Understanding Employment Norms in Saudi Arabia: A Comprehensive Guide
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Hiring in Saudi Arabia? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Saudi Arabia.

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.
Saudi Arabia map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


The language of the agreement must be either Arabic or English. The translation of the contract into another language can be provided if asked. Saudi Arabia has three types of employment agreements:
  • Indefinite or open-term agreement: The indefinite agreement is offered to Arabic nationals only. Foreign employees are not hired under this agreement. It must be written in Arabic.
  • Fixed-term agreement: A foreign employee is hired exclusively under a fixed-term agreement. It can be renewed only three times. The agreement is considered indefinite if it is renewed after the third time. Also, if the employee continues to work after the expiration of the contract, it will be considered indefinite.
  • Temporary employment agreement: Contracts for services that are required for a short period are made under this. This employment may be available on a daily or weekly basis. However, the term of the employment must not be more than 90 days.
Onboarding Process

Onboarding Process

The hiring process in Saudi Arabia is as follows:
  • A job description is prepared by the HR teams. They collaborate with the unit that has a job vacancy.
  • The description is then uploaded on the official website of the company along with other platforms like LinkedIn.
  • Some companies may even publish job vacancies in local newspapers. The advertisement can remain for a couple of days to a week.
  • Candidates apply for the job by proving their eligibility. They are further shortlisted based on rounds of screenings and interviews.
  • Final shortlisted candidates then negotiate their terms and conditions with the employer. After the mutual agreement, the candidate is hired as an employee.


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.

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Minimum Wage

Minimum Wage

The minimum wage in Saudi Arabia has been fixed at SAR 4000 per month in the private sector.
Payroll Cycle

Payroll Cycle

The payroll cycle in Saudi Arabia is monthly. The payment can also be made weekly on the mutual agreement.
Annual Bonus

Annual Bonus

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

Health Benefits

  • 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

Working Hours and Overtime

  • 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.


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 2023)

  • New Year's Day (1st January)
  • Founding Day (22 Feb)
  • Eid al-Fitr (22-25 Apr)
  • Arafat Day (27 Jun)
  • Eid al-Adha (28-30 Jun)
  • Saudi National Day (23-24 Sep)

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Social Security

Social Security

Social security in Saudi Arabia includes social insurance, unemployment insurance, paid leaves, maternity leaves, and retirement benefits.
Taxes for Employers

Taxes for Employers

The Saudi national employers have to pay:
  • Occupational hazard -12%
  • Social insurance -9%
  • Unemployment insurance -1%
All Non-Saudi employers have to pay:
  • Occupational hazard -2%

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Taxes for Employees

Taxes for Employees

Employees who are Saudi nationals have to pay:
  • Social insurance -9%
  • Unemployment insurance -1%
Foreign employees have to pay:
  • Occupational hazard -2%
There are no income taxes in Saudi Arabia.


The probationary period in Saudi Arabia is of up to 90 days.

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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

Severance Pay

  • 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

Employees or Contractors

  • 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.
Final Words

Final Words

The Kingdom of Saudi Arabia is an arid country. It is one of the biggest suppliers of crude oil. The country's advanced economy and liberal labor laws attract investors globally. It has an 'easy' rank in the 'ease of business doing for index'. The country offers an excellent opportunity for businesses looking for expanding their outreach.

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