Country Payroll Guide Saudi Arabia

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Saudi Arabia

Key Facts

Capital
Riyadh
Date format
Day-Month-Year
Currency
Saudi Riyal (SAR)
VAT
the standard rate is 5%

Contributions

Employers

Social Insurance
Social Insurance - 9%
Unemployment
Unemployment - 1%
Occupational Hazard
Occupational Hazard - 2%
Total Employment Cost
Total Employment Cost - 12%

Employees

Social Insurance
Social Insurance - 9%
Unemployment
Unemployment - 1%
Total Employee Cost
Total Employee Cost - 10%

Minimum Wage

Minimum Wage
The minimum wage in Saudi Arabia is 4000 SAR per month.

Payroll

Payroll Cycle
Monthly
13th Salary

Not mandatory but usually they give 13th salary before Eid al-Fit.

Working Hours

General Working Hours

48 hours per week.

Overtime

150% of the regular pay rate; no more than 11 working hours per day.

Leave

Paid Time Off

1 year of service – 15 days; after 10 years of service – 21 days.

Public Holidays

3 public holidays.

Sick Days

90 days per year; first 30 are 100% paid, the rest 60 are 75%.

Maternity Leave

10 weeks; if one year of service – 50%; if at least 3 years of service – 100%.

Paternity Leave

2 days.

Other Leave

Marriage leave – 3 days unpaid; Death of a family member – 2 days paid leave.

Termination

Termination Process

A valid reason must be given upon termination.

Notice Period

30 days for monthly employment contracts and 15 days for other types of employment contracts.

Severance Pay

The amount of severance pay varies based on length of employment and the manner in which the employment agreement ends.

If the employer initiates the termination or an employee resigns due to marriage or childbirth, is called for military service, or resign due to force majeure, the employee is entitled to half a months’ salary for each year of employment up to 5 years and 1 months’ salary for every year after.

If the employee resigns, they are entitled to one third of the above mentioned for 2-5 years of service and two thirds for every year up to 10 years.

After 10 years of service, the employee is entitled to the full benefit. In order for the employee to be eligible, they must have given at least 30 days’ notice in writing.

However, there are exceptions as to when severance is not mandatory:

  • When the employer assaults their employer or supervisor
  • When the obligations outlined in the employment contract are not fulfilled by the employee and has been warned in writing
  • Negligence or intent to cause harm to the employer
  • Dishonesty or forgery
  • When the employee is on probation
  • When the employee is absent from work for more than 20 days in a year or 10 consecutive days
  • Divulging in trade secrets
Probation Period

90 days.

Visa

Employment Visa

Employment visa.