Easily manage employment in Saudi Arabia

Payroll services in Saudi Arabia

Saudi Arabia has a strong economy with key industries in oil and gas, construction, and finance. With specific labor laws and tax regulations, employers in Saudi Arabia must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Saudi Arabia

Employers in Saudi Arabia must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Saudi Arabia’s minimum wage is SAR 4,000 per month for Saudi nationals.
• Payroll frequency: Salaries are generally paid monthly.
• Standard working hours: The normal workweek in Saudi Arabia is 48 hours, typically spread over six days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 150% of the regular wage for extra hours and 200% for work on public holidays.

Taxation and social security contributions

• Personal income tax: Saudi Arabia does not impose personal income tax on individuals.
• Employer contributions:
• General Organization for Social Insurance (GOSI): 12% of the gross salary for Saudi nationals.
• GOSI for expatriates: 2% occupational hazard insurance.
• Employee contributions:
• General Organization for Social Insurance (GOSI): 10% of the gross salary for Saudi nationals.
• Corporate tax: The corporate income tax rate in Saudi Arabia is 20% for foreign-owned companies, while Saudi-owned entities are subject to zakat at 2.5%.
• Tax reporting: Employers must file payroll taxes and contributions with the Saudi Arabian General Authority of Zakat and Tax (GAZT) and GOSI regularly.

Payroll compliance in Saudi Arabia

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security contributions.
• Employers must stay updated on changes to Saudi Arabia’s labor laws and tax regulations to avoid penalties.

Run payroll in Saudi Arabia with Remote

Managing payroll in Saudi Arabia requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.