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Employer of Record in Saudi Arabia
Hire employees in Saudi Arabia through an Employer of Record (EOR) without setting up a local entity. This comprehensive guide explains Saudi Arabia's labour laws, payroll, taxes, benefits, and compliance requirements so you can build a compliant Saudi Arabia workforce with confidence.
What is an Employer of Record in Saudi Arabia?
An Employer of Record in Saudi Arabia is a third-party organisation that legally employs workers on behalf of foreign companies. The EOR takes full legal responsibility for the employment relationship under Saudi Arabia's law, while the client company directs the employee's daily work and performance.
This arrangement allows international businesses to hire Saudi Arabian professionals quickly and compliantly without establishing a local entity. It is particularly useful for startups, growing businesses, and enterprises exploring the Saudi Arabia market for the first time. The EOR manages all employment obligations, including contracts, payroll, tax filings, social contributions, benefits, and ongoing compliance with local labour laws.
Why Hire in Saudi Arabia?
Saudi Arabia is the largest country in the Arabian Peninsula with a population of approximately 35.3 million. Saudi has the world's largest oil reserves and Saudi Aramco is the world's most profitable company by revenue. Vision 2030 (launched 2016) is transforming the economy with megaprojects (NEOM USD 500B+ futuristic city, Red Sea tourism, Diriyah Gate, AlUla heritage tourism, Qiddiya entertainment) and rapid social reforms (women driving since 2018, entertainment, tourism, female workforce participation rising from 17% to 36%+). Riyadh is the rapidly-growing capital and economic hub.
Saudi Arabia has 0% personal income tax — a major attraction for expatriate workers. Total cost-to-employer for Saudis is approximately gross x 1.12-1.18 (GOSI 11.75-12.75%) plus EOSB accrual; for expats approximately gross x 1.07 (occupational hazards 2% + EOSB 1.5-3% accrual). The Saudization (Nitaqat) quota system is a major HR consideration — non-compliant employers face visa restrictions. Key 2026 changes include 180-day probation, structured resignation procedures via Qiwa, formalised remote work, and continued GOSI rate increases for the New System.
Top employers in Saudi Arabia include Saudi Aramco, SABIC, STC, Saudi National Bank, Al Rajhi Bank, Almarai, Saudi Telecom, Petro Rabigh, Saudi Electricity, Saudi Airlines, Public Investment Fund (PIF) and PIF portfolio companies (NEOM, Red Sea Global, Roshn, Qiddiya), Mobily, Zain Saudi, Saudi Aramco JVs, the Royal Saudi Armed Forces, and the public sector. Saudi law follows Islamic Sharia tradition; the Supreme Court is the apex court; Labour Courts handle workplace disputes; specialised Capital Market Authority and Saudi Central Bank (SAMA) oversee finance.
What Are the Quick Facts About Saudi Arabia?
Before hiring in Saudi Arabia, it helps to understand the basic country profile at a glance.
| Category | Details |
|---|---|
| Capital | Riyadh |
| Official Language | Arabic (sole official language); English widely used in business, oil and gas, banking; significant South Asian and Filipino expatriate communities |
| Currency | Saudi Riyal (SAR) |
| Time Zone | Arabia Standard Time (UTC+3) — no daylight savings |
| Population | Approximately 35.3 million; ~38% expatriate workforce |
| Status | Absolute monarchy and the largest country in the Arabian Peninsula; member of GCC, Arab League, OIC, OPEC, G20, UN, WTO; Vision 2030 economic diversification programme; significant Vision 2030 megaprojects (NEOM, Red Sea, Diriyah Gate); birthplace of Islam |
| Major Industries | Oil and gas (Saudi Aramco — world's largest oil company), petrochemicals (SABIC), banking and finance, construction (Vision 2030 megaprojects), tourism (NEOM, Red Sea, AlUla), entertainment, mining, technology and AI (Saudi National Strategy for Data and AI), defense, healthcare, retail |
| Workforce Profile | Diverse multilingual workforce; ~17 million in employment; ~38% expatriates from India, Pakistan, Bangladesh, Egypt, Yemen, Philippines; growing female participation under Vision 2030 (from 17% to 36%+ in 2024); Saudization (Nitaqat) policies set quotas; Riyadh, Jeddah, Dammam are key economic centres; KAUST and KFUPM produce technical talent |
What Are the Employment Laws in Saudi Arabia?
Employment relationships in Saudi Arabia are primarily governed by the Saudi Labor Law (Royal Decree No. M/51, with Royal Decree M/49 of 2026 amendments effective February 2026), Social Insurance Law (GOSI), Compulsory Health Insurance Law, Anti-Harassment Law, Wage Protection System (WPS) regulations via Mudad, Nitaqat (Saudization) framework, and the 2026 Labour Reforms. This legislation regulates every aspect of the employment relationship, including contracts, working hours, leave entitlements, termination procedures, and workplace rights.
Written employment contracts are mandatory in Saudi Arabia and must be drafted in Arabic (mandatory for legal validity); bilingual contracts (Arabic + English) commonly used; Arabic text governs. Every contract must specify the job description, salary, working hours, probation period, benefits, and termination terms. Both fixed-term and indefinite-term contracts are permitted under Saudi Arabia's law. Fixed-term contracts cannot exceed Up to 3 years for fixed-term contracts; for non-Saudi workers, default to 1 year if unspecified; renewable, including any renewals.
The standard probation period for most roles is capped at Up to 180 days (6 months) under 2026 amendments (extended from 90); must be expressly stated in the digital Qiwa contract; otherwise legal probation defaults to zero. During probation, either the employer or the employee may terminate the relationship with shortened notice as specified by law or the employment contract.
What Are the Working Hours and Overtime Rules in Saudi Arabia?
The standard workweek in Saudi Arabia is 48 hours per week (8 hours/day, 6 days); during Ramadan, 36 hours/week (6 hours/day) for Muslim employees (in practice often applied to all). The maximum weekly working time, including overtime, is 48 hours/week ordinary; up to 60 hours/week with overtime; 11 hours/day max. Rest periods and overtime premiums are also regulated by law.
| Factor | Standard |
|---|---|
| Standard Workweek | 48 hours per week (8 hours/day, 6 days); during Ramadan, 36 hours/week (6 hours/day) for Muslim employees (in practice often applied to all) |
| Maximum Weekly Hours | 48 hours/week ordinary; up to 60 hours/week with overtime; 11 hours/day max |
| Weekday Overtime Pay | +50% premium (i.e. 150% of base) for daytime overtime |
| Weekend/Holiday Overtime | +150% premium (250% of base / triple pay) for work on weekends and Eid public holidays |
| Night Work Premium | +50% for night shift work |
| Minimum Daily Rest | At least 30 minutes break for every 5 hours of consecutive work |
| Minimum Weekly Rest | At least 24 consecutive hours of weekly rest, normally Friday (Muslim rest day); some companies follow Friday-Saturday weekend |
What Leave Entitlements Apply in Saudi Arabia?
Saudi Arabia employees enjoy comprehensive leave entitlements, including annual leave, public holidays, sick leave, maternity leave, and paternity leave.
| Leave Type | Entitlement |
|---|---|
| Annual Leave | Minimum 21 working days per year for employees with 1+ year service; 30 days after 5 years of service |
| Public Holidays | Approximately 7-9 public holidays in 2026 (varies with Hijri calendar) |
| Sick Leave (Short-term) | 30 days fully paid sick leave per year; 60 days at 75% pay; 30 days unpaid; total up to 120 days/year with medical certificate |
| Sick Leave (Long-term) | Beyond 120 days, the employer may terminate with cause; GOSI long-term disability provisions may apply for Saudi nationals |
| Maternity Leave | 10 weeks (70 days) of paid maternity leave; can be split as 4 weeks before + 6 weeks after birth, or as needed by the mother |
| Maternity Pay | 100% of wage if employee has 3+ years service; 50% if 1-3 years; employer-paid |
| Paternity Leave | 3 days of paid paternity leave at the time of birth |
Public Holidays Observed: Founding Day (22 February — added in 2022 to commemorate the founding of the First Saudi State in 1727), Eid al-Fitr (4-5 days, variable Hijri), Eid al-Adha (4-5 days, variable Hijri), Saudi National Day (23 September — commemorating the unification of Saudi Arabia in 1932). Friday is the weekly rest day. Hijri-calendar holidays shift each Gregorian year. Saudi Arabia does NOT observe Christmas, Western New Year, or Islamic New Year as public holidays — a distinction from many other GCC countries.
What Is the Minimum Wage and Average Salary in Saudi Arabia?
Saudi Arabia has no universal statutory minimum wage. The SAR 4,000/month (~USD 1,067 / EUR 990) threshold applies to Saudi nationals in the private sector to count toward Nitaqat Saudization quotas (raised from SAR 3,000 in March 2021). For specific professions targeting Saudization, sector minimums apply: engineers SAR 8,000/month; accounting professions higher thresholds; marketing/sales SAR 5,500. Public sector Saudi minimum is SAR 5,000/month. Expatriates have NO statutory minimum wage; their compensation is governed by individual employment contracts. Average expat salaries range SAR 3,000-5,000/month for unskilled to SAR 30,000+ for senior professionals. Saudi has 0% personal income tax. Note: figures are indicative; an EOR confirms applicable Nitaqat sector thresholds, GOSI rates, and WPS compliance before contracting.
| Salary Category | Monthly Amount (SAR) | USD |
|---|---|---|
| Customer Support / BPO | SAR 4,000 - SAR 8,000 | Strong English/Arabic BPO sector; Riyadh, Jeddah |
| Junior Developer | SAR 8,000 - SAR 14,000 | Riyadh tech ecosystem; Saudi National Strategy for Data & AI |
| Mid-Level Software Engineer | SAR 14,000 - SAR 25,000 | Strong fintech, e-commerce, gaming |
| Senior Engineer / Architect | SAR 25,000 - SAR 50,000+ | Senior tech roles in Aramco IT, banking, NEOM |
| Compliance Officer (Banking) | SAR 18,000 - SAR 35,000 | SAMA-regulated; AML, sharia compliance |
| Senior Banker / Wealth Manager | SAR 30,000 - SAR 70,000 | Saudi National Bank, Al Rajhi, Riyad Bank, Saudi Awwal |
| Country Manager / Director | SAR 45,000 - SAR 120,000+ | International subsidiary management |
Salaries paid monthly in SAR by bank transfer through the Wage Protection System (WPS) via Mudad platform; mandatory for all private sector employers. WPS monitors timely payment electronically. Late or incorrect payment triggers automatic restrictions on new work permits. GOSI contributions remitted monthly to General Organization for Social Insurance. 13th-month salary is NOT mandatory but performance bonuses are common. Eid bonuses are widely customary. Saudi Arabia has 0% personal income tax — making it one of the most attractive destinations for expatriate workers globally. Senior expat packages typically include housing allowance (SAR 1,500-5,000/month), annual flight home, education for children, and health insurance.
How Do Taxes and Social Contributions Work in Saudi Arabia?
Saudi Arabia requires both employers and employees to contribute to social security, and personal income tax is withheld at source by the employer.
Employee Income Tax
| Monthly / Annual Income | Tax Rate | |
|---|---|---|
| All employment income | 0% — Saudi Arabia has NO personal income tax | |
| Capital gains | 0% — no capital gains tax for individuals | |
| Dividends | 0% — no dividend tax for individuals | |
| Wealth tax | 0% — no wealth or inheritance tax | |
| VAT | 15% standard rate (raised from 5% in July 2020) | |
| Zakat (Saudi nationals only) | 2.5% on certain assets — religious obligation | |
| Note | Tax-free regime is a major attraction for expatriate workers | Funded by oil revenues, VAT, zakat, and corporate income tax |
Social Security and Health Contributions
| Contribution Type | Employer | Employee | Total |
|---|---|---|---|
| GOSI (Existing System) — Employer | 11.75% | — | Pension 9% + Unemployment 0.75% + Occ Hazards 2% |
| GOSI (Existing System) — Employee | — | 9.75% | Pension 9% + Unemployment 0.75% |
| GOSI (New System Jan-Jun 2026) | 12.25% | 10.25% | Total 22.5% (after 0.5% July 2025 increase) |
| GOSI (New System Jul-Dec 2026) | 12.75% | 10.75% | Total 23.5% (after 0.5% July 2026 increase) |
| Non-Saudi (Occupational Hazards) | 2% | — | Employer only |
| Contribution cap | SAR 45,000/month | — | Basic + housing |
| End-of-Service Gratuity (Expats) | Half month/year (1-5 yrs); 1 month/year (5+ yrs) | — | Employer accrual |
Note: Contributions are calculated on gross salary up to a statutory ceiling where applicable. Rates are reviewed periodically.
What Are the Mandatory Employee Benefits in Saudi Arabia?
All employees in Saudi Arabia are entitled to statutory benefits under the labour code, and many employers add supplementary benefits to attract top talent.
| Mandatory Benefits | Common Supplementary Benefits |
|---|---|
| Paid annual leave | Private health insurance |
| Paid public holidays | Meal vouchers or allowance |
| Paid sick leave | Transportation allowance |
| Maternity and paternity leave | Performance bonuses |
| Social security coverage | Professional development budget |
| Health insurance | Flexible or remote work options |
| Pension contributions | 13th-month salary (some sectors) |
| Workplace safety protection | Stock options or equity |
How Do Termination and Severance Work in Saudi Arabia?
Termination rules in Saudi Arabia depend on the employee's tenure. The labour code strictly defines notice periods and severance pay.
Notice Periods by Tenure
| Length of Service | Notice Period |
|---|---|
| During probation (180 days from 2026) | Either party may terminate without notice |
| Indefinite contract — Resignation | 30 days written notice (employee) |
| Indefinite contract — Termination by employer | 60 days written notice |
| Senior management positions | Up to 3 months by contract |
| Termination for cause (Article 80) | Immediate; documented grounds required |
Severance Pay
| Years of Service | Severance Entitlement |
|---|---|
| End-of-Service Gratuity (Expats) | Half month basic salary per year for first 5 years; 1 month per year thereafter; capped at 2 years salary |
| Female employees terminating after childbirth/marriage | Full gratuity (special provision) |
| Wrongful dismissal | Compensation up to 2 months wages awarded by Labour Court; reinstatement possible |
| Mutual agreement (resignation via Qiwa) | By negotiation; structured 30-day employer response process |
| Saudi nationals | GOSI pension upon retirement; no employer EOSB |
Legal Grounds for Termination
Employment in Saudi Arabia can be terminated by mutual agreement, voluntary resignation, the natural expiration of a fixed-term contract, just cause due to serious misconduct, or economic and organisational reasons, with proper notice.
Protected Categories
Saudi Arabia labour law offers special protection against termination for pregnant employees, employees on maternity or paternity leave, employees on sick leave, and trade union representatives.
What Are the Work Permit and Visa Requirements in Saudi Arabia?
Saudi Arabia's work-permit framework requires non-Saudi nationals to obtain a work permit and Iqama (residence permit) through the Ministry of Human Resources and Social Development (MHRSD) via the Qiwa platform. Permits are tied to Nitaqat (Saudization) quotas — companies in lower Nitaqat categories face restrictions on new visas. The MHRSD has digitised most processes via Qiwa, Mudad (WPS), Musaned, and the GOSI portal, with API integrations enabling automated compliance.
| Permit Type | Purpose | Issuing Authority |
|---|---|---|
| Work Permit + Iqama (Residence) | Required for all non-Saudi nationals; employer applies via Qiwa platform; quota-based per Nitaqat | Ministry of Human Resources and Social Development (MHRSD) + Jawazat |
| GCC Citizens | Limited free movement; some restrictions; standard employment rules apply | MHRSD |
| Premium Residency | 'Saudi Green Card' for high-net-worth investors and special-category foreigners | Premium Residency Center |
| LinkedIn-style Self-Sponsored Visa | Special workers visa categories | MHRSD |
| Investor / Founder | For foreign investors; MISA license | Ministry of Investment |
| Domestic Worker | Specific category via Musaned platform | Musaned |
Processing typically takes Standard work visa + Iqama: 4-12 weeks depending on Nitaqat status of the employer; Premium Residency: longer; Saudi requires medical examination, security clearance, and contract attestation. Companies in Platinum/Green Nitaqat zones get expedited processing., depending on documentation and administrative workload. Saudi Arabia is NOT a member of the EU. Saudi is a member of the GCC (with Bahrain, UAE, Kuwait, Qatar, Oman), Arab League, OIC, OPEC, G20, UN, and WTO. The Saudi Riyal (SAR) is pegged to the USD at ~3.75. Vision 2030 is the major economic diversification programme launched in 2016 transforming the economy and labour market. EU/EEA citizens require a work permit under standard expatriate rules.
How Do You Hire in Saudi Arabia Through an EOR?
The hiring process through an Employer of Record typically follows five clear stages, from candidate selection to ongoing compliance management.
| Step | Action | Responsibility |
|---|---|---|
| 1 | Identify and select the Saudi Arabia candidate | Client company |
| 2 | Engage an EOR and sign a service agreement | Client + EOR |
| 3 | Issue a written Arabic (mandatory for legal validity); bilingual contracts (Arabic + English) commonly used; Arabic text governs-language contract | EOR (legal employer) |
| 4 | Register the employee with tax and social security | EOR |
| 5 | Process monthly payroll and maintain compliance | EOR |
Should You Set Up a Local Entity in Saudi Arabia Instead?
For companies with significant long-term investment plans in Saudi Arabia, establishing a local entity may be a viable alternative to using an EOR.
| Entity Type | Description | Best For |
|---|---|---|
| Limited Liability Company (LLC) | Most common; minimum capital varies by activity; foreign founders welcome with MISA license | Trading, services, IT, manufacturing |
| Joint-Stock Company (JSC) | Public or closed; minimum capital SAR 500,000+ | Banks, insurers, listed companies |
| Branch / Representative Office | MISA license required; foreign HQ has full liability | Foreign banks, insurers |
| Special Economic Zones (NEOM, KAEC, etc.) | Tax incentives for qualifying sectors | Tech, logistics, manufacturing |
| Foreign-owned 100% (recently liberalised) | Permitted in most sectors with MISA license | Most foreign companies |
| Branch via EOR | Compliant hiring without setting up Saudi entity | Foreign companies hiring 1-50 staff |
Setting up a Saudi LLC requires MISA (Ministry of Investment) license (2-6 weeks), Commercial Registration via the Ministry of Commerce (2-4 weeks), GOSI registration, Qiwa registration, Saudization (Nitaqat) classification review, and bank account opening — totalling 8-16 weeks. Vision 2030 reforms have liberalised foreign ownership in most sectors. For most companies hiring fewer than 30 employees, engaging an Employer of Record is dramatically faster: 5-10 business days versus 8-16 weeks for full entity setup.
EOR vs Local Entity vs Contractor — Which Is Right for You?
Comparing the three main hiring models helps you choose the right approach for your Saudi Arabia workforce.
| Factor | Employer of Record | Own Legal Entity | Freelancer / Contractor |
|---|---|---|---|
| Setup Time | 5-10 business days from signed engagement letter to first compliant payroll cycle and Qiwa contract registration | Several weeks to months | Immediate |
| Setup Cost | Low | High | Very low |
| Compliance | Handled by EOR | Your responsibility | Misclassification risk |
| Statutory Benefits | Fully provided | Must manage yourself | Typically none |
| Control Over Staff | High | Full | Limited |
| IP Protection | Strong | Strong | Often weak |
| Best For | Small to medium teams | Long-term major presence | Short-term specialists |
What Common Hiring Mistakes Should You Avoid in Saudi Arabia?
Companies new to hiring in Saudi Arabia often encounter several common pitfalls. Misclassifying employees as independent contractors is a significant risk, as Saudi Arabia has clear legal distinctions between the two, and reclassification can lead to penalties and back payments.
Failing to issue written employment contracts in Arabic (mandatory for legal validity); bilingual contracts (Arabic + English) commonly used; Arabic text governs is another frequent error, as verbal or foreign-language agreements may not be legally enforceable. Ignoring collective bargaining agreements in regulated sectors can lead to compliance issues, as can miscalculating social security contributions since rates and ceilings are periodically updated.
Skipping proper documentation of probation periods can inadvertently extend employee protections beyond what the employer intended. Finally, providing inadequate notice of termination or failing to follow proper dismissal procedures can expose companies to compensation claims and legal disputes.
Which Industries Are Hiring Most in Saudi Arabia?
Several key industries drive Saudi Arabia's labour market, each offering a distinct talent pool for international employers.
| Industry | Key Roles | Talent Highlights |
|---|---|---|
| Oil & Gas | Petroleum Engineer, Reservoir Engineer, Refining Engineer, Drilling Specialist | Saudi Aramco (world's largest oil company by revenue), SABIC, Aramco JVs |
| Banking & Financial Services | Banker, Compliance Officer, Risk Manager, Wealth Manager, Sharia Auditor | Saudi National Bank (SNB), Al Rajhi, Riyad Bank, Saudi Awwal Bank, Banque Saudi Fransi, Saudi Investment Bank |
| Construction & Megaprojects | Civil Engineer, Project Manager, Architect, Construction Manager | NEOM, Red Sea Project, Diriyah Gate, AlUla, Qiddiya, Roshn; Bechtel, Saudi Binladin Group, Al Khodari |
| Petrochemicals | Process Engineer, Production Manager, Quality Specialist | SABIC, Saudi Kayan, Petro Rabigh, Yanbu, Jubail industrial cities |
| Telecommunications | Network Engineer, RAN Specialist, Cloud Architect, 5G Specialist | stc, Mobily, Zain Saudi |
| Tourism & Hospitality (growing under Vision 2030) | Hotel Manager, Tour Operator, Hospitality Director | Red Sea Resorts, Diriyah Gate hotels, AlUla heritage tourism, Saudi Tourism Authority |
| Information Technology | Software Engineer, Cloud Architect, Cybersecurity, AI/ML Specialist | Aramco Digital, NEOM Tech, STC Solutions, growing tech ecosystem |
| Defense & Aerospace | Defense Engineer, Aerospace Engineer, Project Manager | SAMI (Saudi Arabian Military Industries), Lockheed Martin/Boeing JVs |
Are you an Employer of Record (EOR) provider looking to expand your reach in Saudi Arabia?
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Our audience includes businesses, startups, and HR professionals actively exploring hiring solutions in Saudi Arabia and Persian Gulf / GCC / G20 — giving your brand direct access to decision-makers ready to expand their teams.
By partnering with us, you can:
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Saudi Arabia is becoming an attractive destination for global hiring — making it a strong opportunity for EOR providers.
Disclaimer
This guide is provided for educational and informational purposes only. Saudi Arabia's labour laws, tax rates, and social contribution percentages are subject to change. Always consult a qualified Employer of Record provider, local legal counsel, or certified tax advisor before making hiring or employment decisions in Saudi Arabia.
Saudi Arabia
Hiring in Saudi Arabia requires a clear understanding of local labour laws, payroll obligations, and statutory benefits. Our country-specific guide for Saudi Arabia helps employers navigate salary expectations, GOSI social insurance contributions, Saudization (Nitaqat) requirements, working hours, leave entitlements, end-of-service gratuity, and termination rules under the Saudi Labour Law.
Whether you're recruiting healthcare professionals in Riyadh, hospitality and retail staff in Jeddah and Mecca, or construction, oil and gas, and manufacturing workers across Dammam, Medina, Khobar, Tabuk, Abha, and the NEOM region, AtoZ Serwis Plus ensures every hire is fully compliant with Saudi regulations.
From employment contracts and work visas (including iqama and block visa processes) to onboarding and ongoing HR support, we help you make data-driven hiring decisions and avoid costly compliance mistakes — so you can build a reliable, locally compliant workforce across all 13 provinces of Saudi Arabia.
