Saudi Arabia

Hiring in Saudi Arabia generally comes down to four routes. Using HQ payroll is not compliant due to local employment and visa requirements. Contractor arrangements are limited and tightly regulated. Setting up a local entity allows direct hiring but involves significant administrative effort. Many companies work with an Employer of Record to employ workers compliantly, including handling payroll, visas, and statutory requirements without opening a local entity.

Generally, registering a company in Saudi Arabia can take anywhere from a few days to a few weeks, depending on the complexity of the company structure and the completeness of the application.

However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, and changes in rules and regulations followed.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Saudi Arabia, employment is the right structure under Saudi law, covering entitlements like paid leave, end-of-service gratuity, and GOSI contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Saudi Arabia.

HR compliance in Saudi Arabia means your policies and procedures respect all applicable Saudi employment laws and regulations. When you hire in Saudi Arabia, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, annual leave, the 4,000 SAR minimum wage, tax credits, and a 48-hour working week. Following these is fundamental for running the business well.

As with every other country, there are certain costs associated with employing a worker in Saudi Arabia that come on top of the gross salary you are offering.

Boundless is the legal employer of the individual, as far as the Saudi Arabian government, tax, and employment authorities are concerned. We provide a locally compliant contract, process payroll through the Wage Protection System, file employment-related returns, and administer statutory benefits such as 12 weeks of maternity leave and end-of-service gratuity. You remain responsible for sourcing workers, managing their day-to-day work, and funding payroll each cycle.

Boundless as the Employer of Record files all pertinent taxes and social security contributions as they relate to the compliant employment of an individual in their home country.

Boundless partners with employment lawyers and advisers in each country we operate in, including Saudi Arabia. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

The company remains responsible and informs employees of the day-to-day management of the people and teams employed through Boundless, including any disciplinary or performance issues. Boundless ensures compliance with Saudi Arabia-specific procedures, practices, and labour laws while employing people and teams on behalf of the company.

Any new employee who is locally employed through an Employer of Record gets full employment rights and benefits as specified in Saudi Arabian employment law. They get a locally compliant employment contract, statutory parental leave, annual leave, illness benefits, any relevant tax credits, and many more.

Social security contributions in Saudi Arabia depend on employee nationality. Saudi nationals pay approximately 12% (employer) and 10% (employee). Non-Saudi employees are typically subject only to occupational hazard contributions of around 2%, paid by the employer. Saudi Arabia does not impose personal income tax on employment income. Use the salary breakdown calculator for exact figures.