Saudi Arabia is known for its English-proficient, well-educated, hardworking workforce, and its impact on industries like construction, manufacturing, and oil and gas. It’s only natural that the country caught your eye.

If you’re hoping to add Saudi talent to your existing team, here’s a bit of advice – be methodical. If you don’t provide the right benefits to Saudi job seekers/new employees, expanding into the country will be a monumental struggle. Nationals in this country know the law and expect to be treated very well by their employers, and the government is quick to punish law violators.

In this guide, we’ll share the basics of employee benefits in Saudi Arabia and share tips on how to draft a benefits plan that abides by the Labor Law.

The Rundown on the Kingdom of Saudi Arabia Labor Law

The Kingdom of Saudi Arabia Labor and Workmen Law is your source of truth when it comes to employee benefits. The law houses regulations concerning how employers and employees should operate in a working arrangement. 

You can find the law here in English, though the Arabic version of the law is the actual governing text. A set of new labor law amendments will be coming on February 19th, 2025.

Mandatory Employee Benefits in Saudi Arabia

In Saudi Arabia, there are many mandatory employee benefits that employers must abide by. We’ll touch on the main ones in the sections below:

Working Hours and Weekly Rest

Workers in Saudi Arabia shouldn’t work more than 8 hours a day or 48 hours a week. During Ramadan, work hours shouldn’t exceed 6 hours in a day or 36 hours a week. There are some job sectors and worker types that may work up to 9 hours a day or less than 8 hours a day outside of Ramadan. 

Learn more by reading the Labor Law under Chapter IX.

Minimum Wage

The minimum wage for Saudi Arabians is 4,000 Saudi riyals as of the time of this writing. This figure has been the same for several years, and there’s no sign of it changing anytime soon. Employers that don’t pay this wage could find themselves in trouble with Saudi legal authorities.

Social Insurance

Social insurance benefits go through the General Organization for Social Insurance. The entity administers benefits for retirement, disability, death, and more.

  • Work-related injuries:  Those who find themselves in a work-related accident receive medical care and a daily allowance (among other benefits).
  • Retirement pension: When a worker reaches 60 years old and has contributed to their pension plan for at least 120 months, they get access to pension payouts. Also, those who haven’t yet reached the retirement age of 60 but have contributed toward their pension plan for at least 300 months, can receive a retirement pension. Contribution amounts depend on various factors.
  • Death compensation: If an employee passes away, their family may be entitled to benefits under Saudi law.
  • Disability: Workers who suffer a disability may be entitled to compensation from the employer, the government, or both. 

You can find more information about the Social Insurance law here. 

Leave Allowances

Saudi Arabians can take several types of leave over the course of a year.

Public Holidays

Saudi Arabia has very few public holidays in comparison to other countries. They include:

  • January 1st
  • February 23rd
  • September 23rd
  • The start of Ramadan*
  • Festival of Breaking the Fast*
  • Feast of Sacrifice*
  • Islamic New Year*

*Moving holiday (the date may differ from year to year).

Annual Leave

Annual leave is available to employees who have worked for an employer for at least one year. They get 15 days of leave, and their full wages for these 15 days have to be paid in advance. If the employee has worked for the same employer for 10 years or more, they can take 21 days of leave. And if a worker needs additional leave, and you and the employee agree, you can allow up to 10 days of unpaid leave.

View the table below for a visual representation of these benefits:

Work Term Leave Duration Leave Payment
Less than 1 year 0 days N/A
1 year to less than 10 years 15 days Full wages for 15 days*
10+ years 21 days Full wages for 21 days*
*The payments must be made in advance.

Sick Leave

Sick employees may take 90 days of sick leave during any one year. The first 30 days are payable at 100% and the last 60 days are payable at 75%. There are very specific eligibility requirements that must be met for sick leave to apply.

Maternity Leave

Maternity leave for Saudi women is 4 weeks before the delivery date and 6 weeks after the delivery date. The woman will be paid 50% of her regular salary during her leave if she’s been working for an employer for between 1 to 3 years.

Women who have at least 3 years of work history get 100% pay during the leave. If a woman has been working for an employer for less than one year, she doesn’t receive pay during her leave.

Paternity Leave

Saudi Arabian men get 1 day off with pay when their child is born. A few other leave types include:

  • 5 paid working days off for marriage.
  • 1 paid day off after the death of a spouse or family member.

End-of-service Gratuity

The end-of-service gratuity is mandated whenever a worker’s contract is terminated. This applies whether the work was expected to be short-term or indefinite. The amount you’ll have to pay the employee depends on so many factors that calculating it can be unreasonably difficult.

That’s why the Saudi government created an end-of-service gratuity calculator – you’ll enter information about the working arrangement (contract type, reason for termination, length of service, etc.) and the tool will tell you how much money is due to the employee. 

Health Insurance

For Saudis, there’s a compulsory medical insurance scheme administered through The Council of Health Insurance (CHI). Employers have to enroll their employees in a plan under this entity after hire. The cost of the plan differs from situation to situation.

Supplementary Saudi Arabia Employee Benefits

Now that we’ve gone over the basic mandatory benefits covered in the Kingdom of Saudi Arabia labor law, it’s time to move on to some extra benefits you may want to include in your benefits plans. Depending on the job you’re hiring talent for, some of these may seem more appropriate than others.

  • Private pension insurance: There will be times when the mandated pension simply won’t be enough for your employee to live a comfortable life. Purchasing private pension insurance will ease the burden of future expenses and be very attractive to most Saudi job candidates.
  • Transportation allowance: If your employee will be expected to do a lot of traveling, providing a monthly stipend for travel can be very helpful to them.
  • Extended paternity leave: Paternity leave in Saudi Arabia is very short. Offering an extended leave can make a big difference in the life of a new father.
  • Bonuses for hitting work targets: Performance-based bonuses are great for positions that have clear metrics and goals. Bonuses are typically cash-based but you can get creative if you’d like (you can offer vacations, time off, work-from-home, etc.).

This isn’t an exclusive list of supplementary benefits that would be appealing to Saudi workers. Feel free to brainstorm your own, and always review the labor laws very closely so that you can remain legally compliant.

How to Draft an Employee Benefits Plan that Reels in Good Candidates

Drafting Saudi Arabia employee benefits requires careful planning, methodical execution, and sometimes help from outside experts. Here are some tips to get you started on the right foot:

  • Get informed on the Kingdom of Saudi Arabia labor law. When you have time, read the actual Saudi labor law. Always ignore sources that don’t reference the law.
  • Add all the mandatory benefits to your employee benefits package. Budget for these benefits beforehand and don’t forget to double-check the official law text.
  • Choose and note any supplementary benefits you want to provide. Ensure that the benefits you choose align with your budget and the wants and needs of your future candidates.
  • Compile all of your benefits in a document. This document should spell out all aspects of your proposed benefit plan. Save and store it securely.
  • Repurpose the document for different stages of the recruitment process.
  • Reach out for help at any point. Reach out to a lawyer, HR professional, business consultant, employer of record or professional employer organization for help as needed.

So, there you have it – everything you need to know about employee benefits in Saudi Arabia. We hope you found all the information you were looking for in this guide, and we wish you the best in your attempts to grow your company in the Kingdom of Saudi Arabia.