Employer of Record (EOR) Saudi Arabia

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Globaine takes care of all compliance matters, including payroll, taxes, and legal obligations, while providing seamless hiring processes. Our platform ensures that every aspect of employee management in Saudi Arabia is handled efficiently and in full compliance with local regulations.

Fast Time-To-Hire

Onboard employees in as little as 12 hours.

Cost-Efficient

The most affordable solution on the market, saving you time and money.

Compliant Contracts

We draft bilingual contracts compliant with Saudi Arabia's labor law.

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Hire not just in Saudi Arabia, but in over 180 countries through our global platform, allowing you to grow internationally without entity setup. Globaine’s team provides the local expertise you need to ensure every hire is compliant, efficient, and hassle-free.

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HIRING

in Saudi Arabia

In Saudi Arabia, a valid employment contract must be written and signed by both the employer and the employee before the commencement of work. The contract must specify the job title, job responsibilities, salary, allowances (such as housing and transportation), working hours, probation period (if any), and leave entitlements. It must be drafted in Arabic to be legally enforceable, though a bilingual version can be provided for clarity with expatriates.

A written contract is always mandatory in Saudi Arabia, regardless of the employee’s nationality or job role. The absence of a written agreement can lead to legal complications, as oral agreements are not considered valid under Saudi labor law.

Salaries in Saudi Arabia must be stated in Saudi Riyals (SAR) and broken down into their components, such as basic salary, housing allowance, and transportation allowance. It is essential to mention whether the salary is gross or net of deductions. For expatriate workers, the contract should clarify any additional benefits, such as relocation allowances or annual flight tickets.

In Saudi Arabia, contracts often include a non-compete clause to prevent employees from working with competitors after termination, provided it is reasonable in scope and duration. Probation periods, confidentiality agreements, and details about end-of-service benefits (EOSB) are also crucial and should align with Saudi labor laws.

ONBOARDING

in Saudi Arabia

1. What are the key requirements for onboarding employees in Saudi Arabia?

Onboarding employees in Saudi Arabia involves ensuring they meet legal and administrative requirements. For Saudi nationals, registration with the General Organization for Social Insurance (GOSI) is mandatory. For expatriates, the employer must obtain a work visa, iqama (residency permit), and medical insurance. Employees also need a local bank account for salary payments, as required by the Wage Protection System (WPS).

2. When are medical checks required for employment in Saudi Arabia?

Pre-hire medical checks are mandatory in Saudi Arabia, especially for roles in healthcare, food services, and construction. The medical check ensures that employees are fit for their roles and complies with the Kingdom’s public health and safety regulations.

3. What documents are essential for onboarding in Saudi Arabia?

Employees must provide a signed employment contract, a valid passport (for expatriates), their iqama or national ID (for Saudi nationals), and any required academic or professional certificates. Employers must also document the employee’s GOSI registration and, for expatriates, their work visa details.

PAYROLL

in Saudi Arabia

Payroll in Saudi Arabia typically includes a basic salary, housing allowance (often 25% of the basic salary), and transportation allowance. Salaries must be paid in Saudi Riyals (SAR) and transferred to the employee’s local bank account. Employers must also account for any mandatory GOSI contributions and deductions.

Remote employees in Saudi Arabia should receive the same payroll benefits as on-site employees. Remote employees must have a clear, legal employment agreement, and their payroll should comply with Saudi labor laws. As remote workers are still subject to Saudi labor regulations, their payroll will be processed similarly to on-site employees.

While Saudi Arabia does not have a fixed national minimum wage for all employees, the general expectation is that local employees (Saudi nationals) should receive at least SAR 4,000 per month. For foreign workers, salaries vary greatly depending on the industry.

Saudi Arabia does not mandate a 13th-month salary, but many employers offer a bonus during major holidays (like Eid al-Fitr or Eid al-Adha). If this is the case, it should be specified in the employment contract.

TAXES

in Saudi Arabia

1. What are the income tax rates in Saudi Arabia?

In Saudi Arabia, employees do not pay any personal income tax, whether they are Saudi nationals or expatriates. However, Saudi employees are required to contribute 10% of their gross salary to the General Organization for Social Insurance (GOSI) for social security. Expatriate employees are exempt from GOSI contributions.

2. How does the tax system apply to non-residents in Saudi Arabia?

Non-residents are not subject to personal income tax but may be subject to the expat levy, which is determined by the number of non-Saudi employees in the company.

3. When should tax returns be submitted in Saudi Arabia?

In Saudi Arabia, individuals, including employees, are not required to file personal tax returns as there is no personal income tax. However, businesses must submit Zakat or corporate tax returns annually, typically within 120 days of the end of their financial year. Employees only need to ensure compliance with GOSI contributions.

4. What social security contributions are required in Saudi Arabia?

In Saudi Arabia, Saudi employees contribute 10% of their salary to the General Organization for Social Insurance (GOSI), while employers contribute 12%. For expatriate employees, employers pay a 2% GOSI contribution for occupational hazard insurance, and the employees themselves are exempt from contributions.

LEAVE

in Saudi Arabia

In Saudi Arabia, employees are entitled to a minimum of 21 days of paid annual leave after one year of service. This increases to 30 days after five years of continuous service. Public holidays are in addition to annual leave entitlements.

In Saudi Arabia, employees can start using their accrued annual leave after completing one year of continuous service. During the first year, employees accrue 21 days of leave, but they can only take it once the one-year mark is reached. Employers and employees should agree on the timing of the leave.

In Saudi Arabia, female employees are entitled to 10 weeks of paid maternity leave, with at least 4 weeks taken before childbirth. Male employees are entitled to 3 days of paid paternity leave, typically taken within the first week after childbirth. Both leave entitlements are subject to specific employment contract terms.

In Saudi Arabia, employees are entitled to 13 paid public holidays, including major holidays like Eid al-Fitr, Eid al-Adha, and Saudi National Day. These holidays are set by the government and may vary slightly each year. Employers are required to grant these days off, though specific industries may have exceptions.

BENEFITS

in Saudi Arabia

1. What benefits are mandatory in Saudi Arabia?

In Saudi Arabia, mandatory benefits include medical insurance for employees and their dependents, and end-of-service benefits (EOSB), which are calculated based on years of service. Saudi employees must also have 10% of their salary contributed to GOSI for social security. Expatriates are covered for occupational hazards, with employers contributing 2% to GOSI on their behalf.

2. How is the home office allowance structured in Saudi Arabia?

In Saudi Arabia, the home office allowance is not a mandatory benefit by law. However, employers may provide it to remote employees to cover expenses like internet and electricity. If offered, the allowance should be clearly stated in the employment contract, and the amount is typically tax-exempt if it meets the necessary conditions.

3. When should meal allowances be provided in Saudi Arabia?

In Saudi Arabia, meal allowances are not legally required but are commonly provided by employers as a benefit. If offered, meal allowances are typically provided for employees who work more than 5 hours per day, with a daily cap set by the employer. These allowances are often tax-free if they meet the regulatory conditions.

 

4. What additional benefits are common in Saudi Arabia?

In Saudi Arabia, additional benefits often include private health insurance, transportation allowances, and housing support, which are commonly offered to attract and retain employees. Some employers also provide annual flight tickets for expatriates, education allowances, and performance bonuses. These benefits are not legally mandated but are competitive perks in the job market.

TERMINATIONS

in Saudi Arabia

In Saudi Arabia, the standard notice period for termination depends on the employee’s length of service. For employees with less than 2 years of service, the notice period is typically 30 days; for those with 2 to 5 years of service, it’s 60 days; and for employees with more than 5 years of service, it’s 90 days. The notice period can vary depending on the employment contract.

Yes, employees can be terminated without notice in Saudi Arabia under specific circumstances, such as gross misconduct, criminal activity, or violation of the terms of the employment contract. During the probationary period, either party can terminate the employment without notice. However, wrongful termination can result in legal consequences for the employer.

In Saudi Arabia, severance pay (end-of-service benefits) is calculated based on the employee’s length of service. For the first five years, employees are entitled to half a month’s salary for each year of service, and for any service beyond five years, they receive a full month’s salary for each additional year. Severance pay is paid in addition to any accrued leave.

In Saudi Arabia, mutual termination occurs when both the employer and employee agree to end the employment contract without legal consequences. This agreement must be documented in writing, and both parties must consent to the terms of termination. Typically, no severance pay is required if the employee voluntarily agrees to leave, unless stipulated in the contract.

FAQs

Globaine ensures full compliance with Saudi Arabia’s labor laws by handling all legal requirements, including work permits, contracts, and social security contributions through GOSI. We stay updated with local regulations to ensure your business avoids any legal complications.

By using Globaine’s EOR solution, you save on the costs of setting up a local entity, legal fees, and administrative overhead. The EOR also eliminates the need for hiring local experts, reducing operational costs and compliance risks.

Globaine guarantees quick onboarding by utilizing a streamlined process that includes pre-established agreements, automated systems for document management, and a local expert team ready to onboard employees efficiently.

Yes, Globaine handles complex employment scenarios, including drafting bilingual contracts compliant with Saudi labor law and managing terminations in accordance with legal guidelines, ensuring smooth transitions for both employers and employees.

Without an EOR, the key risks include non-compliance with labor laws, mishandling of employee benefits, and financial penalties. Globaine mitigates these risks by taking responsibility for compliance, ensuring that all legal and contractual requirements are met.

 
Employer of Record (EOR) Saudi Arabia

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