Employer of Record in Saudi Arabia: what one employee really costs

Questions people ask before booking a demo

How much does an employer of record cost in Saudi Arabia?

For one foreign employee at US$60,000 gross a year, the statutory employer charges are GOSI's 2% occupational hazards contribution on basic pay plus housing allowance, and a half-month end-of-service award for each of the first five years. That comes to about 6% on top of salary, or roughly US$298 a month, so the employer cost before any provider fee is about US$5,298 a month. Published employer-of-record fees then run from US$199 to US$699 per employee per month, which puts the all-in cost between about US$5,500 and US$6,000 a month. Work permit, iqama, health cover and repatriation costs sit outside that figure because they are amounts per head rather than a share of pay.

Do you pay GOSI for a foreign employee in Saudi Arabia?

Only the occupational hazards branch. Article 28 of the Social Insurance Law applies that branch to all employees and workers in the Kingdom without a nationality condition, and article 29(1) sets it at 2% of the contributory wage, paid by the employer alone. Article 5(b) keeps non-Saudi workers outside the other branches, so the 11% employer share of the annuities branch and the 1% employer share of unemployment insurance apply to Saudi nationals and not to the foreign hire an employer of record usually places. The contributory wage is capped at SAR 45,000 a month.

Is the end-of-service award in Saudi Arabia a real monthly cost?

It accrues monthly and falls due at the end. Article 84 sets it at half a month's wage for each of the first five years and a full month for each year after that, calculated on the last wage, which is why this page carries 4.1667% and warns that it doubles to 8.33% from the sixth year. Saudi law does not require the employer to fund it month by month, unlike the Israeli severance deposit or the Brazilian FGTS, so it is a provision on the balance sheet rather than a payment. Article 85 then cuts it to one third where the worker resigns after two to five years, so what a departure actually costs depends on who ends the contract and when.

What does Saudi law say about housing for an employee?

Since the 2024 amendment brought in by Royal Decree M/44, article 61 requires an employer to provide appropriate housing and transport, or to pay an adequate cash allowance in their place, and states that the allowance is included in the wage. That last point is what matters to a budget: the allowance becomes part of the base for the end-of-service award, and the housing element is part of the GOSI base as well. It is carried at zero in the ledger above only because the amount is agreed between the parties rather than fixed by a rate.

How much annual leave and notice does Saudi Arabia require?

Article 109 gives at least 21 days of paid annual leave a year, rising to at least 30 days once the worker has completed five consecutive years with the same employer. Eid and other occasions are paid leave under article 112, with the list set by the implementing regulations rather than by the Law itself. Article 24 of the regulations in force since 19 February 2025 sets 10 days: four for Eid al-Fitr, four for Eid al-Adha starting on the day of Arafat, one for National Day and one for Founding Day on 22 February. A holiday day that falls on the weekly rest day is compensated before or after, except where National Day or Founding Day falls inside an Eid holiday. Notice on an indefinite monthly contract is 60 days from the employer and 30 days from the employee under article 75 as amended in 2024.