notice.

In certain situations, an employee can resign without notice, including:

  • When the employer doesn't meet key contractual or legal obligations
  • If the employer misrepresented the job or working conditions during hiring
  • If the employer assigns duties that significantly differ from those in the contract (except for temporary adjustments up to 30 days per year)
  • In cases of violence, immoral behavior, or abuse by the employer, supervisor, or their family members
  • If the employee faces persistent cruelty, injustice, or verbal abuse
  • When the workplace poses serious health or safety risks that the employer doesn't address
  • If the employer's actions, such as unfair treatment or breach of contract, effectively force the employee to resign
  • During the probationary period, employees can also resign without notice

Notice

Form

The employee must submit their resignation in writing and then on the Qiwa platform.

Notice period

  • During probation, either party can terminate the contract without notice.
  • After probation, 30 days if the employee initiates the resignation.

Payment in lieu of notice or notice waiver

If either party ends the employment contract without giving the required notice, they must compensate the other party with an amount equal to the employee's salary for the notice period or for the remaining term of the contract, whichever applies.

End-of-Service Benefits

Severance/Gratuity

Employees are entitled to:

  • Half a month's wage for each of the first five years of service
  • One month's wage for each additional year after that

Employees who resign within the first two years aren't entitled to gratuity, unless otherwise stated in their contract.

Other Benefits

If eligible, the employee will be paid:

  • Unused annual leave
  • Any other outstanding dues

Termination Documentation

  • Email confirmation
  • Last payslip
  • Experience letter
  • Transfer process for expats
  • Removal from GOSI (only for Saudi nationals)
  • Resignation letter

Employer Termination With Cause in Saudi Arabia

This termination type isn't possible under the Employer of Record setup in Saudi Arabia due to local labor law restrictions. For compliant termination options, see:

  • Mutual Termination Agreements
  • Employee Resignation
  • Fixed-term Contract Expiry

If you need termination with cause, you'll need to establish your own Saudi entity.

Employer Termination Without Cause in Saudi Arabia

This termination type isn't possible under the Employer of Record setup in Saudi Arabia due to local labor law restrictions. For compliant termination options, see:

  • Mutual Termination Agreements
  • Employee Resignation
  • Fixed-term Contract Expiry

If you need termination without cause, you'll need to establish your own Saudi entity.

Mutual Termination Agreements (MTAs) in KSA

Under Article 74, an employment contract may be terminated by employer and employee's mutual written consent. The worker's agreement must be in writing to be valid and enforceable.

Notice

For indefinite-term contracts, the law requires notice periods unless mutually agreed otherwise:

  • If the employee is paid monthly, written notice must be at least 60 days.
  • If paid on a non-monthly basis, notice must be at least 30 days.

End-of-Service Benefits

Severance/Gratuity

EOSB is applicable in MTAs. When employment ends, the employer needs to give the employee an end-of-service benefit equal to:

  • Half a month's salary for each of the first five years of service, and
  • A full month's salary for each additional year.

This calculation is based on the employee's final full monthly wage.

Other Benefits

Payment for any unused leave.

Upon request, the employer must provide a work certificate stating the employee's job title, employment dates, and last salary. If it includes any negative remarks, the employer must explain the reason.

During the notice period, employees are entitled to eight paid hours per week or one paid day per week to look for another job.

Termination Documentation:

MTAs are signed written agreements that must specify end date and terms.

Offboarding Process for the End of Fixed-term Contracts in Saudi Arabia

If the Fixed-Term Contract Ends Normally:

Notice

Neither employers nor employees need to give notice if the contract ends on the agreed-upon expiry date. However, it's common for either party to confirm in writing at least 30 days before the end of the contract whether they want to renew or end the contract.

End-of-Service Benefits

Severance/Gratuity

Employees are entitled to an end-of-service award (gratuity), calculated as:

  • Half a month's wage for each of the first five years.
  • One month's wage for each subsequent year.

If the contract duration is less than two years, the gratuity may not be applicable unless otherwise agreed.

Other Benefits

  • Payment for any unused annual leave balance.
  • Final salary and any outstanding dues (e.g., bonuses, commissions).
  • Certificate of service upon request (as required by law).
  • Repatriation costs for expat employees (if applicable).

If the Employer Terminates Early:

Notice

If the employer terminates the contract before its expiry without a valid reason, they need to give 60-days' notice.

End-of-Service Benefits

Severance/Gratuity

The employee is entitled to the same end-of-service award as if the contract ended normally. Compensation for unjust termination may apply (typically the wage for the remainder of the contract).

Other Benefits

  • Payment for unused leave, final salary, and any other contractual entitlements.
  • Repatriation costs if applicable.
  • Additional compensation if termination violates contractual terms or labor law.

Employer Termination due to Redundancy in Saudi Arabia

Grounds

Employers can initiate termination for valid business reasons (e.g., restructuring, role no longer required).

Notice

Form

The employer must clearly communicate the reason in writing and properly document the business case.

Notice period

Minimum notice period is 60 calendar days if the employee is on an indefinite contract.

Payment in lieu of notice or notice waiver

If the employer doesn't give notice, they have to give payment in lieu (60 days' worth of wages)

End-of-Service Benefits

Severance/Gratuity

Severance/End of Service Benefits (EOSB) is applicable in cases of redundancy.

Other Benefits

Unused leave

Final Payment Timing and Immigration and Visa Compliance in Saudi Arabia

Final Payment Timing and Compliance:

Final Payment Deadline

Under Saudi Labor Law (Article 88), if the employer terminates the employee, the final payment (wages, EOSB, unused leave, etc.) must be settled within seven days from the employee's last working day. If the employee resigns, the final payment must be settled within 14 days from the date of resignation acceptance or last working day, whichever is earlier.

Penalty

Employers who fail to pay final entitlements on time may face:

  • Fines issued by MHRSD.
  • Suspension of government services (e.g., work visas, GOSI transactions).
  • Labor court claims by the employee.

Visa and Immigration Compliance:

Final Exit Visa & Employer Responsibilities:

The employer must process the Final Exit Visa once the employment contract ends, ensuring all dues (like final salary, EOSB, and any fines) are cleared beforehand.

Employees can apply for the Final Exit Visa through Absher or Qiwa themselves once their contract has ended or expired, but employers are notified and have ten working days to object for legitimate reasons like pending disputes.

Employers are still responsible for ensuring the employee actually leaves the country. If that doesn't happen, you need to cancel the visa and report the situation to the authorities.

Airfare and Ticket Obligations:

Under Article 40 of the Saudi Labor Law:

There are some exceptions where the employee has to pay for their own ticket:

  • Employees resigning before contract completion.
  • Employees terminating during probation.
  • Employees opting for sponsorship transfer instead of final exit, where the new employer assumes the ticket costs.

Grace Period After Termination:

After termination, employees have a 60-day grace period to complete exit procedures. Their Iqama and work permit remain valid during this time.

Key Elements of an Employment Contract in Saudi Arabia
When drafting an employment contract for employees in Saudi Arabia, the following key elements should be included:

Personal Details

Name, contact information, and role of the employee.

_'s Booming Remote Workforce

Challenges of Remote Hiring in _

Simplifying Remote Hiring in _ with RemotePass 

Employ and Pay Talent in the KSA. Without the Headaches.

Whether you're onboarding remote talent in Riyadh, navigating GOSI requirements, or expanding into the KSA market, RemotePass handles the heavy lifting.

Building and expanding a global workforce is seamless with RemotePass. Our platform simplifies the complexities of hiring, payroll, and compliance across over 150 countries, including Saudi Arabia.

With RemotePass, you can quickly onboard international employees, manage payroll, ensure legal compliance, and provide competitive benefits—all from one place. Focus on growing your business while we handle the HR and legal intricacies.

FAQs about Hiring in Saudi Arabia (KSA)

Got Questions? Find Answers Here

Do I need a local entity to hire in Saudi Arabia?

Not necessarily. You can partner with an Employer of Record (EOR) service like RemotePass to legally employ and pay talent in KSA without opening a local branch or company.

Is there income tax in Saudi Arabia?

No. Saudi Arabia doesn't levy personal income tax on salaries. However, there is a 2.5% Zakat for Saudi nationals and a 20% corporate tax on foreign-owned businesses.

What is GOSI and who is required to contribute?

GOSI (General Organization for Social Insurance) is the mandatory social security system in Saudi Arabia. Saudi employers must register Saudi and GCC nationals and make monthly contributions (up to 22%). Expat employees are not covered under GOSI for pensions but may be covered for occupational hazards.

Can I sponsor a work visa for a foreign employee in Saudi Arabia?

Can I sponsor a work visa for a foreign employee in Saudi Arabia? Yes, but only if you have a local entity with a Saudization-compliant quota. Without an entity, an EOR like RemotePass can sponsor the visa for you.

What is Saudization and how does it affect hiring?

Saudization (Nitaqat) is a policy that requires companies to hire a certain percentage of Saudi nationals. The exact ratio depends on your company size and sector. Non-compliance can restrict visa issuance and renewals.

How long is probation in Saudi Arabia?

Up to 90 days by default, extendable to 180 days with mutual written agreement.

How many paid public holidays are there in Saudi Arabia?

There are usually between nine and 11 paid public holidays annually, including Eid al-Fitr, Eid al-Adha, and Saudi National Day. Dates shift due to the Islamic lunar calendar.

Can I terminate an employee without cause in Saudi Arabia?

Yes, but termination must follow due process, including proper notice, EOSB payment, and valid justification under Saudi Labor Law. Arbitrary termination can lead to legal disputes.

Are private health insurance and housing benefits mandatory?

Health insurance is mandatory for all expat employees. While housing allowance is not legally required, it's customary and often included in expat compensation packages.

What's the standard workweek in KSA?

Sunday to Thursday is the standard workweek. The maximum legal working hours are 48 per week, reduced to 36 during Ramadan for Muslim employees.

Let’s Chat

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Saudi Arabia

Saudi Arabia, a key economic player in the Middle East, offers a dynamic business environment characterized by its Vision 2030 initiative, aiming to diversify the economy and enhance the private sector's role. The Kingdom's labor market is undergoing significant reforms to modernize employment practices and improve worker rights.
Contractor Management
EOR
Payroll
Contractor of Record
العملة
Saudi Riyal (SAR)
تردد الرواتب
Monthly
ضرائب أصحاب العمل
12 to 14%

نظرة عامة

التركيبة السكانية
~ 35 million
اللغة
Arabic
العاصمة
Riyadh
العملة
Saudi Riyal (SAR)
رمز الاتصال الدولي
+966
الحد الأدنى للأجور
5,800 SAR / month
ساعات العمل
8 hours/day, 6 days/week
أيام الأسبوع
Sunday to Thursday
ساعات العمل اسبوعيا
48 hours per week

الرواتب

الموظفون برواتب ثابتة
الموظفون بنظام الأجر الزمني
13th Salary

Not mandatory; subject to employer discretion

متوسط ​​ضريبة صاحب العمل

12% to 14%

تحصيل الضرائب

Personal Income Tax (PIT):

Saudi nationals contribute 10% to the General Organization for Social Insurance (GOSI), while employers contribute 12% for pensions and 2% for unemployment insurance. Expatriates are not subject to GOSI contributions.

Corporate Income Tax (CIT):

Standard Rate
20% on net adjusted profits
Zakat
2.5% on the company's Zakat base (net worth)
Special Rates
Income from oil and hydrocarbon production is taxed at rates ranging from 50% to 85%

Social Security Contributions:

Saudi nationals contribute 10% to the General Organization for Social Insurance (GOSI), while employers contribute 12% for pensions and 2% for unemployment insurance. Expatriates are not subject to GOSI contributions.

ضريبة القيمة المضافة

ضريبة القيمة المضافة

15%

حساب الضريبة في Saudi Arabia
*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
SA
*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Top Countries
تكلفة صاحب العمل
إجمالي تكلفة التوظيف الشهرية
إجمالي تكاليف الراتب الشهري
الضرائب والمساهمات المقدرة
تكلفة الموظف
صافي الراتب الشهري

GBP 5,137
الراتب الشهري الإجمالي
GBP 8,334
الضرائب المقدرة والضمان الاجتماعي
GBP 8,334
تكلفة صاحب العمل
إجمالي تكلفة التوظيف السنوية
إجمالي تكاليف الرواتب السنوية
الضرائب والمساهمات المقدرة
تكلفة الموظف
صافي الراتب السنوي

GBP 5,137
الراتب السنوي الإجمالي
GBP 8,334
الضرائب المقدرة والضمان الاجتماعي
GBP 8,334
اطلب عرض أسعار تفصيلي
كيف تعمل الخدمة

عملية الانضمام

تشمل عملية التوظيف في Saudi Arabia عادة الخطوات التالية لضمان انتقال سلس للموظفين الجدد:

Employment Contract

Must be in writing; include job title, duties, salary, working hours, leave entitlements, and termination conditions

Registration with Authorities

Register the employee with the Ministry of Human Resources and Social Development (MHRSD) and GOSI

Payroll Setup

Ensure accurate calculation and withholding of taxes and social security contributions

Employee Documentation

Collect personal identification, bank account details, and tax information

Workplace Policies

Provide access to company policies, health and safety guidelines, and any applicable collective agreements

Pre-boarding

Pre-boarding

Pre-boarding

العناصر الأساسية في عقد العمل في Saudi Arabia
عند إعداد عقد عمل للموظفين في Saudi Arabia يجب تضمين العناصر الأساسية التالية:

Personal Details

Name, contact information, and role of the employee.

سياسات إجازات الموظفين

الإجازات المرضية
  • Paid by employer for the first 30 days; thereafter, by GOSI
إجازة الأمومة
  • 12 weeks (6 weeks postnatal)
إجازة الأبوة
  •  3 days to be taken within 7 days of childbirth

Bereavement Leave:

  • 3 days for the death of a sibling

Hajj Leave:

  • 10 to 15 days of paid leave for employees performing the pilgrimage for the first time

الإجازة السنوية
  • 21 days for employees with 1–5 years of service; 30 days for employees with more than 5 years
10 عطلات رسمية في Saudi Arabia

Note: Islamic holidays are based on the lunar calendar and may vary annually.

22nd
Founding Day
1st
Ramadan Begins (Tentative)
11th
Flag Day
30th
Eid al-Fitr
31st
Eid al-Fitr Holiday
1st
Eid al-Fitr Holiday
5th
Arafat Day (Tentative)
6th
Eid al-Adha (Tentative)
7th
Eid al-Adha
23th
National Day
  • 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.

عملية إنهاء العقود

Notice Period

  • Employee-Initiated: 30 days
  • Employer-Initiated: 60 days

Severance Pay

Not mandatory; subject to employment agreements

Termination During Probation

Either party can terminate with 30 days' notice

Probation Period

  • Maximum Duration: 180 days
  • Extension: No additional agreement required to extend beyond initial 90 days
  • Termination During Probation: Either party can terminate with 30 days' notice

Personal Details

Name, contact information, and role of the employee.

نمو سوق العمل عن بُعد _  

تحديات التوظيف عن بُعد في  _

تبسيط التوظيف عن بُعد في _ مع ريموت باس

نمِّ فريقك في Saudi Arabia
مع ريموت باس

Whether you're onboarding remote talent in Riyadh, navigating GOSI requirements, or expanding into the KSA market, RemotePass handles the heavy lifting.

يصبح بناء فريق عالمي وتوسيعه مهمة سهلة مع ريموت باس. منصتنا تبسّط تعقيدات التوظيف والرواتب والامتثال القانوني في أكثر من 150 دولة، بما في ذلك Saudi Arabia.

مع ريموت باس، يمكنك ضم الموظفين الدوليين بسرعة، وإدارة الرواتب، وضمان الامتثال القانوني، وتقديم مزايا تنافسية — كل ذلك من مكان واحد. ركّز على تنمية أعمالك، ودع المهام الإدارية والقانونية علينا.

تجربة مجانية لمدة 7 أيام

لا حاجة لبطاقة ائتمان

يمكنك الإلغاء في أي وقت

A Complete Guide to Hiring in Saudi Arabia (KSA)

Saudi Arabia is a land of massive opportunity, but its compliance is complex. This is our insider's guide to everything from Saudization and GOSI and labor laws, so you can conquer the Kingdom.

RemotePass makes hiring in KSA simple. We handle compliance, contracts, and payroll. You focus on building your business.

Key Takeaways for Hiring in Saudi Arabia (KSA)

  • Saudi Arabia has no personal income tax, but employers must navigate GOSI contributions (11.75% for Saudi nationals, 2% for expats) and Zakat/corporate tax obligations.
  • Saudization quotas require companies to maintain a percentage of Saudi nationals on staff or face penalties and visa restrictions.
  • End-of-Service Benefits (EOSB) are mandatory severance calculated at half a month's salary per year for the first five years, then one month's salary per year after.
  • Employers must provide health insurance for all expat employees and cover repatriation costs when employment ends.

Quick Facts for Hiring in Saudi Arabia (KSA)

Continent
Asia
Capital
Riyadh
Currency
Saudi Riyal (SAR)
Language
Arabic
Payroll Cycle
Monthly
Pay Date
27th - 28th of the month

Saudi Arabia Employment Contract Overview

Contract Type
Fixed-term
Local Language Required?
Yes
Bilingual?
Yes
Probation Period
Up to 90 days. Another 90 days can be added upon written agreement.
Minimum Paid Time Off
21 calendar days
Public Holidays
Nine public holidays
Notice Period
60 days

What Do You Need to Include in a Saudi Arabia Employment Contract?

Make sure your contracts have all of these to comply with local labor laws:

Employee Information

  • Full name
  • ID number
    • For relocations - Passport/ID
    • For Expats inside KSA - Iqama and passport
    • For Saudi Nationals - National ID and passport
  • Role / Job title
    • KSA only recognizes specific government-approved job titles. Even if you use a different title in your offer letter, it'll need to be adjusted to match the official list when registering the employee.
  • Start date
  • Contract duration
  • Working hours
  • Probation and notice conditions
    • Maximum of 90 days, extendable once to 180 days (with written consent).
  • Notice Period
    • Minimum 60 days for indefinite contracts unless otherwise agreed.
  • Termination Provisions
    • You must clearly outline justifications for termination, severance entitlements, and end-of-service benefit calculations.

How Does Payroll and Taxation Work in Saudi Arabia?

Payroll in Saudi Arabia has some unique rules that affect how you hire and pay talent. Knowing the differences between Saudi nationals and expats helps you avoid compliance and budgeting headaches.

Saudi Arabia Payroll Basics

Salary currency

SAR (Saudi Riyal)

Minimum Wage

4,000 SAR for Saudi Nationals

No limit for expatriates

Hours per Week

Regular hours: 48 hours per week / Eight hours per day

Ramadan adjustment: 36 hours per week / Six hours per day

Payroll Frequency

Monthly

Weekdays

Sunday through Thursday

Mandatory Bonuses

Not required

Gross Salary Structure in Saudi Arabia

Salaries in Saudi Arabia are often split into a base salary and standard allowances. A common structure looks like this, though you can also offer extra allowances or benefits in your offer letter:

  • Basic Salary: 65%

  • Housing Allowance: 25%

  • Transportation Allowance: 10%

What Payroll Taxes do Employers Pay in Saudi Arabia?

Employer cost % (estimate):


Saudi Nationals


Expats

Contributions Breakdown


Saudi Nationals:

GOSI

  • Retirement: 9%

  • Compensation and disability: 2%

  • Unemployment insurance: 0.75%


Expats:

GOSI

Occupational Hazards Insurance: 2%

What Payroll Taxes Do Employees Pay in Saudi Arabia?

Individual Income Tax

No individual income tax

Social Contributions


Saudi Nationals

GOSI:

  • Retirement 9%
  • Unemployment insurance 0.75%

Expats

0%

حاسبة تكلفة التوظيف

*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
SA
*
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Top Countries
تكلفة صاحب العمل
إجمالي تكلفة التوظيف الشهرية
إجمالي تكاليف الراتب الشهري
الضرائب والمساهمات المقدرة
تكلفة الموظف
صافي الراتب الشهري

GBP 5,137
الراتب الشهري الإجمالي
GBP 8,334
الضرائب المقدرة والضمان الاجتماعي
GBP 8,334
تكلفة صاحب العمل
إجمالي تكلفة التوظيف السنوية
إجمالي تكاليف الرواتب السنوية
الضرائب والمساهمات المقدرة
تكلفة الموظف
صافي الراتب السنوي

GBP 5,137
الراتب السنوي الإجمالي
GBP 8,334
الضرائب المقدرة والضمان الاجتماعي
GBP 8,334
اطلب عرض أسعار تفصيلي

Employee Benefits and Mobility in Saudi Arabia

Hiring in Saudi Arabia involves mandatory benefits like health insurance and end-of-service gratuity, as well as immigration and work permit requirements.

Mandatory Benefits in Saudi Arabia

Benefits Mandatory? Notes
Health Insurance

Yes

Employers must provide health insurance coverage as a condition of employment. Coverage usually includes basic medical care, hospitalization, and outpatient services. Expats' dependents linked to their Iqama are also covered.

Pension / Social Security

Yes, only for Saudi nationals

Coverage includes retirement pension, disability benefits, survivor benefits, and unemployment insurance (SANED).

Other Statutory Benefits

Yes

End-of-service benefits (EOSB)

Immigration Fees in Saudi Arabia

Employees in Saudi Arabia need a residence permit (Iqama) and a work permit. Typical costs are:

Employees Inside KSA - without Iqama

Type Fee
Iqama Issuance

SAR 11,850 (Annual)

Employees Inside KSA - with Iqama

Type Fee
Iqama Renewal

SAR 11,850 (Annual)

Iqama Transfer - First time

SAR 2,000

Iqama Transfer - Second time

SAR 4,000

Iqama Transfer - Third time or more

SAR 6,000

Employees Outside KSA

Type Fee
Work Visa Issuance

SAR 11,000

Labor Card and Iqama Issuance

SAR 11,850

Iqama Renewal (upon expiry)

SAR 11,850

Other Fees

Type Fee
Saudization Fee

SAR 1,500 (Monthly)

Government Dependent Levy Fee

SAR 440 (Monthly, per dependent)

Legalization Fees (optional)

Approximately ~ SAR 3,000 - 4,000

Leave and Holidays in Saudi Arabia

Annual leave

21 calendar days

30 calendar days for five+ years of service.

Public holidays

Employees are entitled to nine days of paid public holidays each year. Some dates vary annually due to the lunar calendar.

These holidays include:

  • Eid Al-Fitr (date varies): Although the holiday spans ten days, most employers grant three days off.

  • Eid Al-Adha (date varies): This holiday also lasts ten days, but typically, five days are observed.

  • September 23: Saudi National Day.

If National Day falls on a weekend, a substitute day off is usually provided either before or after the weekend. Employees required to work on public holidays are entitled to 150% of their standard wage.

Sick Leave

Up to 120 days per year

  • First 30 days: full pay

  • Next 60 days: half pay

  • Final 30 days: unpaid

Maternity Leave

12 weeks (recently extended from ten weeks). Saudi nationals get full pay and expats typically do as well, depending on their contract or employer policy.

Paternity Leave

Three days under the updated labor law.

Other Types of Leave

  • Hajj Leave: Unpaid leave for Muslim employees to perform Hajj pilgrimage once during employment.

  • Bereavement Leave: Five days of leave for the death of a spouse, parent or child.

  • Emergency Leave: Discretionary.

  • Marriage Leave: Discretionary.

Termination and Offboarding in Saudi Arabia

Type Possible?
Termination for Cause (poor performance, misconduct, etc.) Yes
Termination without Cause Yes
Mutual Termination Agreement (MTA) Yes
Redundancy Possible but not recommended. Consult on a case-by-case basis

Employee Resignations

Employee
Resignations

 Termination with Cause

Termination
with Cause

Termination without Cause

Termination
without Cause

Mutual Termination Agreement

Mutual Termination
Agreement

 Fixed Term Contract

Fixed Term
Contract

The Employee Resignation Process in Saudi Arabia

Acceptable Grounds for Resignation:

Employees can resign voluntarily with written notice.

In certain situations, an employee can resign without notice, including:

  • When the employer doesn't meet key contractual or legal obligations
  • If the employer misrepresented the job or working conditions during hiring
  • If the employer assigns duties that significantly differ from those in the contract (except for temporary adjustments up to 30 days per year)
  • In cases of violence, immoral behavior, or abuse by the employer, supervisor, or their family members
  • If the employee faces persistent cruelty, injustice, or verbal abuse
  • When the workplace poses serious health or safety risks that the employer doesn't address
  • If the employer's actions, such as unfair treatment or breach of contract, effectively force the employee to resign
  • During the probationary period, employees can also resign without notice

Notice

Form

The employee must submit their resignation in writing and then on the Qiwa platform.

Notice period

  • During probation, either party can terminate the contract without notice.
  • After probation, 30 days if the employee initiates the resignation.

Payment in lieu of notice or notice waiver

If either party ends the employment contract without giving the required notice, they must compensate the other party with an amount equal to the employee's salary for the notice period or for the remaining term of the contract, whichever applies.

End-of-Service Benefits

Severance/Gratuity

Employees are entitled to:

  • Half a month's wage for each of the first five years of service
  • One month's wage for each additional year after that

Employees who resign within the first two years aren't entitled to gratuity, unless otherwise stated in their contract.

Other Benefits

If eligible, the employee will be paid:

  • Unused annual leave
  • Any other outstanding dues

Termination Documentation

  • Email confirmation
  • Last payslip
  • Experience letter
  • Transfer process for expats
  • Removal from GOSI (only for Saudi nationals)
  • Resignation letter

Employer Termination With Cause in Saudi Arabia

This termination type isn't possible under the Employer of Record setup in Saudi Arabia due to local labor law restrictions. For compliant termination options, see:

  • Mutual Termination Agreements
  • Employee Resignation
  • Fixed-term Contract Expiry

If you need termination with cause, you'll need to establish your own Saudi entity.

Employer Termination Without Cause in Saudi Arabia

This termination type isn't possible under the Employer of Record setup in Saudi Arabia due to local labor law restrictions. For compliant termination options, see:

  • Mutual Termination Agreements
  • Employee Resignation
  • Fixed-term Contract Expiry

If you need termination without cause, you'll need to establish your own Saudi entity.

Mutual Termination Agreements (MTAs) in KSA

Under Article 74, an employment contract may be terminated by employer and employee's mutual written consent. The worker's agreement must be in writing to be valid and enforceable.

Notice

For indefinite-term contracts, the law requires notice periods unless mutually agreed otherwise:

  • If the employee is paid monthly, written notice must be at least 60 days.
  • If paid on a non-monthly basis, notice must be at least 30 days.

End-of-Service Benefits

Severance/Gratuity

EOSB is applicable in MTAs. When employment ends, the employer needs to give the employee an end-of-service benefit equal to:

  • Half a month's salary for each of the first five years of service, and
  • A full month's salary for each additional year.

This calculation is based on the employee's final full monthly wage.

Other Benefits

Payment for any unused leave.

Upon request, the employer must provide a work certificate stating the employee's job title, employment dates, and last salary. If it includes any negative remarks, the employer must explain the reason.

During the notice period, employees are entitled to eight paid hours per week or one paid day per week to look for another job.

Termination Documentation:

MTAs are signed written agreements that must specify end date and terms.

Offboarding Process for the End of Fixed-term Contracts in Saudi Arabia

If the Fixed-Term Contract Ends Normally:

Notice

Neither employers nor employees need to give notice if the contract ends on the agreed-upon expiry date. However, it's common for either party to confirm in writing at least 30 days before the end of the contract whether they want to renew or end the contract.

End-of-Service Benefits

Severance/Gratuity

Employees are entitled to an end-of-service award (gratuity), calculated as:

  • Half a month's wage for each of the first five years.
  • One month's wage for each subsequent year.

If the contract duration is less than two years, the gratuity may not be applicable unless otherwise agreed.

Other Benefits

  • Payment for any unused annual leave balance.
  • Final salary and any outstanding dues (e.g., bonuses, commissions).
  • Certificate of service upon request (as required by law).
  • Repatriation costs for expat employees (if applicable).

If the Employer Terminates Early:

Notice

If the employer terminates the contract before its expiry without a valid reason, they need to give 60-days' notice.

End-of-Service Benefits

Severance/Gratuity

The employee is entitled to the same end-of-service award as if the contract ended normally. Compensation for unjust termination may apply (typically the wage for the remainder of the contract).

Other Benefits

  • Payment for unused leave, final salary, and any other contractual entitlements.
  • Repatriation costs if applicable.
  • Additional compensation if termination violates contractual terms or labor law.

Employer Termination due to Redundancy in Saudi Arabia

Grounds

Employers can initiate termination for valid business reasons (e.g., restructuring, role no longer required).

Notice

Form

The employer must clearly communicate the reason in writing and properly document the business case.

Notice period

Minimum notice period is 60 calendar days if the employee is on an indefinite contract.

Payment in lieu of notice or notice waiver

If the employer doesn't give notice, they have to give payment in lieu (60 days' worth of wages)

End-of-Service Benefits

Severance/Gratuity

Severance/End of Service Benefits (EOSB) is applicable in cases of redundancy.

Other Benefits

Unused leave

Final Payment Timing and Immigration and Visa Compliance in Saudi Arabia

Final Payment Timing and Compliance:

Final Payment Deadline

Under Saudi Labor Law (Article 88), if the employer terminates the employee, the final payment (wages, EOSB, unused leave, etc.) must be settled within seven days from the employee's last working day. If the employee resigns, the final payment must be settled within 14 days from the date of resignation acceptance or last working day, whichever is earlier.

Penalty

Employers who fail to pay final entitlements on time may face:

  • Fines issued by MHRSD.
  • Suspension of government services (e.g., work visas, GOSI transactions).
  • Labor court claims by the employee.

Visa and Immigration Compliance:

Final Exit Visa & Employer Responsibilities:

The employer must process the Final Exit Visa once the employment contract ends, ensuring all dues (like final salary, EOSB, and any fines) are cleared beforehand.

Employees can apply for the Final Exit Visa through Absher or Qiwa themselves once their contract has ended or expired, but employers are notified and have ten working days to object for legitimate reasons like pending disputes.

Employers are still responsible for ensuring the employee actually leaves the country. If that doesn't happen, you need to cancel the visa and report the situation to the authorities.

Airfare and Ticket Obligations:

Under Article 40 of the Saudi Labor Law:

There are some exceptions where the employee has to pay for their own ticket:

  • Employees resigning before contract completion.
  • Employees terminating during probation.
  • Employees opting for sponsorship transfer instead of final exit, where the new employer assumes the ticket costs.

Grace Period After Termination:

After termination, employees have a 60-day grace period to complete exit procedures. Their Iqama and work permit remain valid during this time.

Key Elements of an Employment Contract in Saudi Arabia
When drafting an employment contract for employees in Saudi Arabia, the following key elements should be included:

Personal Details

Name, contact information, and role of the employee.

_'s Booming Remote Workforce

Challenges of Remote Hiring in _

Simplifying Remote Hiring in _ with RemotePass 

Employ and Pay Talent in the KSA. Without the Headaches.

Whether you're onboarding remote talent in Riyadh, navigating GOSI requirements, or expanding into the KSA market, RemotePass handles the heavy lifting.

Building and expanding a global workforce is seamless with RemotePass. Our platform simplifies the complexities of hiring, payroll, and compliance across over 150 countries, including Saudi Arabia.

With RemotePass, you can quickly onboard international employees, manage payroll, ensure legal compliance, and provide competitive benefits—all from one place. Focus on growing your business while we handle the HR and legal intricacies.

FAQs about Hiring in Saudi Arabia (KSA)

Got Questions? Find Answers Here

Do I need a local entity to hire in Saudi Arabia?

Not necessarily. You can partner with an Employer of Record (EOR) service like RemotePass to legally employ and pay talent in KSA without opening a local branch or company.

Is there income tax in Saudi Arabia?

No. Saudi Arabia doesn't levy personal income tax on salaries. However, there is a 2.5% Zakat for Saudi nationals and a 20% corporate tax on foreign-owned businesses.

What is GOSI and who is required to contribute?

GOSI (General Organization for Social Insurance) is the mandatory social security system in Saudi Arabia. Saudi employers must register Saudi and GCC nationals and make monthly contributions (up to 22%). Expat employees are not covered under GOSI for pensions but may be covered for occupational hazards.

Can I sponsor a work visa for a foreign employee in Saudi Arabia?

Can I sponsor a work visa for a foreign employee in Saudi Arabia? Yes, but only if you have a local entity with a Saudization-compliant quota. Without an entity, an EOR like RemotePass can sponsor the visa for you.

What is Saudization and how does it affect hiring?

Saudization (Nitaqat) is a policy that requires companies to hire a certain percentage of Saudi nationals. The exact ratio depends on your company size and sector. Non-compliance can restrict visa issuance and renewals.

How long is probation in Saudi Arabia?

Up to 90 days by default, extendable to 180 days with mutual written agreement.

How many paid public holidays are there in Saudi Arabia?

There are usually between nine and 11 paid public holidays annually, including Eid al-Fitr, Eid al-Adha, and Saudi National Day. Dates shift due to the Islamic lunar calendar.

Can I terminate an employee without cause in Saudi Arabia?

Yes, but termination must follow due process, including proper notice, EOSB payment, and valid justification under Saudi Labor Law. Arbitrary termination can lead to legal disputes.

Are private health insurance and housing benefits mandatory?

Health insurance is mandatory for all expat employees. While housing allowance is not legally required, it's customary and often included in expat compensation packages.

What's the standard workweek in KSA?

Sunday to Thursday is the standard workweek. The maximum legal working hours are 48 per week, reduced to 36 during Ramadan for Muslim employees.

دعنا نَدْرُدْش

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.