Employer of Record Saudi Arabia (EOR Saudi Arabia)

• Quick, flexible, and easy entry into Saudi Arabia in compliance with local employment laws
• Complete control over business development with your own team
• Good option for building up, managing, and supporting your distributors and key accounts by directly observing local developments and adjusting the strategy whenever necessary
• Focusing on your core business instead of dealing with the time-consuming and complex local administrative tasks
• Allowing for easy market exit if necessary
• Integrating your employees into our team through motivational events and special meetings

Hiring an employee in Saudi Arabia requires a thorough understanding of the country’s labor laws, regulations, and cultural dynamics. Employers must comply with the Saudi Labor Law, which outlines key aspects such as work contracts, wages, working hours, leave entitlements, and termination procedures. For foreign workers, it is essential to navigate the visa and sponsorship process through the Saudi Ministry of Human Resources and Social Development. In addition to legal compliance, understanding local customs and fostering an inclusive, respectful work environment are crucial for building successful employment relationships. By adhering to these guidelines, employers can ensure a smooth and effective hiring process in Saudi Arabia.

Employers in Saudi Arabia should draft clear, written contracts outlining job duties, compensation, benefits, and resignation/termination procedures. Contracts must be in Arabic, with salaries stated in Saudi riyals (SAR). After three consecutive fixed-term contracts or four years of continuous employment, the contract automatically converts to an indefinite-term agreement.

In Saudi Arabia, probation periods can last up to 90 days and may be extended for an additional 90 days if both the employer and employee agree. Probationary periods are not mandatory by law.

In Saudi Arabia, the standard workweek is 40-48 hours, with eight-hour days, six days a week. Overtime pay is 1.5 times the regular rate for hours worked beyond 40. There is no overtime limit.

During Ramadan, the workday is reduced to six hours, a policy required by law for Muslim employees.

Saudi Arabia does not impose income tax on employees. Saudi employees contribute 10% of their salary to the General Organization for Social Insurance (GOSI), while non-Saudi employees are exempt from social security contributions.. Employers must also contribute 2% for occupational hazard insurance, similar to workers’ compensation.

Common supplementary benefits include:

• Health insurance
• Vacation travel tickets
• Transportation allowances
• Retirement plans
• Mobile phones
• Housing allowances

Saudi Arabia offers free healthcare to all Saudis and non-Saudis employed in the public sector through the Ministry of Health. Employers are required to provide medical insurance for non-Saudis working in the private sector.

Anyone entering Saudi Arabia needs a visa, except citizens of GCC countries (UAE, Bahrain, Oman, Qatar, and Kuwait).

Common visa types include:

• Employment visas: For expatriates with an employment contract.
• Business visit visas: For business visitors with a Saudi company invitation.
• Family visit/residence visas: For expatriates with family ties to a Saudi resident.
• Temporary work visit visa (TWVV): A one-year multiple-entry visa for short-term work, valid for up to 90 days with the sponsoring employer.

Saudi Arabia has recently reinforced its “Saudization” policy, which encourages the employment of local workers in the private sector, traditionally dominated by expatriates. As a result, obtaining work permits for foreign employees has become more challenging and expensive. Additionally, new job openings must be advertised to local candidates before being offered to expatriates. It is often more straightforward to hire individuals already residing in Saudi Arabia with an iqama.

Expatriates working in Saudi Arabia require both a work and residency permit, along with an exit-entry visa for re-entry into the Kingdom.

Saudi Arabia has four public holidays annually, in addition to annual leave. The national holidays are:

• Founding Day (February 22)
• Eid al-Fitr
• Eid al-Adha
• National Day (September 23)

In Saudi Arabia, employees are entitled to a minimum of 21 days of vacation leave after one year of service, increasing to 30 days after five years. Employers may set policies on carrying over unused leave.

Muslim employees with at least two years of service are eligible for up to 10 days of Hajj leave, which can be taken once every five years with the same employer.

In Saudi Arabia, female employees are entitled to 10 weeks of paid maternity leave after one year of service. Four weeks can be taken before birth, and six weeks after. Maternity leave is paid at half salary for one year of service and full salary for three years. Employees can use annual leave during maternity leave, but it will be paid at half or no salary.

Employers also cover pregnancy and delivery medical expenses. Fathers are entitled to three days of paid paternity leave.

Employees are typically entitled to up to four months of sick leave with a medical certificate. Sick leave is paid at 100% for the first 30 days, 75% for days 31 to 90, and is unpaid from days 91 to 120.

Employees are entitled to notice before termination: 30 days for fixed-term contracts and 60 days for indefinite contracts. Alternatively, both parties may agree to compensation instead of notice. There is no notice period for fixed-term contracts.

During the notice period, employees can use up to eight hours weekly to search for new employment. Upon termination, employees are entitled to severance pay: half a month’s average wages for each of the first five years, and one full month’s wages for each subsequent year.