2.00%

Social Insurance Tax for non-Saudi employees – occupational hazard (Minimum earnings 400 SAR, maximum earnings 45,000 SAR) (with effect from 1/2/2022, the General Organisation for Social Insurance (GOSI) confirmed that social insurance contributions must be calculated on a daily basis rather than a monthly basis)

12.00%

Social Insurance Tax for Saudi employees – occupational hazard, pension, and unemployment) (Minimum earnings 1,500 SAR, maximum earnings 45,000 SAR) (with effect from 1/2/2022, the General Organisation for Social Insurance (GOSI) confirmed that social insurance contributions must be calculated on a daily basis rather than a monthly basis)

12.00% to 13.50% Total Employment Cost

Employee Payroll Contributions

10.00%

Social Insurance Tax for No Saudi employees – occupational hazard

10.00% Total Employee Cost

Employee Income Tax
0.00%
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Since there is no individual income tax regime in Saudi Arabia, earnings from employment are not subject to income tax.

The national minimum wage in Saudi Arabia is 4,000 SAR per month.

In Saudi Arabia, the payroll frequency is weekly or monthly. The employer must make the payment for weekly employees once a week and make payments for monthly paid employees at least once a month.

13th-month payments are not mandatory.

The working week in Saudi Arabia is typically 48 hours, 8 hours per day, and six days a week. The working day may decrease to 6 hours a day during the time of Ramadan. Typically, Fridays are a rest day.

All work exceeding the standard working hours a week is to be paid as overtime and is regulated by employment contract/collective agreements. Daily hours cannot exceed 11 hours.

All overtime hours in excess of 48 hours a week are paid at an overtime compensation rate; this rate is typically 150.00% of the employee’s average salary rate.

In Saudi Arabia, (Article 109 of the Labour Law), the annual leave entitlement is dependent on the employee’s seniority as follows: 

For employees with one to five years of service, the employee receives 21 days of annual leave. Employees with more than five years of service are entitled to 30 days of annual leave.
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Employees may carry over any untaken leave to the following vacation leave with the employer’s written consent.

Employees may request ten additional days of unpaid leave per year, subject to the employer’s approval.

There are 3 public holidays.

Employee is entitled to a sick leave provided they have a satisfactory medical report for:·      

The first thirty days of illness on full pay.      

The next sixty days on three-quarters pay.

Female employees are entitled to 10 weeks of paid maternity leave commencing four weeks before the expected due date. The payment of maternity leave is dependent on the employee’s seniority; employers will compensate employees with service of at least one year at 50.00% of the employee’s pay rate. Employees with at least three years of service receive compensation at the rate of 100.00% of the employees’ regular pay.  

An employee receiving full maternity leave entitlement may not also take the payment of annual leave in the same year. In contrast, an employee receiving 50.00% of their salary as a maternity benefit may also take an annual leave entitlement of 50.00% in the same year.

A father is entitled to 3 days of paid paternity leave for a birth of a child.

There are no provisions in the law regarding parental leave.

Employees are entitled to 5 days of paid leave following the death of their parents or children.

Female Muslim employees whose spouse dies are entitled to 4 months and 10 days of compassionate leave. Non-Muslim female employees receive 15 days of compassionate leave

Depending on the Collective Agreement/Employment Contract terms, an employee may be allowed additional leave types, once approved between the employer and employee, for the following:

‍Bereavement leave: In the event of the death of an immediate member, an employee is entitled to two days of bereavement leave.  

Marriage leave: An employee is entitled to 3 days of leave in the event of their wedding.  

Hajj leave/Pilgrimage leave: As per Article 114 of the Labour Law, an employee is entitled between 10 to 15 days (including the Eid Al-Adha holiday) to perform Hajj if the employee has completed at least 2 consecutive years of service with the employer. However, this entitlement arises only if the employee has not performed Haj previously.  

The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination. The employer must give a valid reason for the dismissal of an employee; if an employer cannot provide lawful reasoning, compensation may be issued.  

If an employee resigns, the employer must issue their final wages immediately.

In Saudi Arabia, the notice period is dependent on the type of contract in place; for employees on monthly employment contracts, the notice period is 30 days and 15 days of notice for any other type of employment contract.

Article 75 is amended to increase the notice period for terminating indefinite term contracts from 30 to 60 days for employees paid on a monthly basis and from 15 to 30 days for all other employees.

If the service period is below two years – No gratuity is paid.
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If the service period is above two and below five years – one-third of accrual.

If the service is above five years but less than ten years – two-thirds of accrual.

If the service period is above ten years – full accrual.

In Saudi Arabia, the probation periods may vary depending on the employment contract in place. However, the probation period is typically 90 days however this period may be extended subject to the employees written consent but cannot exceed 180 days.

For an employee to acquire a work visa in Saudi Arabia, a foreign national must be sponsored by an employer. The employer must be registered with the Ministry of Interior, and a file is opened with all the information on the employer’s foreign employees.   ​Saudi Arabia’s quota system and nationalization program can make the process of employing a foreign national relatively complex and restrictive. Applicable procedures involve a home-country consular process, followed by several post-arrival steps before final residency rights are granted.

Business travelers typically apply for a Business Visit Visa at a Saudi consular post once they receive a government-approved letter of invitation from a sponsor in Saudi Arabia. Business Visit Visas are usually valid for three months (single-entry) or 12 months (multiple-entry), or up to five years (multiple-entry) for citizens of countries that signed bilateral visa agreements with Saudi Arabia. The maximum allowable duration of stay under a single-entry visa for three and six months is 30 days; for visas with other validities, it is 90 days.

There is no longer a short-term work option in Saudi Arabia; for long-term work, foreign nationals can apply for a Work Permit and Resident ID Card, which is valid for up to one year with the possibility of extensions.​​​​​​​

This does not apply to citizens from Bahrain, United Arab Emirates, Kuwait, and Oman. Citizens from these countries may enter with their ID.

The standard of VAT in Saudi Arabia is 15.00%