Saudi Arabia Employment Guide
Saudi Arabia Employment Guide
Saudi Arabia, located in the Arabian Peninsula, is a leading economy in the Middle East driven by oil, petrochemicals, and increasingly, tourism and technology. With a population of over 35 million, the labor market is regulated by the Saudi Labor Law, which governs employment contracts, working hours, leave entitlements, termination rules, and Saudization requirements (employing a certain quota of Saudi nationals). Employers must comply with social insurance, GOSI contributions, and wage protection regulations. Employee rights, workplace safety, and non-discrimination are legally protected.
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Currency
Saudi Riyal (SAR)
Capital
Riyadh
Official language
Arabic
Salary Cycle
Monthly
Our Employment Guide in Saudi Arabia
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Minimum Wage Regulations in Saudi Arabia
Saudi Arabia's minimum wage policy distinguishes between national and expatriate workers. Saudi nationals are entitled to a minimum monthly salary of 4,000 SAR, while there is no statutory minimum wage requirement for visa-holding foreign employees.
Income Tax Framework
The Kingdom of Saudi Arabia maintains a zero percent income tax rate for individuals, making it an attractive destination for international professionals.
Employer Cost Structure
Monthly employment costs vary significantly based on employee nationality, selected medical insurance tier, and family composition. For multinational companies, understanding these variables is crucial for accurate budgeting.
Key Cost Components
| Cost Category | Specifications |
|---|---|
| GOSI Social Security | Expatriates: 1.80% of total monthly salary or 2% of basic salary plus housing allowance (capped at 45,000 SAR) Saudi Nationals: 10.575% of total monthly salary or 11.75% of basic salary plus housing allowance GCC Nationals: Variable rates depending on country of origin |
| Ajeer Fixed Fee | 46 SAR per expatriate employee |
| Saudization Fee | Approximately 3,000 SAR, with variations between 400-800 USD based on position classification |
Additional Financial Considerations
- Mandatory health insurance ranges from 3,795 to 20,700 SAR annually based on coverage level and dependents
- Employers must provide annual round-trip airfare to home country for expatriates
- Exit/re-entry visa fees apply at 54 USD per transaction, with multiple-entry visas costing up to 615 USD
- Engineering professionals require annual 800 SAR registration with Saudi Council of Engineers
- Bank account setup assistance typically incurs 27 USD service charges
These figures represent estimated costs. For precise calculations tailored to your specific workforce composition, consult SailGlobal's compensation specialists.
Working Hours and Overtime Provisions
The standard workweek spans Sunday through Thursday with 8-hour daily maximums (40 hours weekly). Companies may extend operations to include Saturdays, increasing maximum weekly hours to 48.
Special Circumstances
During Ramadan, daily working hours reduce to 6 hours. Non-managerial staff receive mandatory overtime compensation at 150% of base hourly rate, with annual overtime capped at 481 hours. Managerial employees may receive compensatory time off instead of overtime pay, subject to employer approval.
Compliance Requirements
All overtime requires prior written authorization. National holidays and Eid celebrations automatically qualify all worked hours as overtime. SailGlobal's HR consultants recommend implementing clear overtime approval workflows to ensure regulatory compliance.
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