Employee Benefits in Saudi Arabia: A Strategic Guide for Global Employers

Navigating the Saudi Arabian labor market requires a deep understanding of both mandatory and supplementary employee benefits. A well-structured benefits package is crucial for attracting and retaining top talent in this competitive environment.

Mandatory Employee Benefits in Saudi Arabia

By law, employers in Saudi Arabia must provide a foundational safety net for their employees. This includes contributions to the national pension system, unemployment insurance, and occupational injury insurance. These are non-negotiable requirements designed to protect the workforce.

Supplementary Employee Benefits: Gaining a Competitive Edge

Beyond the legal minimums, companies can significantly enhance their value proposition through strategic supplementary benefits. These offerings are not mandated but are instrumental in building a loyal and motivated team.

Enhanced Insurance Coverage

Many employers, especially for expatriate staff and senior executives, offer private health and life insurance plans. These plans often provide superior coverage, including access to a wider network of hospitals, coverage for specialized treatments, and higher claim limits, ensuring peace of mind for employees and their families.

Education Assistance for Dependents

A highly valued benefit is the reimbursement or direct payment of school fees for employees' children. This support, covering tuition, books, and other academic expenses, is a powerful tool for attracting expatriate professionals with families.

Supplementary Retirement Plans

To help employees build a more secure financial future, some companies offer additional retirement savings plans on top of the state pension. This demonstrates a long-term commitment to employee well-being.

Allowances for Living Expenses

To assist with the cost of living, it is common practice to provide allowances for housing, transportation, and communication. These can cover rent, car leases or fuel, and mobile phone bills, directly improving employees' quality of life.

Annual Travel Tickets

For expatriate employees, companies typically cover the cost of annual round-trip airfare to their home country. This benefit is essential for maintaining family connections and supporting work-life balance during annual leave.

End-of-Service Benefits

Upon the termination of a contract, employees are often entitled to an end-of-service award. For Saudi and GCC nationals on indefinite contracts, this is calculated as half a month's salary for each of the first five years of service and a full month's salary for each subsequent year.

Respect for Religious Observances

Cultural sensitivity is paramount. Employers must respect Islamic holidays such as Ramadan and Eid, providing time off and creating a supportive environment for religious practices. For instance, a multinational company might adjust working hours during Ramadan to accommodate fasting employees.

Support for Female Employees

In line with the Kingdom's evolving social landscape, employers must ensure female employees' rights are protected. This includes providing appropriate workplace facilities and support systems that cater to their specific needs, fostering an inclusive environment.

Accommodation for Prayer Times

As a Muslim country, employers are expected to allow employees time for daily prayers. This may involve providing a dedicated prayer room and offering flexible scheduling to accommodate these important religious obligations.

Crafting a Competitive Benefits Package with SailGlobal

Designing a compliant and attractive benefits plan in Saudi Arabia can be complex. SailGlobal offers tailored solutions, including a range of insurance plans, to help international businesses build competitive and culturally appropriate compensation packages that meet both legal requirements and employee expectations.

Saudi Arabia Employee Benefits Guide 2024: Mandatory & Supplementary