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Employing Workers in Saudi Arabia (KSA)

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Employing Workers in Saudi Arabia (KSA)

Country Snapshot

  • Population: ~35.3 million (2024 est.)
    • Expatriates: ~44%
    • Saudi Nationals: ~56%
  • Capital: Riyadh
    • Other major cities: Jeddah, Mecca, Medina, Dammam, etc.
  • Currency: Saudi Riyal (SAR)
  • Official Language: Arabic (English widely used in business)

Saudi Arabia is the largest GCC country by area and plays a central role in the region. The Kingdom has both urban hubs (Riyadh, Jeddah) and sacred cities (Mecca, Medina), with licensing and immigration overseen by multiple bodies depending on region/type of business.

Hiring & Compliance: Overview

MasdarEOR is a fully licensed, in-country Employer of Record (EOR) provider in Saudi Arabia. We manage all employment obligations on behalf of clients—ensuring full compliance with local labor and immigration laws.

  • A valid Saudi trade license is required to directly sponsor employees.
  • Expatriates must be sponsored under a registered Saudi entity—either a client’s own license or an EOR platform such as Masdar.
  • Non-compliance with sponsorship and labor laws may result in fines, bans, or deportation.

Why Use an EOR in Saudi Arabia?

MasdarEOR offers a strategic alternative for companies that:

  • Do not have a legal entity in Saudi Arabia.
  • Face limitations with visa quota availability.
  • Prefer to outsource local hiring, payroll, and compliance management.
  • Seek to meet Saudization obligations without direct headcount.

MasdarEOR can legally employ both expatriates and Saudi nationals on our license, giving clients immediate access to workforce deployment without establishing a local entity.

Saudization Quotas & Support

The Kingdom of Saudi Arabia mandates private sector companies to hire a minimum number of Saudi nationals under the national Saudization (Nitaqat) policy.

  • Quota requirements vary by license type, industry, and employee headcount.
  • Penalties apply to non-compliance, especially for entities with 50+ staff.

MasdarEOR can manage Saudization on the client’s behalf by:

  • Employing eligible Saudi candidates on our EOR platform.
  • Ensuring full MHRSD/GOSI registration and pension compliance.
  • Providing local talent sourcing and quota tracking support.

Employment Contracts

  • Dual language: English and Arabic
  • Currency: Salary must be stated and paid in SAR
  • Contract Type: Fixed-term only (2 years, renewable)
  • Job Titles: Subject to availability in Saudi systems and tied to academic qualifications and Saudization policies. Not all titles are available and changes can occur without prior notice.
  • Must define: title, scope, salary, benefits, working hours, probation, and termination

Working Hours & Public Holidays

  • Standard: 8 hours/day, 48 hours/week
  • Workweek: Sunday to Thursday
  • Ramadan: 2-hour daily reduction for Muslim employees
  • Overtime: Overtime must be paid at 150% of the hourly wage

Paid public holidays include:

  • Eid Al Fitr
  • Eid Al Adha
  • Saudi National Day
  • Saudi Foundation Day

Leave Entitlements

Annual Leave

21 calendar days (after 1 year), pro-rated in first year

First 30 days: full pay

Next 60 days: 75% pay

Next 30 days: unpaid

12 weeks (6 weeks mandatory after delivery, 6 weeks flexible before/after); full pay if employed for 1 year, half pay if employed for less than one year.

3 days with full salary

10–15 days paid Hajj leave, for employees with ≥2 years service, once per employment.

Probation & Termination

3 months, extendable to another 3 months with written consent

Either party may terminate without notice, unless the contract specifies otherwise

30 to 60 days (as per contract)

Resignation:

    • <2 years: No gratuity
    • 2–5 years: 1/3 gratuity
    • 5–10 years: 2/3 gratuity
    • >10 years: Full gratuity

Termination:

    • <1 year: No gratuity
    • 1–5 years: 0.5 month salary/year
    • >5 years: Full gratuity

Payroll Compliance

  • Salary Payment: SAR only
  • WPS (Wage Protection System): Mandatory for all salaries
  • Payslips: Issued monthly
  • Frequency: Monthly salary cycle
  • No income tax in the KSA
  • Repatriation: Final air ticket to home country must be provided at the end of the contract unless employee transfers locally

Health Insurance

  • Mandatory under the KSA law

Why Choose MasdarEOR?

We are not a reseller or aggregator. MasdarEOR delivers direct, on-ground service with full compliance.

  • MoHRE-licensed entity with authority to sponsor expatriate and national workers
  • In-house visa, PRO, HR, legal and payroll infrastructure across Saudi jurisdictions
  • End-to-end onboarding, documentation, payroll, and offboarding
  • Saudization quota solutions via direct EOR employment of nationals
  • No hidden third-party costs — all services managed by Masdar directly

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