Employer of Record (EOR) Saudi Arabia: Hire, Manage, and Pay Talent Seamlessly
Get StartedTarmack is your Employer of Record (EOR) and Global PEO in Saudi Arabia, acting as your legal employer to keep you fully compliant and free from day-to-day operational hassles. With our platform, you can hire, onboard, pay, and manage employees or contractors seamlessly—without setting up a local entity.
EOR Services in Saudi Arabia
Comprehensive EOR Saudi Arabia Solutions for Seamless Global Hiring
1. Global Hiring and Onboarding in Saudi Arabia
Expand your business into Saudi Arabia without dealing with local entity setup or legal complications. Tarmack's services as an Employer of Record Saudi Arabia make it simple to hire employees there while staying compliant with local labor laws.
- Hire top talent without establishing a local entity
- Handle GOSI Registration, Iqama (work visa) sponsorship, and local onboarding
- Get legally compliant employment contracts in both Arabic and English
- Offer a smooth onboarding process aligned with local labor law requirements
2. Payroll Management
Simplify international payroll while meeting all Saudi Arabia payroll and tax regulations. Tarmack's Employer of Record services ensure accurate, timely salary payments and full compliance with the Wage Protection System (WPS).
- Process multi-currency payrolls
- Ensure compliance with WPS and GOSI contributions
- Provide transparent, audit-ready payroll reports
- Manage end-of-service benefits (ESB) as per local labor law
3. Compliance Assurance
Stay worry-free about complex and changing regulations with our Employer of Record services. Tarmack manages compliance across all aspects of employment in Saudi Arabia.
- Adhere to Saudization policies and labor quotas
- Prevent misclassification risks
- Keep documentation ready for audits and renewals
4. Benefits Administration
Our Employer of Record services deliver employee benefits that meet Saudi Arabia standards and boost satisfaction.
- Offer mandatory health insurance and statutory benefits
- Manage annual leave, ESB, and region-specific perks
- Seamlessly integrate payroll and HR processes
Employer of Record Saudi Arabia Pricing Structure
1. Employee Services
- Employer of Record — from $199/employee/month
If you want to hire full-time staff overseas without opening a local entity, this covers you. Payroll that follows local rules, country-specific contracts, benefits, HR and legal help, and full IP protection all come built in. - Recruiting — from 10% of annual salary
Tarmack, as an Employer of Record company, can find talent anywhere in the world. You get shortlists, interviews, quick timelines, optional background checks, and guidance on which countries fit your hiring needs. - Payroll — from $15/employee per cycle
We run payroll in 150+ countries, handle payslips and reimbursements, track attendance, and keep everything compliant through digital accounts. - Enterprise — custom
If you're planning to hire 10 or more people, we put together a tailored plan that includes global mobility help and advice on which markets make sense for your roles.
2. Contractor Services
- Contractor Recruiting — from 10% of annual salary
Tarmack as PEO Saudi Arabia helps you find contractors anywhere in the world with a quick turnaround. You get expert guidance on the best countries to hire from, AI-based matching, shortlisted profiles, video interviews, and optional background checks. - Contractor Management — from $39/contractor/month
Local contracts, compliant payments, expense tracking, automated invoices, HR/legal support, and the flexibility to move contractors into full-time roles later.
3. Corporate & Regulatory Services
- Company Formation — contact for pricing
If you need to set up a company abroad, Tarmack, as an Employer of record company, handles incorporation, paperwork, and guidance across 150+ countries. Add-on services like payroll or immigration are available too. - Immigration — from $999 per visa
Work permits and visas are handled end-to-end in multiple countries. Faster processing, clean documentation, and ongoing compliance checks. - HR Software — from $2/employee/month
A global HR system that covers payroll, attendance, expenses, reporting, and integrates with major ERPs. Simple and lightweight.
Benefits of Employer of Record Saudi Arabia (EOR KSA)
Expanding into Saudi Arabia is full of opportunities, but navigating its labor laws and Saudization rules can be tough. Tarmack’s services as an Employer of Record Saudi Arabia let you hire and manage talent locally—without the hassle of setting up an entity. Here are the benefits of Tarmack as EOR Saudi Arabia:
1. Fast and Compliant Market Entry
Launch your team in Saudi Arabia quickly with Tarmack as your legal employer. From drafting compliant bilingual employment contracts to managing visa and Iqama sponsorship, Tarmack, as your PEO Saudi Arabia, ensures your hiring meets every local requirement.
2. Cost-Effective Expansion
Skip the expensive process of company registration, government licensing, and ongoing compliance filings. With Tarmack as EOR KSA, you pay only for the employees and services you need—no hidden incorporation or administrative costs.
3. Total Compliance & Risk Management
Saudi labor and tax laws change often, and staying compliant is crucial. Tarmack handles everything—from GOSI (social insurance) registration and WPS (Wage Protection System) submissions to end-of-service benefits and local tax documentation.
4. Payroll & Benefits Simplified
Tarmack ensures accurate, on-time payroll in Saudi Riyals with clear reporting and statutory deductions. Every employee is covered under mandatory health insurance as per Council of Health Insurance regulations, with options to include additional perks or private coverage if required.
5. Agility and Scalability
Whether you’re hiring one remote employee or building a full in-country team, Tarmack as your EOR Saudi Arabia, makes scaling up or down simple. You can test the Saudi market confidently, without worrying about entity setup or termination complexities.
Employment Norms in Saudi Arabia
Saudi Arabia is an arid kingdom in the Middle East. The country is rich in oil and is among the largest crude oil suppliers in the world. The Gulf country has a robust infrastructure and a flourishing economy. Its advanced development has made it a favorite destination for global corporates looking to invest.
General Information:
- The Saudi Arabia currency is the Saudi Riyal (SAR).
- Riyadh is the capital of Saudi Arabia.
- Arabic is the official language of Saudi Arabia. For all legal and official purposes, the documentation is done in Arabic or English.
- As of 2022, the GDP of Saudi Arabia was reported to be 2439.08 Billion USD.
Labor laws in Saudi Arabia include wages, working hours, leave, health facilities, social benefits, etc.
Table of Contents
- Employment Contracts
- Unified Employment Contract
- Onboarding Requirements
- Visa
- Work Permits
- Hiring Saudi Employees
- Hiring Non-Saudi Employees
- Payroll Cycle
- Social Security
- Social Security Contributions
- Personal Income Tax
- Payroll Compliance
- Top Skills On Demand
- Minimum Wage
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Start Hiring Today
- Frequently Asked Questions
Employment ContractsUnified Employment ContractOnboarding RequirementsVisaWork PermitsHiring Saudi EmployeesHiring Non-Saudi EmployeesPayroll CycleSocial SecuritySocial Security ContributionsPersonal Income TaxPayroll ComplianceTop Skills On DemandMinimum WageAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesProbationTerminationSeverance PayEmployees or ContractorsStart Hiring TodayFrequently Asked Questions
Employment Contracts in Saudi Arabia
According to Article 50 of the Saudi Labor Law, an employment contract is an agreement where a worker undertakes to perform duties under the employer's management or supervision in return for remuneration.
A. Standard Form & Requirements
Under Article 52, the HRSD provides a standard form for contracts, which must include:
- Employer's name and location
- Worker's name, nationality, and identity details
- Worker's residential address
- Agreed remuneration (salary, benefits, allowances)
- Type and place of work
- Date of joining
- Duration (if fixed-term)
- The rights and obligations of both parties
Employers and employees may add additional clauses, provided they do not conflict with Saudi labor law and regulations.
B. Types of Contracts
- Fixed-term contracts: End when the term expires. If continued, they convert into indefinite contracts. After three renewals or four years (whichever is less), the contract automatically becomes indefinite.
- Indefinite contracts: Continue until terminated by either party under Saudi labor law.
- Specific work contracts: End upon completion of the agreed work.
C. Renewal Rules
Per Article 56, when a contract is renewed for a specified period, the renewal period is considered an extension of the original contract. This ensures that the worker's service period is calculated continuously.
D. Termination Conditions
Article 74 outlines when contracts can end under specific legal provisions, including:
- Mutual agreement (with written worker consent)
- Expiry of the fixed term (unless renewed)
- Resignation or termination by one party (for indefinite contracts)
- Worker reaching retirement age (unless both agree to continue)
- Force majeure events
- Permanent closure of the establishment or termination of activity
- Bankruptcy rulings or other legal conditions
Unified Employment Contract in Saudi Arabia
Starting from Oct 2025, Saudi Arabia now follows a single, government-approved employment contract for all sectors. It's a major move toward clearer rules and stronger worker protection—and it directly impacts how companies hire in the Kingdom. With Tarmack as your Employer of Record Saudi Arabia, you don't have to navigate this on your own. We handle the entire process for you, start to finish.
What does this mean for your Saudi Hiring?
1. One Format, No Exceptions
Every employer must use the same standardized contract. No custom templates. No informal agreements. The terms and structure are fixed by the government.
Every employer must use the same standardized contract. No custom templates. No informal agreements. The terms and structure are fixed by the government.
2. Everything Is Digital
Contracts must be created and verified online through systems like Qiwa and Najiz. This removes ambiguity and keeps every step traceable.
Contracts must be created and verified online through systems like Qiwa and Najiz. This removes ambiguity and keeps every step traceable.
3. Clear Salary Terms Are Mandatory
Wages, payment cycles, and entitlements have to be written clearly. The updated system gives workers a direct way to file complaints if payments are delayed, so accuracy isn't optional—it's required.
Wages, payment cycles, and entitlements have to be written clearly. The updated system gives workers a direct way to file complaints if payments are delayed, so accuracy isn't optional—it's required.
4. Fewer Disputes, More Clarity
The unified format cuts out the usual back-and-forth. Both sides know exactly what they're agreeing to, which means smoother employee onboarding and fewer compliance issues later.
The unified format cuts out the usual back-and-forth. Both sides know exactly what they're agreeing to, which means smoother employee onboarding and fewer compliance issues later.
When you hire through Tarmack as the Employer of record KSA, we make sure your contracts follow the new unified layout. We ensure a compliant hiring process without dealing with the legal and administrative maze yourself.
As your Employer of Record (EOR) in Saudi Arabia, Tarmack manages employment contracts in full compliance with local labor laws. Get in touch!
Onboarding Requirements in Saudi Arabia
Hiring in Saudi Arabia comes with a very specific onboarding flow. As your EOR KSA, Tarmack handles every moving piece so your employee lands smoothly, gets registered on time, and starts work without delays.
1. Pre-Arrival Setup
- Prepare a bilingual (Arabic-English) employment contract and register it on Qiwa, the mandatory platform for labor contracts.
- Issue the work visa under the correct job category and ensure it aligns with Saudization requirements.
- Run basic verification checks, confirm salary components (including allowances), and finalize the onboarding pack.
2. Arrival & Legal Registration
- Start the Iqama (residence permit) process as soon as the employee arrives. This includes medical tests, biometrics, and submitting documents through Absher or Muqeem.
- Enroll the employee in mandatory health insurance before the Iqama is issued.
- Register the employee with GOSI for social insurance and begin a fully compliant payroll setup.
3. Mandatory Digital Compliance
- Activate the employee's account on government systems such as Qiwa and Absher for contract verification, status updates, and personal services.
- Ensure wages are processed and reported through WPS/Mudad, as required for all employers in Saudi Arabia.
- Maintain updated digital copies of the contract, payslips, Iqama details, and related documents for audit readiness.
4. Post-Onboarding Requirements
- Track Iqama and visa renewals to avoid penalties or work interruptions.
- Keep benefits, leave entitlements, and end-of-service rules aligned with Saudi labor law.
- Update any changes—salary revisions, job titles, or contract amendments—directly on Qiwa to stay compliant.
As your Employer of Record (EOR) in Saudi Arabia, Tarmack handles employee onboarding smoothly and in line with Saudi labor regulations. Get in touch!
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Visa in Saudi Arabia
Saudi Arabia has 7 types of Visas:
- Work Visas - Required for foreigners who plan to work in the country. It is usually sponsored by a Saudi employer. These visas are valid for up to 2 years.
- Business Visas - For short-term business trips, such as attending conferences, meetings, or training sessions. These visas are valid for up to 3 months.
- Family Visit Visas - For family members of residents who plan to visit Saudi Arabia. These visas are valid for up to 3 months.
- Tourist Visas - For individuals visiting the country for leisure purposes. These visas can be obtained online and are valid for up to 90 days.
- Transit Visas - For those passing through the country. These visas are valid for up to 96 hours and are visa-on-arrival.
- Hajj and Umrah Visas - For individuals visiting Saudi Arabia to perform Hajj or Umrah. The Saudi government issues these visas for a limited period.
- Residence Visas - For individuals who plan to live and work in Saudi Arabia for an extended period. These visas are usually sponsored by a Saudi employer or a family member and can be renewed annually.
Work Permits in Saudi Arabia
Saudi Arabia relies heavily on foreign talent, but hiring expatriates is tightly regulated. Every employer must work within the Saudization (Nitaqat) system, which determines how many foreign workers a company can sponsor. Any business with five or more employees falls under these rules, and a company's Nitaqat rating directly affects how many expats it can hire for specific roles.
A. Work and Residence Permit
Foreign employees enter Saudi Arabia on a work visa tied to an authenticated employment contract.
- The initial visa is valid for one year, issued to individuals, registered companies, branches of foreign firms, or government entities.
- All foreign-national contracts are issued as one-year, limited-term contracts, renewed annually by the Ministry of Labor.
To obtain a work visa, the employee applies at the Saudi embassy or consulate in their home country and submits:
- Passport
- Signed employment contract
- Medical certificate
- Legalized proof of professional qualifications
- Some countries also require pre-arrival medicals and police clearance.
- Visa processing generally takes 6-8 weeks after all documents are submitted.
Upon arrival, the employee completes a local medical exam. The employer must then provide valid health insurance and apply for the employee's Iqama (residence permit). An Iqama also allows the employee to sponsor dependents up to age 18, provided medical insurance is active and the annual dependent levy is paid.
B. Block Visa System
Saudi employers often hire under a block visa—a pre-approved quota of visas allocated by the Ministry of Human Resources and Social Development (MHRSD).
- The employer submits its commercial registration and job details.
- Once approved, the company receives a set number of visas for specific roles.
- Employees then apply for individual visas based on this allocation.
After entering Saudi Arabia, each worker must obtain an Iqama within the allowed timeframe. Employers must keep all permits valid to avoid suspension of immigration services.
C. Temporary Work Visa (TWV)
For short-term, hands-on work (not suitable for business visit visas), companies use the Temporary Work Visa, valid for 90 to 180 days.
- Processing typically takes 8-10 working days after submission.
- The worker must hold a legalized degree.
- They cannot open a local bank account or sponsor dependents.
- The TWV does not affect the employer's Saudization status.
Foreign nationals cannot conduct trading activities without local sponsorship. Licensed professionals such as engineers, accountants, lawyers, and consultants may work by forming a professional partnership with a Saudi national under existing partnership regulations.
As your Employer of Record (EOR) in Saudi Arabia, Tarmack supports the entire employment visa process in KSA. Contact us for more details!
Hiring Saudi Employees in Saudi Arabia
Hiring Saudi nationals is now streamlined through the Qiwa platform, ensuring compliance and efficiency for employers. As your Employer of Record KSA, Tarmack manages the entire process, so you can focus on building your team while staying fully aligned with Saudi labor law. Here is the hiring process:
1. Find the Right Saudi Candidate: Begin by selecting a suitable Saudi national for the role. Hiring Saudi employees strengthens the company's Nitaqat score, increases the allowed workforce quota, and aligns with nationalization goals set by the government.
2. Create the Employment Contract on Qiwa: The employer logs into the Qiwa business account, prepares the contract using the platform's templates, and enters all required employee and job details in one streamlined process.
3. Candidate Reviews the Contract Online: The contract is automatically shared with the candidate through their Qiwa account. They have up to 10 days to review, approve, or request changes. If no action is taken within this period, the request expires.
4. Contract Activation and GOSI Registration: Once approved, the contract activates on the specified start date. The employee is automatically registered with GOSI, and the employer must add the individual to the organization's insurance policy.
5. Follow Trial Period Rules: The trial period must be clearly stated in the contract. During this period, contract authentication and insurance coverage remain mandatory. Termination within the trial period is permitted under Saudi labor regulations.
Hiring Non-Saudi Employees in Saudi Arabia
Employers who want to hire expatriates must follow specific compliance steps through the Qiwa platform. The process depends on whether the employee is already in Saudi Arabia or being recruited from abroad.
A. Hiring Non-Saudis Already in Saudi Arabia (Employee Transfer Service)
1. Establishment Requirements: The establishment must hold a valid commercial registration, comply with the Wage Protection System, maintain a Nitaqat rating of Medium Green or above, and ensure all employees have valid work permits. Sufficient funds must also be available on Ministry of Interior platforms such as Absher or Muqeem.
2. Employee Eligibility: The employee must already be working inside Saudi Arabia, must not be involved in another transfer request, and must not have a Final Exit Visa or a Final Exit Work Permit issued.
3. Transfer Options: Transfers can take place directly, after the employee's notice period ends, or with approval from the current employer, depending on the employee's employment situation.
4. Transfer Process on Qiwa: The employer logs into Qiwa, selects Employee Transfer, enters the employee's details such as Iqama number and date of birth, verifies eligibility, and submits the request. The employee must approve the transfer, and the employer is required to complete the final steps through Absher or Muqeem within 14 days.
B. Hiring Non-Saudis from Outside Saudi Arabia (Instant Work Visas)
1. Establishment Requirements: The establishment must maintain a valid commercial registration, ensure all existing employees have valid work permits, meet at least a Medium Green Nitaqat level, comply with the Wage Protection System and annual self-evaluation, and hold sufficient funds on Ministry of Interior platforms. Instant visas can only be issued when the recruitment quota is available.
2. Visa Types: Instant hiring can be done through three visa categories: permanent work visas for long-term employment, temporary work visas valid for up to three months, and seasonal Hajj or Umrah visas approved by the Ministry of Human Resources and Social Development.
3. Recruitment Quota: The recruitment quota is shared across Employee Transfer and Work Visa requests. Establishments can increase this quota by improving their Nitaqat rating or upgrading their tier, with temporary visa bundles available in packs of 1, 5, 10, or 50 visas.
4. Hiring Steps Through Qiwa: The process includes issuing a visa from the Qiwa recruitment quota, sharing the visa number with the foreign recruitment agency, preparing and signing the employment contract, issuing the Work Permit within 90 days of the employee's arrival, purchasing medical insurance, and completing the Iqama issuance through Absher.
As your Employer of Record (EOR) in Saudi Arabia, Tarmack hires employees and contractors on your behalf. Contact us for more details!
Payroll Cycle in Saudi Arabia
The payroll cycle in Saudi Arabia is monthly. The payment can also be made weekly on the mutual agreement.
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Social Security Contributions in KSA
Social security in Saudi Arabia is administered by the General Organization for Social Insurance (GOSI) and applies differently to Saudi nationals and non-Saudi employees. Contributions are calculated on the monthly base salary plus housing allowance, subject to minimum and maximum thresholds.
What Income Is Subject To GOSI?
- Contribution base: Base salary plus housing allowance (cash or in-kind). This base is used to compute monthly contributions for both employers and employees.
- Thresholds: Contributions apply only between the minimum SAR 1,500 and the maximum SAR 45,000 of the contribution base. Amounts below or above these limits are disregarded for calculation.
Contribution Rates
Below are the standard rates for employees in Saudi Arabia. For Saudi nationals, the total 21.5% is split between employee and employer. For non-Saudi employees, only the employer contributes to occupational hazard insurance.
Note: GOSI contribution rates for Saudi employees differ based on whether the employee was registered before or after July 3, 2024. New registrants face a phased increase in contribution rates for the annuities (pension) branch, starting in July 2025.
GOSI Contribution — Saudi Nationals (Registered Before July 2024)
| Contributor | Total % | Breakdown |
|---|---|---|
| Employee | 9.75% | • 9% Retirement Contribution • 0.75% Unemployment Insurance (SANED) |
| Employer | 11.75% | • 9% Retirement Contribution • 2% Compensation and disability contribution • 0.75% SANED |
| Combined Total | 21.5% | — |
GOSI Contribution — Saudi Nationals (First Registered After July 2024, Effective July 2025)
| Contributor | Total % | Breakdown |
|---|---|---|
| Employee | 10.25% | • Social insurance + SANED combined (new rate structure) |
| Employer | 12.25% | • Social insurance, occupational hazard insurance + SANED combined |
| Combined Total | 22.5% | — |
GOSI Contribution — Non-Saudi Employees (Expatriates)
| Contributor | Total % | Breakdown |
|---|---|---|
| Employee | 0% | - |
| Employer | 2% | • Occupational Hazard Insurance only |
| Combined Total | 2% | — |
GCC (Non-Saudi) nationals working in Saudi Arabia remain covered under their home country's social security scheme, in line with the GCC Unified Law of Insurance Protection Extension.
As your Employer of Record (EOR) in Saudi Arabia, Tarmack manages social security deductions and ensures timely, compliant payments to GOSI. Contact us to learn more.
Personal Income Tax in Saudi Arabia
- No individual income tax scheme: Salaries and wages earned by employees in Saudi Arabia are not subject to personal income tax.
- Non-employment income: If an individual earns income from business activities or investments, this is taxed at the entity or permanent establishment (PE) level, not as personal income.
- Non-residents: A non-resident person with no permanent establishment in Saudi Arabia who derives income from a Saudi source is subject to withholding tax (WHT) under corporate tax rules.
As your Employer of Record (EOR) in Saudi Arabia, Tarmack manages all statutory deductions and ensures compliant payments to the relevant tax authorities. Get started.
Saudi Arabia Payroll Compliance
1. Government Requirements
A. Registration Requirements
Every company operating in Saudi Arabia must register with the Ministry of Human Resources and Social Development (MHRSD). The process requires the Commercial Registration certificate, Articles of Association, Chamber of Commerce-verified signatures, and a valid business site license.
B. Ongoing Compliance Obligations
Businesses must stay compliant with Nitaqat rules and maintain proper employment contracts for both Saudi and non-Saudi staff.
- Nitaqat (Saudization) Requirements The updated Nitaqat thresholds, effective since 3 September 2017, set nationality quotas based on the company’s size and sector. Employers must monitor and meet these ratios through the Nitaqat portal on the MHRSD website.
- Employment Contracts Saudi law requires formal employment contracts for all workers and mandates that employee records, documents, and instructions be kept in Arabic.
- For expatriates, contracts must always be fixed-term. If a term isn't specified, the work permit validity automatically becomes the contract duration.
2. Pension Requirements
All companies must register with the General Organization for Social Insurance (GOSI) and then register every employee on the GOSI portal.
Saudi employees are registered from their joining date; non-Saudi employees are registered from the date their sponsorship transfers.
A. Ongoing Compliance Requirements
Companies must calculate and maintain End-Of-Service (EOS) benefit provisions for all employees—Saudi and non-Saudi—and report these amounts in their financial statements as per Saudi-endorsed IFRS.
Saudi employees receive pension benefits from GOSI after completing their service.
Non-Saudis are only covered for occupational hazards and do not receive pensions after retirement.
End-of-Service Benefits: Resignation
Below is how the EOS payout works when an employee resigns:
| Period of Service | EOS Benefit Payable |
|---|---|
| ≤ 2 years | No EOS benefit |
| > 2 years to < 5 years | One-third of the total EOS |
| 5 years to < 10 years | Two-thirds of the total EOS |
| ≥ 10 years | Full EOS benefit |
Termination / Contract End EOS Calculation
Below is how EOS is calculated when employment ends due to termination, contract maturity, or force majeure:
| Period of Service | EOS Benefit Calculation |
|---|---|
| ≤ 5 years from the date of joining | ½ × monthly gross salary × years of service |
| > 5 years from the date of joining | ½ month salary per year (first 5 years) + 1 full month salary per year (remaining years) |
According to the Saudi labor law, if an employee is terminated, the employer must clear the final settlement within one week of the contract ending. But if the employee resigns, the payout can take up to two weeks, after adjusting any pending work-related deductions.
B. General Organization for Social Insurance (GOSI)
Saudi employees contribute monthly social insurance based on their contributory wage (monthly basic salary + housing allowance + fixed commission).
- Minimum wage for calculation: SAR 1,500
- Maximum: SAR 45,000
Saudi Contribution Rate: 21.5%
- Employee: 9.75%
- Employer: 11.75%
(Covers pension, unemployment, and occupational hazard)
Expat Contribution: 2% (Employer only)
For occupational hazard insurance
- Wage range: SAR 400 - 45,000
- No pension benefit for expatriates
Eligibility for Saudi pension:
- Age 60+
- Not employed under any work subject to the pension scheme
- At least 120 months of contributions
GCC Nationals working in Saudi Arabia:
These rates apply to GCC nationals working in Saudi Arabia. Employers must deduct and remit contributions to the employee's home-country social insurance authority.
| Nationality | Employer's Share | Employee's Share |
|---|---|---|
| Bahrain | 9% | 8% |
| Kuwait | 9% | 9.5% |
| Oman | 9% | 7% |
| Qatar | 9% | 6% |
| UAE | 9% | 6% |
3. Employment Obligations
Saudi employers must provide a range of statutory leaves and benefits, including annual leave, sick leave, maternity leave, Hajj leave, public holidays, examination leave, bereavement leave, paternity leave, marriage leave, and overtime pay.
a) Hajj or Pilgrimage Leave: Employees who've completed two consecutive years with the employer and haven’t performed Hajj before can take 10–15 days of paid leave (including Eid Al-Adha). Employers may limit how many people take this leave each year based on business needs.
b) Eid Holidays: Employees are entitled to paid leave on both Eid-ul-Fitr and Eid-al-Adha, as defined under Saudi Labor Law.
c) Public Holidays: Two national public holidays are fully paid as per the Saudi Labor Law:
- Foundation Day - 22 February
- Saudi National Day - 23 September
d) Examination Leave: Employees enrolled in an educational institution get:
- Fully paid leave for exams of an unrepeated academic year
- Unpaid leave for exams in a repeated year
- They must apply 15 days in advance, and employers can request proof. If the employee didn't get approval to study, they may still take unpaid exam leave, deducted from annual leave days.
e) Bereavement Leave: Employees get 5 days of paid leave for the death of a spouse, parent, child, or grandparent.
f) Marriage Leave: Employees are entitled to 5 days of paid leave for their own marriage.
g) Overtime Rules: An employee is entitled to the following overtime benefits as mentioned in the Saudi Labor Law:
- Overtime hours are paid at an hourly wage + 50% of the basic hourly rate.
- Anything beyond the firm's standard weekly hours counts as overtime.
- All hours worked on official holidays or Eid days are treated as overtime.
4. Payroll Requirements
Wage Protection System (WPS): Every employer in Saudi Arabia must follow the WPS. All salaries and entitlements must be paid in Saudi Riyals, during working hours, and at the official workplace.
Payment Rules Under WPS
- Daily-paid workers: must be paid at least once a week.
- Monthly-paid workers: must be paid once every month.
- Piece-rate work (over 2 weeks): workers must receive a weekly payment based on completed work, and the remaining amount must be paid in the week after delivering the final output.
- Any other arrangement: wages must still be paid at least weekly.
5. Banking Requirements for Payroll
Under Saudi Arabia's WPS rules, all salaries must be paid through accredited Saudi banks. Employers must generate a bank upload file, process it through the bank portal, and download the resulting .txt file. This file is then submitted—without being opened—through the employer's Mudad account on the MHRSD portal to complete the compliance check.
Tarmack is your trusted Employer of Record (EOR) in Saudi Arabia, ensuring payroll is processed accurately and compliantly as per Saudi local labor laws. Get started!
Top Skills On Demand In KSA
Saudi Arabia's job market is shifting fast. Vision 2030 has pushed almost every industry to rethink how they hire, train, and build teams. And if you want your business to stay ahead, you've got to know which skills actually matter right now.
At Tarmack, we see these trends up close every day — here's what employers should really be paying attention to.
1. The Technical Skills That Are Driving Growth
- Programming & Digital Know-How: Python, Java, JavaScript — these are still the backbone of most digital projects. If someone can build, automate, or analyse, they're an asset.
- Cloud Expertise: More companies are moving to AWS, Azure, and Google Cloud, so talent that can manage or optimize cloud setups is in high demand.
- Cybersecurity: With digital growth comes more vulnerabilities. Businesses are actively looking for people who can protect systems, secure data, and keep operations running smoothly.
- Data & Analytics: Whether it's Power BI dashboards or predictive models, data-savvy professionals help leaders make smarter decisions.
- Industry-Specific Tech Skills:
- Healthcare is leaning into telemedicine.
- Finance is exploring blockchain.
- Manufacturing is going all-in on automation and Industry 4.0.
If your hiring strategy aligns with Vision 2030 — digital, sustainable, skill-driven — you'll stay competitive. And if you partner with Tarmack, we'll handle the compliance, payroll, onboarding, and the usual admin headaches — so you can focus on choosing the right talent, not dealing with paperwork.
Tarmack, as your Employer of Record (EOR) in Saudi Arabia, supports end-to-end recruitment in KSA. Contact us for your talent hiring needs and we'll help you build the right team.
Minimum Wage in Saudi Arabia
The minimum wage in Saudi Arabia has been fixed at SAR 4000 per month in the private sector.
Annual Bonus in Saudi Arabia
There is no legal provision for giving an annual bonus in Saudi Arabia. However, it is a common practice to give an annual bonus.
Health Benefits in Saudi Arabia
- Health benefits in Saudi Arabia are provided by the state government and employers.
- Arabian nationals get health benefits from the government, while employers provide health benefits from foreign employees and private sectors.
Working Hours and Overtime in Saudi Arabia
- Work hours: The standard work hours in Saudi Arabia are 8 hours per day and 48 hours per week. During the month of Ramzaan, Muslim employees are allowed to work only 6 hours per day.
- Break: An employee is entitled to take 30 minutes of break during continuous work hours. Friday is considered a break day in Saudi Arabia.
- Overtime: An employee must not work overtime exceeding 3 hours per day. The employer has to pay 150% of the regular salary for overtime. Female employees are prohibited to work evening shifts.
Leaves in Saudi Arabia
Sick Leave
- An employee is entitled to up to 60 days of sick leaves in Saudi Arabia. The first 30 days of leave are fully paid by the employer.
- The employer pays only 75% of the salary after 30 days.
Maternity Leave
- Female employees are entitled to 10 weeks of fully paid leaves if worked for more than 90 days with the same employer.
- 4-week leave must be given before childbirth and remaining after childbirth.
- It is paid by the employer.
Paternity leaves
- Male employees who have worked more than 90 days with the same employer are entitled to 3 days of paid paternity leave.
- It is given after childbirth.
Annual leaves
- Employees are entitled to 21 days of paid annual leave in their first 5 years of employment with the same employer.
- After 5 years of tenure with the same employer, 30 days of annual leave is granted.
Public Holidays (for the Calendar year 2024)
Some dates may vary based on official notifications and traditional calendars.
- New Year's Day - 1st January
- Founding Day - 22nd February
- Eid al-Fitr - 10th to 13th April
- Arafat Day - 15th June
- Eid al-Adha - 16th to 18th June
- Saudi National Day - 23rd to 24th September
Public Holidays (for the Calendar year 2025)
Some dates may vary based on official notifications and traditional calendars.
- New Year's Day - 1st January
- Founding Day - 22nd February
- Eid al-Fitr - 1st to 4th April
- Arafat Day - 5th June
- Eid al-Adha - 6th to 8th June
- Saudi National Day - 23rd to 24th September
Probation in Saudi Arabia
The probationary period in Saudi Arabia is of up to 90 days.
Termination in Saudi Arabia
Termination in Saudi Arabia is a complex process. An employee is terminated for the following reasons:
- Voluntary resignation by the employee
- On the expiration of the contract
- The inability of the employee to perform
- Dismissal on grounds of wrongful conduct like theft, etc.
- The employee must get a notice period of 30 days before the termination.
Severance Pay in Saudi Arabia
- An employee is entitled to get severance pay depending on the tenure with the same employer. On termination, the employee gets 15 days' salary for the first 5 years. After 5 years of tenure, the employee gets 1 month's salary for each year.
- Upon resignation, after 2 years the employee gets:
- 2 to 5 years -1/3rd of the monthly pay
- 5 to 10 years -2/3rd of the monthly pay
- More than 10 years -One month's pay
Employees or Contractors in Saudi Arabia
- The company pays a duty of payment of overhead surcharges if found guilty of misclassification of any employee.
- The company has to pay all the related interests and sanctions on the behalf of a misclassified employee.
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Frequently Asked Questions
What Is An Employer Of Record (EOR) In Saudi Arabia?
An Employer of Record Saudi Arabia, or EOR KSA, is a formally registered and authorized independent service provider that maintains the staff on behalf of international companies. Thus, you can hire and manage the employees in Saudi Arabia even if you do not have a local branch. The EOR takes care of all the formalities such as compliance, payroll, contracts, and government registrations, etc., and you can concentrate on business expansion.
What Is The Cost Of An Employer Of Record In Saudi Arabia?
The prices for Tarmack EOR Saudi Arabia services are clear and easy to plan for. It's $199 per employee each month and $39 per contractor each month. If you only need payroll support, it starts at $15 per employee per cycle. For further breakdowns, contact us.
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Social Security in Saudi Arabia