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Saudi Riyal (SAR)
EOR IN Saudi Arabia
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A guide to employing and growing your team in Saudi Arabia
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Saudi Arabia is currently undergoing a massive economic and social transformation under Vision 2030. The labor market is governed by the Saudi Labor Law, with major updates in 2025 and 2026 aimed at enhancing transparency and digitizing the workforce through platforms like Qiwa and GOSI. A key feature of employment here is the Saudization (Nitaqat) program, which requires companies to meet specific quotas for hiring Saudi nationals. As of 2026, the minimum wage for Saudi nationals in the private sector is SAR 4,000 per month, whereas there is no statutory minimum wage for expatriates, whose pay is determined by their individual employment contracts.
Employer Contributions
GOSI (Saudi Nationals – Registered after July 2024): 12.75% (Includes pension, unemployment/SANED, and occupational hazards)
GOSI (Saudi Nationals – Legacy System): 11.75%
GOSI (Expatriates): 2.0% (Covers occupational hazards only)
Total Employer Contribution: 2% (Expatriates) to ~12.75% (New Saudi hires)
Employee Payroll Taxes
GOSI (Saudi Nationals – Registered after July 2024): 10.75%
GOSI (Saudi Nationals – Legacy System): 9.75%
Expatriates: 0%
Total Employee Contribution: 0% (Expatriates) to ~10.75% (Saudi nationals)
Employee Income Tax Rates
Saudi Arabia does not impose a personal income tax on employment salaries, wages, or allowances for any individuals, regardless of their nationality or residency status.
Saudi and GCC Nationals: 0% Income Tax. They are subject to Zakat (a religious levy of 2.5% on qualifying assets), but this is not a tax on their monthly employment income.
Expatriates: 0% Income Tax. While salaries are tax-free, expatriates are subject to the “Dependent Fee” of SAR 400 per month for each dependent living with them in the Kingdom.20%
Statutory Leave
Employees are entitled to a minimum of 21 days of paid annual leave, which increases to 30 days after five consecutive years of service. Saudi Arabia observes several public holidays, including Eid al-Fitr, Eid al-Adha, and the Saudi National Day. Additionally, Muslim employees who have completed two years of service are entitled to a one-time Hajj Leave of 10 to 15 days to perform the pilgrimage.
Pregnancy and Maternity Leave
Under the 2026 Labor Law updates, maternity leave has been extended to 12 weeks of fully paid leave. Six weeks are mandatory immediately following delivery, while the remaining six weeks can be distributed flexibly by the employee starting four weeks before the expected delivery date. Employees may also extend this leave by one additional unpaid month.
Paternity Leave
Married male employees are entitled to 3 days of fully paid paternity leave per birth. This is a standard benefit across the private sector to support new fathers during the first days of their child’s life.
Work-Related Injury Leave
Sick Leave: Employees are entitled to up to 120 days of sick leave per year (30 days at full pay, 60 days at 75% pay, and 30 days unpaid).
Marriage Leave: 5 days of paid leave.
Bereavement Leave: 5 days for the death of a spouse, parent, or child.
Waiting Period Leave: Muslim female employees whose husbands pass away are entitled to paid “Iddah” leave for 4 months and 10 days.
Termination Process
Termination must be based on a “legitimate reason.” For fixed-term contracts, the contract naturally expires unless renewed. For indefinite contracts, termination for a non-legitimate reason requires the employer to pay compensation, typically 15 days’ salary for every year of service. All terminations and final settlements are managed through the Qiwa platform to ensure legal compliance and the payment of the End of Service Benefit (ESB).
Notice Period
Notice requirements for indefinite contracts depend on the party initiating the termination. If an employer terminates an employee on a monthly salary, they must provide 60 days’ notice. If an employee resigns, they must provide 30 days’ notice. For employees not paid on a monthly basis, the notice period is 30 days for both parties. Employers may choose to provide pay in lieu of the notice period.
Probation Period
The standard probation period must be clearly stated in the contract and cannot exceed 90 days. However, this can be extended to a maximum of 180 days if both parties agree in writing. During this window, either party can terminate the contract without notice or severance pay unless the contract specifies otherwise.