Employee benefitsin Saudi Arabia

Private-sector employers must pay the health-insurance premiums for Saudi and non-Saudi employees and eligible family members. Covered dependants include spouses, sons up to age 25, unmarried nonworking daughters and qualifying fostered orphans. A married Saudi woman’s cover includes her husband when he is unemployed or employed in government, as well as qualifying children. A family member visiting on a visit visa follows visitor-insurance rules rather than this employee-dependant obligation.

The mandatory unified policy covers care in Saudi Arabia. An employee who requests a higher insurance category may pay the additional premium under the employer’s insurer agreement. Employers choose a licensed insurer and maintain cover; they cannot shift the required family premiums to the worker.

Employers must maintain healthy and clean workplaces, provide drinking and washing water, prevent occupational risks, explain hazards and supply suitable protective equipment with training. Workers cannot be charged for this protection through fees or wage deductions. These duties apply alongside social-insurance protection for work injuries.

Employers can enhance the required medical policy with broader hospital networks, additional treatment limits or overseas cover. This is separate from paying the mandatory employee and dependant premiums. Professional hiring packages often use broader medical cover; policy benefits, exclusions and any upgrade premium determine the employee’s access. A local-market premium illustration ranges from approximately SAR 1200 to SAR 8000 per insured person annually, plus applicable value-added tax, across different coverage categories. It is a cost illustration, not a fixed national premium.

Employer recreation facilities can provide access to exercise and leisure without a cash allowance. A disclosed large-employer policy for international staff offers free use of gyms, swimming pools, golf, tennis and squash facilities, beaches and other recreation sites. Access is an employer-specific facility benefit, rather than a national fitness reimbursement budget.

Employers pay 2% of contributory wages into occupational-hazards insurance administered by the General Organization for Social Insurance. Saudi and non-Saudi employees are covered; workers do not pay a contribution to this branch. For non-Saudi employees who are not covered by a Gulf Cooperation Council home-country pension arrangement, this is generally the only compulsory Saudi social-insurance branch.

Covered work injuries and occupational diseases include treatment and disability or survivor protection. Under the existing insured scheme, temporary incapacity is paid at 100% of contributory wages, reduced to 75% while receiving treatment at the fund’s expense in a treatment institution. The Labour Law’s separate 60-day full-pay/75% injury schedule applies outside establishments subject to this insurance branch.

A citizen of another Gulf Cooperation Council state working in Saudi Arabia can fall under the insurance-protection extension that keeps pension coverage in the worker’s home-country scheme. The employer registers and contributes according to the applicable home-country rules. These workers must be assessed separately from Saudi pension contributors and non-Gulf expatriates covered only for Saudi occupational hazards. Employer pension liability is subject to the applicable host-country limit; a worker can owe a difference when the home-country required rate is higher.

Saudi employees with retained, uncompensated contribution periods before 3 July 2024 remain in the existing contribution system. The pension branch receives 9% of contributory wages from the employer and 9% from the worker. Unemployment insurance adds 0.75% each and occupational-hazards insurance adds 2% from the employer, for totals of 11.75% employer and 9.75% worker. Contributory wages generally include basic pay and housing; the monthly ceiling is SAR 45000. The existing annuity-branch floor is SAR 1500, while the occupational-hazards floor is SAR 400.

Prior periods already paid out as a lump sum or service reward are disregarded in the entry assessment: a person returning to covered work can then fall under the new system. The employee’s individual social-insurance classification determines the correct payroll treatment.

The new social-insurance system covers Saudi entrants who have no retained, uncompensated Civil Pension or Social Insurance contribution period before 3 July 2024. From 1 July 2026, the pension contribution is 10% of contributory wages from each of the employer and worker. Adding 0.75% each for unemployment insurance and 2% employer-only occupational hazards gives total contributions of 12.75% from the employer and 10.75% from the worker. The contributory wage includes basic pay and housing and is capped at SAR 45000 a month.

The pension rate rises by 0.5 percentage points per party each July: 10.5% in 2027 and 11% in 2028. The new system’s normal retirement age is 65 Gregorian years; early retirement is possible up to 10 years earlier after 360 contribution months, with a pension reduction. A person whose former periods were already paid out as a lump sum or service reward can enter the new system on returning to covered work because those periods are disregarded. A worker with retained, uncompensated earlier history does not enter the new system merely by changing employers.

SANED is Saudi Arabia’s unemployment-insurance scheme. Eligible Saudi employees and their employers each contribute 0.75% of contributory wages. These payments fund the scheme and are separate from the pension and occupational-hazards branches. Paying a contribution does not by itself establish a claim entitlement or a benefit amount. Non-Saudi expatriate employees are not enrolled in this Saudi unemployment branch.

An end-of-service award is an employer-funded lump sum paid when employment ends. The full formula is half a month’s final wage for each of the first 5 years and one month’s final wage for every later year, with fractions of a year paid proportionally. Fixed allowances form part of wage; permitted agreements can exclude specified variable commissions or sales percentages.

For ordinary resignation, there is no award before 2 years, one third of the full amount from 2 through 5 years, two thirds after 5 but before 10 years, and the full amount from 10 years. Exceptions preserve the full award for qualifying force majeure and for a woman ending employment within 6 months of marriage or 3 months of childbirth. Probation termination and the specific serious-misconduct grounds have separate exclusions. This award is distinct from compensation for an unlawful termination.

Some retirement packages add an employer plan to compulsory social insurance. A large-employer example for Saudi employees targets combined lifetime retirement income equal to 2% of final two-year average pay for each recognised service year, combining social insurance and the employer plan. This is a total benefit formula, not a 2% employer contribution or a national pension promise. The plan’s membership and recognised-service rules govern an employee’s benefit.

Life and accident insurance pays a defined amount after a covered death or disability. A disclosed large-employer international-employee programme offers voluntary cover of 12,18,24 or 30 times monthly base salary at group rates. The same employer separately states a discretionary death payment of 24 months’ base pay after an industrial accident and 12 months after a nonindustrial death. Voluntary insurance and the employer’s death payment are separate benefits with their own terms.

A disclosed savings plan for Saudi employees adds an employer contribution when a participant leaves service. The stated company addition is 5% of the employee’s savings after 1 year, rising to as much as 100% after 10 years. It is a savings-based benefit, separate from pension contributions and the statutory end-of-service award; plan membership and service rules determine the actual payment.

An employer can offer a repayable loan or salary advance under its own policy. The agreement sets eligibility, the amount, repayment timing and any charges; the payment is repayable support rather than extra salary. Employer-loan recovery without the worker’s prior written consent is limited to 10% of the worker’s wage. Total wage deductions generally cannot exceed half of the wage due, subject to the Labour Court’s statutory exceptions.

Employees receive at least 21 paid days of annual leave per year, increasing to at least 30 days after five consecutive years with the same employer. Leave pay is paid in advance. The employer sets the schedule around business needs and gives at least 30 days’ notice. Employees take leave during the year it is earned and cannot exchange it for cash while employed.

With employer approval, leave can move to the following year. Business needs can justify postponement for up to 90 days; a further delay needs the worker’s written agreement and cannot extend beyond the end of the following year. Unused accrued leave and proportional entitlement for a partial year are paid when employment ends.

A medically supported illness gives an employee up to 120 days of sick leave in a sick-leave year, taken continuously or intermittently. The first 30 days are at full wage, the next 60 at 75% of wage and the final 30 are unpaid. The year starts with the first sick leave, rather than automatically on 1 January. An employer cannot terminate employment for illness before the statutory sick-leave period is exhausted, and the employee can request to combine annual leave with sick leave.

A Muslim employee whose husband dies receives at least 4 months and 10 days of fully paid iddah leave, the mourning and waiting period after a spouse’s death. If she is pregnant she can extend the leave unpaid until delivery; unused iddah leave is not resumed after childbirth. A non-Muslim employee receives 15 fully paid days when her husband dies. Working for another employer during this leave is prohibited.

Employees receive 5 fully paid days for their marriage or for the death of a spouse, parent or other ascendant, or child or other descendant. A sibling’s death gives 3 fully paid days. The leave is counted from the event, and employers may request supporting documents.

An employee who has never performed Hajj, the annual Islamic pilgrimage to Mecca, can take 10 to 15 paid days once during service. The period includes the Eid al-Adha holiday and requires at least 2 consecutive years with the employer. Employers can set how many employees take this leave in a year according to business needs.

With employer approval to enrol or continue in education, an employee receives paid leave for the actual examination days of an academic year that is not being repeated. Examination leave for a repeated year is unpaid. Without that enrolment approval, examination days come from available annual leave and are unpaid when no balance remains. The employee requests leave at least 15 days beforehand and can be asked for evidence of attendance.

Other unpaid leave is available by agreement. A period exceeding 20 days suspends the employment contract unless the parties agree otherwise.

An employer can offer annual leave above the legal minimum. A disclosed large-employer policy for international employees offers up to 38 calendar days of paid annual vacation, with public holidays additional. The upper limit is an employer example; the employee’s offer and policy determine the applicable allowance.

On returning from maternity leave, a mother may take one or more nursing breaks totalling up to 1 hour a day, in addition to ordinary rest breaks. The time counts as paid working time. Dismissal or dismissal notice is prohibited during pregnancy and maternity leave, including medically certified related illness within the law’s 180-day annual absence limit.

The General Organization for Social Insurance pays maternity compensation on the employer’s behalf to qualifying insured women, including Saudi and non-Saudi employees. The benefit is 100% of the average monthly contributory wage for the 12 months before birth, paid for 3 months. It extends by 1 month when a sick or disabled newborn needs continuous care.

The mother must be employed in covered work at birth and have at least 12 months of Occupational Hazards contributions during the previous 36 months, with eligible periods counted from 3 July 2024. Birth must follow at least 6 months of pregnancy, whether the baby is born alive or stillborn. Salary and maternity compensation cannot be drawn together for the same period.

A birth mother has 12 weeks of fully paid maternity leave. Six weeks after childbirth are compulsory; she chooses how to use the other six, starting no earlier than four weeks before the medically certified expected delivery date. The law also allows an additional month of unpaid leave. If a newborn is ill or has a disability requiring continuous care, the mother receives one further month of paid leave after maternity leave and may extend it by another unpaid month.

Qualifying social-insurance maternity compensation is administered separately and can fund the insured benefit on the employer’s behalf. The 12-week employment right does not depend on the old one-year or three-year salary replacement tiers.

An employee receives 3 fully paid days when a child is born, taken within 7 days of the birth. The employer can require supporting evidence. This entitlement is separate from the mother’s maternity leave.

An employer with at least 50 female employees must provide suitable childcare with sufficient carers for their children under 6 when there are at least 10 such children. The ministry can also require an employer with 100 or more female employees in one city to establish or share a nursery, or contract with one; the applicable decision sets operating conditions and any employee share of costs.

Education allowances help pay dependent children’s school costs, particularly in senior expatriate packages. Employers set the eligible children, schools, reimbursable fees and funding limits. An actual large-employer example for staff hired on family status provides education assistance through company schools, local international schools or international boarding schools. This is separate from the legal duty to provide workplace childcare in qualifying establishments.

Private-sector employees receive paid leave for Founding Day, National Day and the two Eid festivals. Eid al-Fitr leave lasts 4 days from the day after 29 Ramadan in the official Umm al-Qura calendar. Eid al-Adha leave lasts 4 days from Arafat Day, the day of the main Hajj pilgrimage rite. Founding Day is 22 February and National Day is 23 September.

When a holiday overlaps weekly rest, an equivalent replacement is provided before or after it. Holidays overlapping annual leave extend that leave, while a holiday falling within sick leave is paid in full. National Day overlapping an Eid period does not generate an extra replacement. Flag Day on 11 March is a national observance rather than an additional private-sector paid holiday under this list.

Employers may pay performance or seasonal bonuses in addition to salary. A reported annual-bonus range is 1 to 2 months’ pay where offered; the employer’s plan defines the salary basis and performance conditions. One large-employer policy for eligible Saudi employees pays a Ramadan bonus equal to 1 month’s base salary. A bonus promised by contract, workplace rules or established wage practice can become an enforceable pay term. There is no general statutory 13th-month salary requirement.

Service awards recognise completed employment milestones. A disclosed large-employer policy for Saudi employees provides gifts or gift certificates after 5 years of service and at each further 5-year milestone. The value and form depend on the employer’s award rules and are separate from salary bonuses or the statutory end-of-service payment.

Employers must provide suitable transport between employees’ residence and workplace, or an appropriate cash transport allowance paid alongside salary. The duty applies under the Labour Law from 19 February 2025. The transport arrangement and cash allowance are specified in the employment package; an advertised percentage is a market design choice rather than a legal fixed rate.

For a foreign employee, the employer pays recruitment costs, residence and work-permit fees and renewals, penalties caused by late renewal, profession-change fees, and exit and re-entry fees. A new employer also pays the fee for transferring the employee’s services. These are employer obligations rather than automatic salary deductions. The worker must hold the relevant work permission and perform the profession authorised by it; a business-visit visa is not general permission to take employment.

When a foreign employment relationship ends, the employer pays the worker’s return ticket to their home country. The worker bears the return cost if unfit for work or choosing to return without a legitimate reason. If an employee dies, the employer covers preparation and transport of the body to the place of recruitment unless the family consents to local burial or social insurance takes responsibility. An annual home-flight benefit is a separate contractual arrangement.

Employers must provide suitable housing for employees or an appropriate cash housing allowance alongside salary. The requirement applies to ordinary Labour Law employees and is part of the employer’s duties from 19 February 2025. The contract should distinguish the housing support from other pay components; a market package percentage does not replace the obligation to provide appropriate support.

Cash transport allowances are a common way to meet the employer’s transport duty. A reported package convention is around 10% of basic salary; an employer may instead provide transport. This percentage describes a pay design and does not set the legal amount needed for appropriate transport. The contract should identify the allowance and whether any travel reimbursement is separate.

Employer-provided mobile phones support business calls and messages. The employer’s policy sets ownership of the handset, permitted personal use, data and call coverage, and return of equipment when employment ends. A work phone is distinct from a recurring cash allowance for an employee’s personal internet service.

Flexible schedules allow employees to vary their starting and finishing times within the employer’s agreed availability and coverage requirements. The arrangement changes when work is done and remains subject to the applicable limits on hours, rest and overtime. A flexible schedule does not by itself provide permission to work from any country or a paid home-office allowance.

Annual home-flight benefits fund a return trip to an expatriate employee’s home country, separate from the statutory return ticket at the end of employment. One return ticket per year is a reported common package design. The employment policy specifies who is covered, the route, ticket class, booking rules and treatment of unused travel; family flights require their own eligibility terms.

Cash housing allowances are common in private-sector salary packages and can be paid instead of suitable employer-provided accommodation. Amounts and payment schedules are set in the employment package. One large-employer policy for eligible Saudi employees pays an annual housing allowance equal to 3 months’ base salary, with a minimum of SAR 30000, earned monthly during its July-to-June allowance year and normally paid in December. That example applies to that employer’s eligible Saudi employees.

Settling-in payments help new employees meet relocation expenses. A disclosed large-employer Saudi-employee policy provides 60% of one month’s base salary for single new hires and 1 month’s base salary for married new hires. These are one-time employer examples, separate from legally required recruitment and immigration fees.

An employee works for pay under an employer’s direction or supervision, including when the employer does not directly oversee every task. Calling the agreement a consultancy contract does not change that relationship. A genuine independent business supplies services on its own account; employee annual leave, maternity leave and end-of-service awards do not automatically attach to that commercial relationship. Non-Saudi residents also need immigration permission for the actual work: a sponsored employee cannot simply switch to work for another client or for their own account outside the prescribed procedures.

Employment contracts must be written, documented and held by both parties. They identify the employer and worker, nationality and identity details, agreed pay including benefits and allowances, work and location, start date, duration and each party’s basic rights and duties. The worker can still prove an employment relationship and its rights when the employer has failed to put it in writing.

Non-Saudi employees must have a written fixed-term contract. If its duration is missing, the term is one year from the actual start of work, renewing for a similar term if work continues. For Saudi employees, a renewable fixed-term contract converts to an indefinite term after three consecutive renewals or four years including renewals, whichever is earlier, when performance continues. This conversion rule does not remove the separate fixed-term requirement for non-Saudis.

Monthly-paid employees receive wages at least monthly; daily-rated workers are paid at least weekly. Pay is due in Saudi riyals and is transferred into employee accounts through accredited banks, subject to any ministerial exemptions. Packages commonly separate basic salary, housing and transport, but the same salary base does not apply to every entitlement: social-insurance contributions generally use basic salary plus housing, while the end-of-service award uses the final wage subject to the permitted treatment of variable commissions.

Saudi Arabia’s Nitaqat workforce-localisation programme counts a Saudi employee as a full worker when monthly wages reach SAR 4000. A Saudi employee paid at least SAR 3000 but less than SAR 4000 counts at half weight; below SAR 3000 the worker does not count. These are quota-counting thresholds, rather than a universal minimum wage for every worker. Profession-specific localisation decisions can set other conditions, while non-Saudi private-sector employees do not have a general national wage floor under this rule.

Each overtime hour is paid at the ordinary hourly wage plus 50% of the basic hourly wage. This is not automatically 150% of total pay when allowances form part of the ordinary wage. Work on official holidays is overtime. With the employee’s agreement, an employer may provide paid compensatory leave in place of overtime pay under the implementing rules. The exceptional-work provisions limit actual work to 10 hours a day or 60 a week in the specified circumstances; ordinary limits and rest requirements still apply.

The general limits are 8 actual working hours a day or 48 a week, depending on the standard the employer uses. During Ramadan, Muslim employees have a reduced limit of 6 hours a day or 36 a week. Certain designated industries and roles have 7- or 9-hour daily limits. Workers generally receive a break of at least 30 minutes after no more than 5 consecutive hours, and at least 24 consecutive hours of paid weekly rest. Friday is the default weekly rest day; a different day can be substituted after notifying the labour office. A five-day office schedule is an employer arrangement rather than the universal legal maximum.

A probation period must be expressly agreed in the employment contract and its duration cannot exceed 180 days. Either party may end the contract during probation; termination during that period carries no end-of-service award or termination compensation. A second probation with the same employer requires written agreement and a different profession or type of work, or at least six months since the earlier employment ended.

A written resignation request is deemed accepted if the employer does not respond within 30 days. For business reasons the employer can delay acceptance for up to 60 days, explaining the reason in writing before the original 30 days expire. An employee can withdraw the request within 7 days unless it has already been accepted. The contract and its obligations continue during the request period; this process is separate from notice rules for indefinite contracts.

For an indefinite contract paid monthly, an employee gives at least 30 days’ written notice to leave for a legitimate reason and an employer gives at least 60 days. If pay is not monthly, either side gives at least 30 days. A party that does not give the required notice owes the other the wage for the missing period, subject to their agreement. Fixed-term expiry and early termination have different rules.

Unless the contract specifies compensation for an invalid termination, the fallback is 15 days’ wage per service year for an indefinite contract, or pay for the remaining fixed term, with a minimum of 2 months’ wage. It is separate from the end-of-service award and accrued leave. Final entitlements are settled within 1 week when the employer ends employment, or 2 weeks when the worker ends it. During employer-given notice, the employee has 1 paid day or 8 paid hours a week to look for work, with advance notification.

Saudi Arabia does not impose personal income tax on employment earnings. Social-insurance deductions still apply according to nationality and insurance cohort. Genuine business or professional income is assessed under separate tax rules, so an employee’s salary treatment cannot be assumed for a consultant’s invoices. The standard value-added tax rate on taxable goods and services is 15%; this is a consumption tax rather than a payroll deduction.