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hire in Saudi Arabia

Saudi Arabia PEO &
Employer of Record

SALARY PAYMENT IN Saudi Riyal (SAR, SR)

CONTRACT LANGUAGES Arabic / English

PAYROLL TAX 12.00% – 13.50%

PAYROLL CYCLE Monthly

TIME TO HIRE 12 hours

Hire and pay talents
with Horizons in
180+ countries

Simple, compliant hiring with Horizons PEO

Hire in Saudi Arabia

Horizons ensures day-to-day guidance to help your business navigate Saudi Arabia labor laws and regulations. Horizons also ensures Saudi Arabia payroll is processed on time, and that taxes are withheld as required.

As the Saudi Arabia Employer of Record, Horizons is responsible for employee income tax withholding, payment of payroll taxes to state authorities, and submission of tax returns to the Saudi Arabian Tax Office. 

Partnering with our Saudi Arabia PEO is the quickest and most cost-effective way to enter the Saudi Arabian market.

Facts & Stats

PEO Platform Hire in Saudi Arabia, and pay employees through our platform or app. PEO Cost Our Saudi Arabia PEO solution is the most affordable on the market. Time-to-hire Fast onboarding in Saudi Arabia, hire in as little as 12 hours.
Contracts We draft labor contracts compliant with Saudi Arabian labor law. Local Benefits We administer all mandatory benefits and contributions in Saudi Arabia. 180+ Countries It doesn’t stop with Saudi Arabia — we are an international PEO
stay compliant with Saudi Arabia labor laws

Employment Laws

Employment contracts in Saudi Arabia

Employers seeking to hire employees in Saudi Arabia are encouraged to draft strongly-worded, written employment contracts. In addition to describing the job and the employee’s responsibilities, the employment contract should also state the rate of compensation, any benefits, and protocols surrounding resignation and termination. Contracts should be drafted in Arabic and all references to salary should be made in Saudi riyal (SAR). 

Saudi Arabian law allows probation periods of up to 90 days. If the employer and employee agree on lengthening this term, a probationary period can be extended another 90 days.

Employees who complete three consecutive fixed-term contracts or work continuously for their employer for four years, automatically have their contract converted to a non-term length contract.

Horizons’ Saudi Arabia PEO offers compliant employment contracts that meet Saudi Arabia’s complex workplace regulations. 

Fixed-term
Probationary period0 – 90 days (can be extended to a maximum 180 days)
Termination notice period1 – 3 months, to be outlined in the employment contract.
SeveranceRequired for early dismissal. Calculated on a case-by-case basis
Indefinite
Probationary period0 – 90 days (can be extended to a maximum 180 days)
Termination notice period1 – 3 months, to be outlined in the employment contract.
SeveranceRequired. Calculated on a case-by-case basis

Working hours in Saudi Arabia

The typical work week in Saudi Arabia is between 40 and 48 hours. Work is generally performed eight hours per day, six days per week. If an employee works more than 40 hours in a week, they are entitled to overtime pay, which is 1.5x the normal hourly rate. There is no cap on the amount of overtime hours that may be worked.

During Ramadan, the work day in Saudi Arabia is reduced to six hours. While this policy normally applies to all employees, it is only required by law to grant this adjustment to Muslim employees.

Hire compliantly in Saudi Arabia without a local entity.

Quick, compliant hiring in 12 hours—no subsidiary required.

Work week in Saudi Arabia

The typical work week in Saudi Arabia is between 40 to 48 hours each week. Typically, this means work-related tasks and responsibilities will be performed 8 hours per day, 6 days per week. If an employee works more than 40 hours in a week, he or she is entitled to overtime pay, which is 1.5 times the normal rate. There is no cap on the amount of overtime hours that may be worked.

During Ramadan, the workday in Saudi Arabia is reduced to six hours per day. While this policy typically applies to all employees, it is only required by law to grant this adjustment to Muslim employees.

Holidays in Saudi Arabia

Saudi Arabia celebrates Eid Al Fitr and Eid al Adha, which are religious festivals. These festivals last three and four days respectively. Additionally, Saudi Arabia observes Unification of the Kingdom Day on September 23.

Saudi Arabia has a range of national public holidays that are celebrated annually. In 2024 these holidays are:

DateHoliday name
22 Feb ThursdayFounding Day
9 TuesdayEid al-Fitr (Tentative Date)
10 Apr to 13 Apr Wednesday-FridayEid al-Fitr Holiday (Tentative Date)
15 Jun SaturdayArafat Day (Tentative Date)
16 Jun SundayEid al-Adha (Tentative Date)
17 Jun to 18 Jun Monday-TuesdayEid al-Adha Holiday (Tentative Date)
23 Sep MondaySaudi National Day
24 Sep TuesdayDay off for Saudi National Day

Employment taxes in Saudi Arabia

Employers in Saudi Arabia must pay GOSI for their employees, which are social insurance taxes. These payments are based on employees’ base salary, housing allowances, and other designated allowances. Employers also need to pay contributions for occupational hazards insurance (similar to workers’ comp) of 2% for their employees.

Health insurance

Saudi Arabia’s national healthcare system provides medical care and hospital care for citizens of the country. Expatriate employees often receive supplementary health insurance as an added benefit.

Vacation leave

The minimum amount of vacation leave in Saudi Arabia is 21 days, which is granted after an employee has worked for a company for at least one year. Starting in the sixth year of employment, the statutory minimum amount of vacation leave is 30 days. Employers may have separate policies regarding carrying over unused time to the next year of service, or capping carry over leave time.

Additionally, Hajj leave may be provided to Muslim employees who have been with the company for at least two years of continuous employment. The leave can be up to 10 days and can only be taken once in five years with the same employer.

Sick leave

Employees are usually entitled to a maximum of four month’s sick leave if they provide a medical certificate to their employer. Sick leave is paid at a rate of 100% for the first 30 days, 75% for 31 to 90 days, and unpaid for 91 days to 120 days.

Maternity and paternity leave

Female employees in Saudi Arabia are usually entitled to 10 week’s paid maternity leave, so long as they have been with their employer for at least one year. Four of these 10 weeks can be taken before the birth of the child, but at least six of the remaining 10 weeks must be taken after the birth. 

Maternity leave is paid at half pay if an employee has been with their employer for at least one year. If an employee has been with their employer for at least three years, they are entitled to maternity leave at full pay. Employees can take their annual vacation during the same year that they take their maternity leave. However, if an employee chooses to do this, they are only entitled to half pay or no pay, depending on how much maternity leave has been granted. 

Employers in Saudi Arabia are also required to pay for the female employee’s pregnancy and delivery medical expenses.

Fathers may take up to three day’s paid paternity leave.

Termination and severance

Employees are generally entitled to notice before being terminated. For employees with written, limited contracts, they are entitled to 30 day’s notice before termination. Those with unlimited contracts are entitled to 60 day’s notice. Alternatively, both the employer and employee can agree to compensation instead of notice.

There is no notice period for definite contracts.

During the notice period, employees can use up to eight hours each week to find alternative employment.

Once the employment contract ends, the employee is entitled to severance payment that is:

  • Equal to half of one month’s average wages for each of the first five years of employment
  • Equal to a full month’s wages for each year of work after the fifth year

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Saudi Arabia PEO can mitigate risk for foreign companies and provide guidance through this process.  

hassle-free Saudi Arabia compensation & benefits

Compensation & Benefits

Saudi Arabia compensation laws

While there are no minimum wages for Saudi Arabia’s private sector, public sector employees must make at least $1,066.05 a month, equal to approximately 4,000 Saudi Arabian riyal (SAR). Compensation laws also dictate overtime payments that are 100% of an employee’s normal hourly rate, plus a 50% bonus. Any work conducted on a Friday or public holiday is considered overtime.

Severance pay in Saudi Arabia is 15 day’s wages for an employee’s first five years of work, then a full month’s wages for every year thereafter. For Saudi Arabian nationals, they have rights to additional severance pay, as per their employment contract.

Minimum Wage Country Comparison Chart (Per month in USD)
Switzerland (Geneva) $4,000
Italy $2,255
Australia $1996
Algeria $156
Uzbekistan $22
Guaranteed benefits in Saudi Arabia

At the very minimum, employers must provide their employees with benefits outlined in the country’s employment regulations. These statutory benefits include:

  • Reduced work days (six hours) for Muslim employees during Ramadan
  • 21 day’s paid vacation each year
  • Time off for public holidays announced by the government each year

While the statutory minimum for paid vacation is 21 days, it increases to 30 days after an employee has been with an employer for six years.

Muslim employees are entitled to leave for the Hajj, after they have been with their employer for two years. This form of leave can only be taken once within five years of employment, and cannot extend to more than 10 days.

Saudi Arabia benefit management

In Saudi Arabia, a benefit management plan should include supplemental benefits. This will enable a business to attract and retain high-level talent. It’s considered the ‘norm’ for employers to offer employees:

  • Supplementary health insurance
  • Plane tickets to travel home for vacation
  • Money for education expenses 
  • Retirement plans
  • Mobile phones
  • Housing allowances
  • Transportation allowances
Benefits and compensation restrictions

Employers in Saudi Arabia should be mindful of their employee’s sick leave. While employees are generally entitled to four month’s sick leave, they need a medical certificate to take that length of time. If an employee has a medical certificate, they are entitled to full pay for the first 30 days, 75% for 31 to 90 days, and unpaid time off from 91 to 120 days.

Hire in Saudi Arabia in 12h
without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

FAQs

A Saudi Arabia PEO and a Saudi Arabia EOR are two types of companies which specialize in providing human resources services to businesses in Saudi Arabia.

The main difference between a Saudi Arabia PEO and a Saudi Arabia EOR is in the scope of their services.

Saudi Arabia PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a Saudi Arabia PEO is essentially outsourcing your HR duties in Saudi Arabia.

Saudi Arabia EORs actually take over as the legal employer of your employees based abroad. Saudi Arabia EORs become responsible for labor compliance for your employees in Saudi Arabia.

At Horizons, we offer both PEO and EOR services in Saudi Arabia. Get in touch now and let us know what service you are seeking.

A PEO in Saudi Arabia can feasibly hire both local and foreign nationals to work in Saudi Arabia.

However, the ability of Horizons to sponsor your foreign national employee in Saudi Arabia may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

In most cases, Horizons’ Saudi Arabia PEO can hire & onboard your employee within 12 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in Saudi Arabia.

It is possible to get a work visa in Saudi Arabia. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in Saudi Arabia are limited, however—get started today to secure your employees’ visa spot.