EMPLOYER OF RECORD IN SAUDI ARABIA
Expand your orbit in Saudi Arabia.
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Saudi Arabia at a glance
Currency, Saudi Arabian Riyal, SAR (ر.س, ﷼)
SAR
Population (41st largest)
35.35M
Economy/GDP (17th largest)
$1.54T
What it’s like to hire in Saudi Arabia?
- Saudi Arabia remains in the world’s top twenty economies and accounts for 25% of the Arab GDP. The country’s economy is oil-based, possessing about a quarter of the world’s oil reserves. It holds a significant responsibility in the Organization of the Petroleum Exporting Countries (OPEC).
- Saudi Arabia has the largest population in the Persian Gulf region. Half of the Saudi population is under 25 years of age. The country’s populace is one of the fastest growing in the world.
- Saudi Arabia introduced its 2030 program, which has strongly intensified the country’s economic diversification efforts, by investing in Saudi public health, education, infrastructure, and tourism.
- Saudi Arabia’s education system molds its youth to be prepared and well-developed for international business by requiring English as a second language in schools. The Saudi business world primarily speaks English.
Wages and Salaries in Saudi Arabia
- As of 2022, the minimum wage in Saudi Arabia is SAR4,000 (USD1,065) per month for public sector employees. There is no minimum wage for the private sector. The last time that Saudi Arabia increased their minimum wage was in 2013.
Leave Entitlements in Saudi Arabia
- Saudi Arabia’s Labor Law guarantees employees annual paid leave of 21 days once they have completed a full year of employment. After five years of continuous employment with an employer, employees receive a minimum of 30 days of annual leave in Saudi Arabia.
Employment Benefits in Saudi Arabia
Saudi Arabia’s government benefits programs are administered by the Ministry of Human Resources and Social Development and the General Organization for Social Insurance (GOSI). The Ministry was established in 2019 after the merging of the Ministry of Civil Service with the Ministry of Labor and Social Development. The Ministry administers the country’s social protection system which includes survivor benefits, short-term disability, long-term disability, unemployment benefits, and paid leave entitlements. GOSIA collects contributions from employers and employees to maintain the Saudi Arabian Social Security scheme, which maintains old-age pensions.
Tax and Social Security in Saudi Arabia
- There is no income tax for employees in Saudi Arabia.
- Saudi employees pay 10% of their salary towards social security for the General Organization for Social Insurance (GOSI). Non-Saudi employees do not pay social security contributions.
- Non-employment income is taxed as a permanent establishment. A non-resident without a permanent establishment, who receives income from within Saudi Arabia, is taxed based upon withholding tax regulations. Depending on the service and if the beneficiary is a related party, the tax rates range from 5%, 15%, and 20%. The withholding tax must be paid within the first ten days of the month, after the month where the payment was received.
- The Saudi Arabian General Authority of Zakat and Tax (GAZT) collects Zakat and taxes. The GAZT issues companies a certificate as proof of payment since it’s a prerequisite for operating in Saudi Arabia. Zakat base calculation varies by income and the income year is based on the lunar calendar. Zakat requires special consideration from professional assistance.
- The domestic withholding tax rate is 5% on dividends, 5% on interest, and 15% on royalties.
- The corporate income tax rate in Saudi Arabia is 25%.
Payroll in Saudi Arabia
An employer of record in Saudi Arabia removes the hassle of trying to navigate payroll laws so you can focus on your team.
- There is no income tax in Saudi Arabia. However, there is withholding tax. The withholding tax must be paid within the first ten days of the month, after the month the payment was received.
Calculate payroll contributions in Saudi Arabia
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Why Work in Saudi Arabia?
Saudi Arabia is located in southwestern Asia. The Persian Gulf borders the country to the east and the Red Sea borders the west. Saudi Arabia is the only country in the world with a coastline along the Persian Gulf and Red Sea. It has the largest economy in the Middle East and the largest population in the Persian Gulf region.
It’s a clever calculation to incorporate Saudi Arabia as an international business partner, since the country contains roughly a quarter of the world’s oil reserves, half of the population is under 25 years of age, and English is commonly spoken. The Saudi workforce is developed to prosper in international business.
Those searching for reasons to work and live in Saudi Arabia can look forward to an income tax-free salary, a lower cost of living compared to other Middle Eastern countries, one of the lowest global crime rates, warm weather year round, and a spiritually rich culture. Saudis share cultural values influenced by Islam including strong family relationships, tradition, generosity, and hospitality.
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Saudi Arabia at a glance
SAR
Currency, Saudi Arabian Riyal, SAR (ر.س, ﷼)
35.35
1.54
Economy/GDP (17th largest)