Saudi Arabia has a population of more than 34 million people, with key industries including oil, gas, mining, and real estate. There are many opportunities and challenges with starting a business in Saudi Arabia, so it is vital to research and know what to expect before you begin.

There is no income tax in Saudi Arabia, and corporate tax rates vary based on industry. Some labor and payroll considerations:

  • Friday is considered a holy day, so employees receive overtime pay if they work on Friday
  • There is no private sector minimum wage
  • Minimum wage for the public sector is 4,000 SAR per month ($1066 USD)
  • Social security contributions are withheld from employee pay and submitted to the General Organization for Social Insurance Employee wages are provided using the Wage Protection System (WPS)
  • Foreign workers need sponsorship to obtain a work permit and temporary residency
  • Companies are required to employ a certain percentage of Saudi residents, limiting the number of foreign workers
  • In accordance with the labor laws in Saudi Arabia, employees are entitled to payment for absence from work due to illness as follows: for the first 15 days of sick leave employee receives full pay, for the next 30 days an employee receives half pay, and for the following 45 days, the employee receives no pay

To get started in Saudi Arabia, or to simplify operations there, we can help. Blue Marble has created cloud-based payroll technology with customized monthly reporting to manage employees across all countries and currencies. With a US-based service team and direct access to in-country experts, you can ensure compliance, pay your employees across the globe, and optimize operations. To learn more, click here