Saudi Arabia – Employer of Record
Expand your Business in KSA
Connect Resources offers Employer of Record services to employers who want to hire personnel and administer payroll in Saudi Arabia. This, without first creating a branch or subsidiary. Consequently, we will employ your team through our Saudi Arabia PEO in line with regional labor rules. As a result, they will operate on your behalf as if they were an employee of your company to meet your in-country demands.
Our system enables clients to engage staff, sponsor Iqamas, and manage payroll in Saudi Arabia while offloading HR services, tax, and internal control concerns to us. As a PEO expert, we handle employee expenses, legal and market norm benefits, best practices for employment contracts, and termination when necessary. Additionally, we will notify you of any changes to Saudi Arabia’s regional employment legislation.
Your new hire is more committed to your team and becomes productive more quickly thanks to a superior hiring experience. Knowing that each employee is obtaining help from a group of employment professionals will give you peace of mind. With Connect Resources, you can swiftly and easily access the talent of the smartest people in many different countries.
Generally speaking, before agreeing to negotiate an agreement, Saudis respect interpersonal relationships and seek to build them. Meetings might be slow, but there is your chance to put your relationship on solid ground.
Actual business discussions can start after a few getting-to-know-you gatherings. You should be on the lookout for couched expressions that actually indicate “no” because Saudis dislike breaking unpleasant news. Moreover, if decisions are overturned, do not be surprised. Finally, while it is acceptable to inquire about your counterpart’s family, it is inappropriate to inquire directly about his wife.
Saudi Arabia recently stepped up its “Saudization” strategy. The goal of Saudization is to increase the employment of Saudi citizens in the private sector; which is now predominantly dominated by foreign workers. Because of the policies supporting Saudization, it has become exceedingly challenging to sponsor new employment permits for people coming in from outside the nation for the first time to work in the KSA.
It is possible to sponsor Iqamas and visas for expats in Saudi Arabia, but only at a hefty cost. And keep in mind that all new visas must be for Saudis before they are available to expats. As a result, it is always preferable to hire Saudi Arabian nationals who are already in the country and have Iqamas or resident work permits. We can then transfer these individuals to our local partner and assign them to work for our clients. Our team will handle all issues relating to employment contracts, work visa sponsorship, and compliance with local HR regulations.
The best method is to establish a solid, documented employment contract in Saudi Arabia that outlines the conditions of the employee’s pay, perks, and termination obligations. The salary and any other remuneration amounts should always be in Saudi Arabian Riyals in the offer letter and employment contract.
If you utilize our Employer of Record service in Saudi Arabia, there is no need to create a separate employment contract template because since we will do it for you. Also, Saudi nationals will immediately have their contract changed to an unlimited contract after completing three consecutive fixed-term contracts; or after working continuously for four years.
Saudis often work 40 to 48 hours per week. The workday consists of six hours during Ramadan and only Muslim employees receive it. 6 days a week, 8 hours per day. Likewise, workers have the right to overtime pay, sometimes known as time and a half, if they exceed forty hours a week. Also, overtime has no upper limit. Lastly, Saudi Arabia has a Friday and Saturday weekend.
In the Kingdom of Saudi Arabia, there are 2 major holidays during the Islamic year (Eid Al Adha and Eid Al Fitr). The national holidays usually vary and the government usually announce them.
The required amount of vacation time is 21 days. The legal minimum is 30 days beginning with the sixth year of employment. Most firms normally offer 30 days of vacation starting in the first year, with top management generally obtaining 40 or more days. Also, allowing for the carryover time to the following year is acceptable. On the other hand, reducing carryover is also acceptable.
Employees are eligible to four months during sick leave, only if they present the medical certificate. The first month they will obtain 100% of their wage; however, from the following 31 to 91 days, they will receive only 75% of their income and, lastly, during the remainder days they will not obtain pay.
Female workers are eligible to 10 weeks of maternity leave with pay. Thus, they can take no more than a month before the birth and over six weeks after. In addition, they will obtain half of their wage if they have been working for over a year; nonetheless, they can obtain full pay if they have been working for more than 3 years for the same firm. Furthermore, employers must pay medical expenses from the pregnancy and delivery.
While Saudi nationals are eligible for free medical and hospital treatment through the public system, employers have to offer private health insurance to all workers and their families (locals and expatriates); which will be supplied under our Employer of Record service.
Supplemental health insurance, vacation tickets home, educational costs, retirement funds, cell phones, housing benefits, and transit allowances are a few examples of supplementary benefits. For the purpose of allocating the entire employer’s cost including benefits in Saudi Arabia, we often advise budgeting 25% for benefits on top of the gross income.
In Saudi Arabia, probationary periods of no more than 90 days are normal. The time may be prolonged by an additional 90 days with the consent of both the company and the worker. Moreover, trial periods are not mandated by law.
An unlimited contract employee is entitled to a 60-day notice period. Other contract holders have a right to 30 days’ notice. The parties may agree to pay in the event that sufficient notice is not provided. Employees are allowed to use 8 hours of labor time each week during the notice period to look for other job. Since it is uncommon to have a good reason to terminate a definite contract early, there is no notice period for definitive contracts.
Additionally, an employee is eligible for an “end-of-service award” at the conclusion of an employment contract. Therefore, the prize is equal to one-half of one month’s pay for each of the first five years of work and a full month’s pay for each year after that, adjusted for any partial year of service.
GOSI is a requirement that firms pay on behalf of their team. Housing expenses and certain commissions are part of the payments that are assessed against basic salaries. One estimate puts the cost to the employer at 10%. Both Saudi and non-Saudi workers must have their employers contribute to occupational risks insurance at a cost of 2%.
It takes time, money, and complexity to set up a subsidiary in Saudi Arabia and hire a small crew. Connect Resources makes entering Saudi Arabia simple and straightforward. Without having to deal with the hassle of establishing a foreign branch office, we can assist you in hiring the candidate of your choice, deal with HR issues and payroll, and make sure you are in abiding by regional laws.