Saudi Arabia
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Introduction
General Overview & Economic Facts
- Saudi Arabia, officially the Kingdom of Saudi Arabia, is a country located in the western region of Asia
- It has a population of about 38,401,00 and covers an area of approximately 2,150,000 km2 (830,000 sq2)
- Its economy ranks 18th by nominal GDP (2022) and 12th by PPP (2022)
- Saudi Arabia ranks 37th on the HDI (2021). Saudi Arabia is well developed in terms of human development with expansive social services including public health, education, electrification and access to clean drinking water
Why Employ In Saudi Arabia?
- The main exports from Saudi Arabia include petrochemicals, plastics, construction materials and electrical appliances
- 15.38% of the population is between the ages of 15 and 24 years, with 50.2% of the population being between the ages of 25 and 54. Saudi Arabia has a mix of a fairly mature population making it a favourable country to hire more experienced employees
Overview Of The Labour Law
- The labor law in the Kingdom of Saudi Arabia (KSA) is mainly regulated by the Labour Regulation. The Civil Code is also applicable to some employment agreements
- The labour regulations address minimum wage, working conditions, leave and termination of employment
- Labor laws are strongly characterised by the ‘Saudisation program’ which aims to increase the number of Saudi local employees and reduce the rate of foreign employees
Fun Country Facts
- Saudi Arabia is mostly desert, but imports sand for glass making and construction
- Saudi Arabia exports more petrol than any other country in the world
- Saudi Arabia is the largest country in the world without a river
Why Use Playroll Services For Saudi Arabia?
- Employing in Saudi Arabia requires companies to have their own legal entity in the country as well as to manage payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Saudi Arabia
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Unemployment Insurance (SANED)
Calculated on a minimum salary of SR 1,500.00 and a maximum salary of SR 45,000.00
1.00%
Medical Insurance
For non – Saudi employees and dependents
Premium 1.1 SR 6,500.00
Classic 1.1 SR 3,500.00
Essential 1.1 SR 2,700.00
For non – Saudi spouses
Premium 1.1 SR 8,500.00
Classic 1.1 SR 4,500.00
Essential 1.1 SR 3,700.00
Social Insurance
Not applicable to non-Saudi employees.
Calculated on a minimum salary of SR 1,500.00 and a maximum salary of SR 45,000.00
9.00%
Occupational Hazard
Calculated on a minimum salary of SR 1,500.00 and a maximum salary of SR 45,000.00
2.00%
Cost of Air Ticket
Employers must bear the airfare of the workers from home country to Saudi Arabia for joining work and for their return after completion of the contract period
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Unemployment Insurance (SANED)
Not applicable to non-Saudi employees
Calculated on a minimum salary of SR 1,500.00 and a maximum salary of SR 45,000.00
1.00%
Social Insurance
Not applicable to non-Saudi employees
Calculated on a minimum salary of SR 1,500.00 and a maximum salary of SR 45,000.00
9.00%
Tax Income
Not applicable to GCC Nationals
Income tax is not imposed on an individual’s earnings if they are only derived from employment in Saudi Arabia
20%
Employment Terms
General
Minimum Wage
- Non-Saudi employees – SR 2,500.00 per month
- Saudi employees – SR 4,000.00 per month
Working Hours
- Maximum of 8 hours per day and 48 hours per week
- Minimum 30-minute meal interval – if working time is 5 or more hours
- Typical working hours vary, ranging from 7h30 – 8h00 until 12h00, then from 15h30pm – 16h00 until 19h00 – 20h00
Overtime
- Employees may work a maximum of 481 hours per year and no more than 10 hours per day
Notice Period
- Employees paid monthly – 60 days’ notice
- Employees paid daily, weekly or fortnightly – 30 days’ notice
Severance Pay
- Employed between 0 and 5 years – 0.5 months’ wages for each of the first 5 years
- Employed for 5 or more years – 1 month’s wages for each year of service beyond 5 years
Probation Period
- There is no statutory probation period
- Employees can expect a probation period of 90 days which can be extended to 180 days by agreement
Bonus
- There is no statutory bonus
Public Holidays
Public holidays 2023
- April 22nd – 25th – Eid al Fitr
- June 27nd – Arafat Day
- June 28th – 30 June – Eid al-Adha
- September 23rd – Saudi National Day
Leave
Paid Leave / Vacation Days
- Paid by employer
- Employed between 1 and 5 years – 21 days
- Employed for 5 or more years – 30 days
Sick Leave
- Paid leave
- Partially paid by employer
- 120 days per year
Maternity Leave
- Paid leave
- Paid by employer
- 10 weeks
Paternity Leave
- Paid leave
- Paid by employer
- 3 days
Death or Spouse or Children
- Paid leave
- Paid by employer
- Death of child – 5 days
- Muslim woman death of spouse – 4 months and 10 days
- Non-Muslim woman death of spouse – 15 days
Marriage Leave
- Paid leave
- Paid by employer
- 5 days
Hajj Leave
- Paid leave
- Paid by employer
- 10 days