Employer Payroll Tax
Employee Payroll Taxes
Employee Income Tax
There is no official minimum wage in the private sector. In the public sector, minimum monthly wages are 3,000 SAR.
Payment of wages varies. If an employee is employed based on a weekly salary, then they are paid at least once a week, and if the employee is on a monthly salary, the frequency of wage payments is monthly.
While not mandatory, it is customary to pay employees a 13th salary before Eid al-Fitr.
An employee cannot work more than 8 hours a day or 48 hours within a week. During Ramadan, however, the workday is reduced to 6 hours and up to 36 hours per week.
An employee cannot work more than 11 hours a day. For hours over 8 per day, payment in overtime is 150% of the regular pay rate.
If an employee has completed 1 year of employment, they are entitled to 15 days of paid leave per year. After 10 years of employment, this entitlement is increased to 21 days per year.
The employee is also entitled to 10 days of unpaid leave per year, subject to employer approval.
There are 3 public holidays.
Sick leave in Saudi Arabia is 90 days for every year, where the first 30 are paid in full and then reduced to 75% for the remaining 60. For the employee to use sick leave, they must be able to produce a medical certificate.
Sick leave laws apply to employers with more than 20 employees.
Maternity leave is 10 weeks and can begin no earlier than 4 weeks from the expected due date. If the woman has been employed for at least 1 year, maternity leave is paid at the rate of 50% of the regular pay. If the mother has been employed for at least 3 years, maternity leave is paid at the rate of 100% of the regular pay.
A woman will not be paid for regular annual leave if maternity leave is taken within the same year that full pay for maternity leave is received and will only receive payment of 50% of annual leave pay when maternity leave is also at 50% of the regular pay.
Fathers are entitled to 2 days’ paid leave for the birth of a child.
There are no provisions in the law regarding parental leave.
Marriage leave – 3 days’ unpaid leave
Death of a family member – 2 days’ paid leave
In Saudi Arabia, a valid reason must be given upon termination, Otherwise, the employer may be either forced to pay compensation that is determined by the labor commission or can be forced to reinstate the employee.
If the employee initiates the termination, final wages must be paid immediately.
Notice period is 30 days for employees on monthly employment contracts and 15 days for other types of employment contracts.
The amount of severance pay varies based on length of employment and the manner in which the employment agreement ends.
If the employer initiates the termination or an employee resigns due to marriage or childbirth, is called for military service, or resign due to force majeure, the employee is entitled to half a months’ salary for each year of employment up to 5 years and 1 months’ salary for every year after.
If the employee resigns, they are entitled to one third of the above mentioned for 2-5 years of service and two thirds for every year up to 10 years. After 10 years of service, the employee is entitled to the full benefit. In order for the employee to be eligible, they must have given at least 30 days’ notice in writing.
However, there are exceptions as to when severance is not mandatory:
- When the employer assaults their employer or supervisor
- When the obligations outlined in the employment contract are not fulfilled by the employee and has been warned in writing
- Negligence or intent to cause harm to the employer
- Dishonesty or forgery
- When the employee is on probation
- When the employee is absent from work for more than 20 days in a year or 10 consecutive days
- Divulging in trade secrets
Standard rate of 5%.