--- title: "Saudi Arabia Employer Cost Breakdown 2026 | GOSI, EOSG" description: "Saudi Arabia employer cost 2026: 11.75% GOSI on Saudi nationals, 2% on expatriates, zero income tax, plus EOSG gratuity. Full line-by-line breakdown." canonical: https://www.teamed.global/country-hiring-guides/saudi-arabia/cost-breakdown --- Saudi Arabia · Cost breakdown child Served by Teamed vetted partner-entity network in Saudi Arabia # How much does it really cost to *hire in Saudi Arabia* in 2026? Saudi Arabia charges no personal income tax on any employee. But GOSI adds 11.75% above gross salary for Saudi nationals, and end-of-service gratuity adds 15 days of wage per completed year from day one. Expatriate hires carry a lighter 2% GOSI rate but the same EOSG obligation. Get both lines into the budget before you send the offer. Last reviewed 13 June 2026 · Saudi Arabia guide ![The Riyadh skyline at dusk with the Kingdom Centre Tower lit against a deep blue sky, viewed from a wide boulevard.](/images/country-guides/saudi-arabia-cost-breakdown.webp) Illustration · Riyadh, Saudi Arabia Answer.cite this Saudi Arabia levies no personal income tax on employment income. That applies to both Saudi nationals and expatriate employees. The payroll cost stack is built on two things instead: GOSI contributions and end-of-service gratuity (EOSG). GOSI for Saudi national employees costs the employer 11.75% of the contributory wage. For expatriate employees the rate is 2%, covering occupational hazards only. Contributions are capped at a monthly wage base of SAR 45,000/month. EOSG accrues from the first completed year of service. The rate is 15 days of wage per year for the first five years. After five years it rises to 30 days per year. Budget this liability every month, not just at exit. ![A tidy office desk in Riyadh with a calculator, a Saudi riyal note, and a neatly arranged payroll summary sheet under a warm desk lamp.](/images/country-guides/saudi-arabia-cost-breakdown-polaroid-1.webp) Adding it up ## The headline: what a Saudi Arabia hire actually costs Start with the gross salary. There is no income tax to withhold. For expatriate hires, add 2% GOSI. For Saudi national hires, add 11.75% GOSI on earnings up to SAR 45,000/month. The table below shows illustrative totals at a SAR 120,000 annual salary. These are computed from verified statutory rates and labelled illustrative. They are not statutory figures. The Saudi Arabia employer cost structure differs from most countries because there is no income tax to administer and the GOSI rate depends on whether the hire is a Saudi national or an expatriate. The cost driver for both categories is end-of-service gratuity, which accrues from the first completed year of service. | Line | Illustrative cost on SAR 120,000 annual salary (expatriate hire) | Source | | --- | --- | --- | | Gross salary | SAR 120,000 | Contract | | GOSI employer contribution at 2% (occupational hazards, expatriate rate) | SAR 2,400 per year (illustrative) | [GOSI contribution rates 2026, Mercans](https://mercans.com/resources/statutory-alerts/saudi-arabia-gosi-contribution-rates-saned-unemployment-fund-2026/) | | EOSG reserve: 15 days of monthly wage per completed year (first 5 years) | SAR 6,000 per year (illustrative) | [Saudi Labor Law Article 84](https://saudieosbcalculator.com/calculation/) | | Annual leave: 21 days paid leave (under 5 years service), built into salary cost | Included in salary | Saudi Labor Law Article 109 | | Public holidays: 10 official occasions, built into salary cost | Included in salary | Saudi Labor Law Article 112 | | Sick pay reserve at full pay for 30 days per year (average incidence) | SAR 1,600 average exposure (illustrative) | Saudi Labor Law Article 117 | | **Total illustrative employer cost (expatriate hire, before Teamed fee)** | **SAR 130,000 (illustrative)** | **~108% of gross** | These figures are illustrative. The GOSI line uses 2% applied to the full annual salary (below the SAR 45,000/month cap in this example). The EOSG line applies 15 days of monthly wage per year: SAR 10,000 per month divided by 30 days multiplied by 15. The sick pay reserve assumes two days of average absence per year. These are not statutory figures. Actual totals vary with actual wage structure, absence rates, and benefits provided. For a Saudi national hire, replace the 2% GOSI line with 11.75%, which would add approximately SAR 14,100 instead of SAR 2,400 on the same salary (illustrative). Add Teamed from $599 per employee per month. Use the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to run your own salary figures. 1. Identify national or expatriate status Confirm whether the hire is a Saudi national or an expatriate. The GOSI employer rate differs substantially between the two. Get this right before you model anything else. 2. Calculate GOSI on the contributory wage Apply the employer GOSI rate to basic salary plus housing allowance, up to the monthly wage base cap. Transport allowances and bonuses are excluded from the contribution base. 3. Build in the EOSG accrual Reserve the equivalent of the statutory daily rate multiplied by accrual days per completed year. Treat it as a monthly accrual from the first month, not a one-off exit cost. 4. Layer in statutory leave and sick pay Annual leave is built into salary. Budget separately for sick pay tiers and any maternity or paternity leave as event-driven costs rather than fixed monthly lines. 5. Plan the final settlement window Map the final pay deadline into your offboarding workflow from day one. Employer-initiated termination requires full settlement within the statutory deadline. Resign-initiated departures carry a longer window. ## GOSI contributions: the rate depends on who you are hiring GOSI is the General Organization for Social Insurance. It is the Saudi social security system. The employer contribution rate is different for Saudi national employees and for expatriate employees. For Saudi nationals on the existing GOSI system, the employer pays 11.75% and the employee pays 9.75%. For expatriate employees, the employer pays 2% and the employee pays 0%. GOSI contributions are calculated on basic salary plus housing allowance, not on total package. Other allowances (transport, food, bonus) are excluded from the contribution base. The monthly wage base is capped at SAR 45,000/month. Salary above this cap does not attract additional GOSI. GOSI · Contribution rates 2026 For Saudi national employees on the existing registration system: employer rate **11.75%** (9% pension + 2% occupational hazards + 0.75% SANED unemployment). Employee rate **9.75%** (9% pension + 0.75% SANED). For expatriate employees: employer rate **2%** (occupational hazards only). Employee rate **0%**. Contribution base is capped at **SAR 45,000/month**. Source: [GOSI contribution rates and SANED, Mercans 2026](https://mercans.com/resources/statutory-alerts/saudi-arabia-gosi-contribution-rates-saned-unemployment-fund-2026/) ### The new GOSI system for recent joiners Saudi national employees registered with GOSI from 3 July 2024 fall under a new contribution schedule. The employer rate for this group was 12.25% for the first half of 2026. From July 2026 it rises to 12.75% as part of an annual uplift schedule. The existing-system rate of 11.75% applies only to employees registered before that date. ### Contribution base: basic salary plus housing allowance GOSI is not calculated on total compensation. It applies to basic salary plus housing allowance only. An employee earning SAR 15,000 total with SAR 8,000 basic and SAR 4,000 housing accumulates GOSI contributions on SAR 12,000, not SAR 15,000. Structure the salary offer clearly. The split between basic, housing, and other allowances determines the GOSI liability, not the total package figure. ### The SANED unemployment component SANED (Unemployment Insurance) is a fund that provides short-term income support to Saudi nationals who lose their jobs. Both employer and employee contribute 0.75% each toward SANED as part of the overall GOSI rate. Expatriate employees are not covered by SANED and neither employer nor employee pays the SANED portion for expatriate hires. ## End-of-service gratuity: the cost that builds every month Saudi labor law requires employers to pay an end-of-service gratuity (EOSG) to employees who leave after completing a qualifying period of service. On employer-initiated termination, the rate is 15 days of wage per completed year for the first five years. It rises to 30 days per year beyond five years. On resignation, the fraction depends on tenure. EOSG is calculated on the actual or last wage, which includes basic salary and all fixed allowances. It is not capped at a monthly ceiling the way GOSI is. A senior employee on a high package can carry a large EOSG liability. Budget it as a monthly accrual, not a future contingency. ### EOSG rates on employer termination | Years of service | EOSG accrual rate | Illustrative annual reserve on SAR 10,000/month wage | | --- | --- | --- | | Year 1 to year 5 | 15 days of monthly wage per completed year | SAR 5,000 per year (illustrative) | | Year 6 and beyond | 30 days of monthly wage per completed year | SAR 10,000 per year (illustrative) | These illustrative figures apply the statutory daily rate (monthly wage divided by 30, then multiplied by the number of accrual days) to a base monthly wage of SAR 10,000. They are not statutory figures. Actual EOSG will vary with the employee's actual wage at departure and the exact tenure in completed years. ### EOSG on resignation When an employee resigns, the entitlement is reduced depending on tenure. For service between two and five years, the employee receives one-third of the full award. Between five and ten years, the fraction is two-thirds. At ten years or more, the employee receives the full award just as in an employer-initiated departure. There is no EOSG entitlement for an employee who resigns within the first two years. ### How EOSG interacts with arbitrary dismissal compensation If a court finds that a termination on an indefinite contract was arbitrary under Article 77, the employee is entitled to additional compensation on top of EOSG. The minimum floor for Article 77 compensation is 8 weeks of wages. There is no statutory maximum; courts determine the amount. Good documentation throughout employment is the practical mitigation. See the [Saudi Arabia termination guide](/country-hiring-guides/saudi-arabia/termination-and-severance) for the full procedure. ## Leave costs: what Saudi labor law requires Every employee gets 21 days of paid annual leave in the first five years of service. After five completed years with the same employer, this rises to 30 days per year. Sick leave runs in three tiers per year. The first 30 days are at full pay. The next 60 days are at 75% of basic salary. The final 30 days are unpaid. ### Annual leave Saudi Labor Law Article 109 sets the leave entitlement. Employees in their first five years of service receive 21 days per year. After five consecutive years with the same employer, the entitlement rises to 30 days. Leave is paid at the employee's wage rate. Unused leave can be carried forward or paid out on termination. Budget the full entitlement from hire date. It is accruing whether or not it has been taken. ### Public holidays Saudi Arabia observed 10 official public holiday occasions in 2026, including Foundation Day, Eid al-Fitr, Eid al-Adha, and National Day. Islamic holiday dates are confirmed by moon sighting close to the date and can shift by one day. The King may extend holiday periods by decree. Build 10 paid occasions into the annual cost model; actual calendar days may exceed this count. ### Sick leave The annual sick leave cycle under Article 117 gives employees up to 120 days per year in total. The first 30 days are employer-funded at full pay. The next 60 days are at 75% of basic salary. The last 30 days are unpaid. After the 120-day maximum the employer may terminate for medical incapacity, but must settle all final entitlements including accrued EOSG. ### Maternity and paternity leave Maternity leave is 12 weeks at 100% of salary. This is an employer cost. There is no state reimbursement in the private sector. At least six weeks must be taken after delivery. The remaining six weeks may be taken from four weeks before the expected delivery date. Paternity leave is 3 days of paid leave, introduced by the February 2025 amendments. It must be taken within seven days of the child's birth. It is employer-funded. ### What to budget for Annual leave is built into the salary. Sick pay risk is modest for most teams but concentrates when it hits. Maternity pay is the largest event-driven cost at 100% of salary for 12 weeks. None of these are optional. All apply from day one of employment. ## The costs that do not appear in the first quote Three lines sit outside the standard GOSI and EOSG loading. They are real costs that emerge after hire: the final settlement deadline risk, the collective dismissal approval process, and the Saudization (Nitaqat) implications for team mix. None of these are unavoidable. All of them can be planned at the offer stage if you know they are coming. ### Final settlement deadline When you terminate an employee, all final entitlements including EOSG, unpaid wages, and accrued leave must be paid within 7 days of the last day of employment. When an employee resigns, the deadline is 14 days. These timelines are stricter than a normal payroll cycle. Missing them exposes the employer to penalties under the Wage Protection System. Build the final settlement calculation and payment into your offboarding workflow, not into the next payroll run. ### Collective dismissal process and the 45-day review window If you need to reduce headcount among Saudi national employees in a collective dismissal, you must notify the Ministry of Human Resources and Social Development (MHRSD) at least 60 days before the effective date. Once notified, the ministry review committee has 45 days to respond. The committee may approve, reject, or propose alternatives. This process adds significant lead time and uncertainty to any restructuring that affects Saudi national employees. Budget for it well ahead of any planned reduction. ### Saudization quotas and the cost of compliance The Nitaqat programme requires private-sector employers to maintain a minimum percentage of Saudi national employees. The quota varies by industry and company size. Hiring a Saudi national rather than an expatriate adds 11.75% GOSI instead of 2%. That is a real cost difference of roughly 9.75 percentage points on the GOSI line. Factor this into your workforce planning model, not just your individual-hire cost estimate. ### Working time and Ramadan obligations The standard working week is 48 hours. During Ramadan, Muslim employees work 48 hours minus 12 hours (reduced to 36 hours per week, 6 hours per day). The employer pays the same wage for fewer hours during Ramadan. This is not a cost line that appears in a standard salary model but it affects productivity and scheduling. Build the Ramadan calendar into your operational planning each year. ## How Teamed handles Saudi Arabia employment costs for you Teamed becomes your legal [employer of record](/lp/employer-of-record) in Saudi Arabia for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency. GOSI filings, EOSG accruals, Wage Protection System submissions, and the full Saudi employment compliance stack run on **one platform**. **Real HR and legal experts** handle your Saudi hires from the first offer letter through every GOSI submission, monthly WPS payroll filing, and final settlement payment within the 7 days-day window. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**. Every employer cost **passes through at cost, itemised** on every invoice. You see the GOSI line, the EOSG accrual line, and the leave liability line. Nothing is hidden inside the management fee. EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A Saudi contractor who converts to full employment keeps their record. That same employee can **graduate** from EOR to your own Saudi entity without switching systems. EOR is the right structure for a first Saudi hire, **until it isn't**. Teamed does not lock you in. Start from the Saudi Arabia hiring overview or run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to see the full picture. ## Frequently asked questions What does it cost to hire someone in Saudi Arabia in 2026? For an expatriate hire, the main costs above gross salary are GOSI at 2% (occupational hazards only), end-of-service gratuity accruing at 15 days of wage per completed year for the first five years, and paid leave obligations. There is no personal income tax on employment income for any employee. For a Saudi national hire, GOSI rises to 11.75% on the contributory wage (basic salary plus housing allowance, capped at SAR 45,000/month). How is EOSG calculated in Saudi Arabia? EOSG under [Saudi Labor Law Article 84](https://saudieosbcalculator.com/calculation/) accrues at 15 days of wage per completed year for the first five years and 30 days per year beyond five years. The calculation is based on the employee's actual or last wage, which includes basic salary and all fixed allowances. When an employee resigns between two and five years of service, they receive one-third of the full award. Between five and ten years, they receive two-thirds. At ten years or more on resignation, the full award applies. Is there a minimum wage in Saudi Arabia? Yes, but it applies to Saudi national employees in the private sector only. The minimum is SAR 4,000/month under the Nitaqat Saudization framework. There is no statutory minimum wage for expatriate workers. Expatriate salaries are set by contract and market conditions. How much annual leave does a Saudi Arabia employee get? Every employee gets 21 days of paid annual leave per year for the first five years of service under [Saudi Labor Law Article 109](https://www.skuad.io/employment-laws/saudi-arabia). After five consecutive years with the same employer the entitlement rises to 30 days per year. In addition, there are 10 official public holiday occasions per year. What is the deadline for paying EOSG and final wages in Saudi Arabia? When the employer terminates the contract, all final entitlements including EOSG, accrued leave pay, and outstanding wages must be settled within 7 days of the last day of employment under [Article 88 of the Saudi Labor Law](https://saudieosbcalculator.com/settlement/payment-timeline/). When the employee resigns, the employer has 14 days to pay. Missing these deadlines can trigger penalties under the Wage Protection System. Teamed Legal Operations The most common Saudi Arabia budgeting error we see is treating EOSG as an exit cost rather than a monthly accrual. The liability builds from the first completed year of service. An employee who leaves at year three has three years of gratuity waiting. If the employer has not set aside a monthly reserve, the exit hits the cash flow all at once. Model it as a payroll line, not a severance provision. A note from Tom Price-Daniel No personal income tax. But 11.75% GOSI on Saudi nationals and 15 days of wage per year in EOSG accruing from day one. Add 21 days paid leave, 10 public holidays, and the 7 days-day final settlement window that most budgets miss. Know every line before you send the offer. Tom Price-Daniel · Co-founder, Teamed ## Related Saudi Arabia guides - Hiring in Saudi Arabia, overviewparent - [Saudi Arabia tax and payroll](/country-hiring-guides/saudi-arabia/tax-and-payroll)sibling - [Saudi Arabia termination and severance](/country-hiring-guides/saudi-arabia/termination-and-severance)sibling - [UAE employer cost breakdown](/country-hiring-guides/united-arab-emirates/cost-breakdown)neighbour - [Employer of Record overview](/lp/employer-of-record)core - [Pricing, Zero FX Fixed](/pricing)core - [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool - [Talk to an expert](https://www.teamed.global/contact)CTA A note on this page. This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with the Ministry of Human Resources and Social Development (MHRSD) and GOSI before relying on any specific figure. Worked examples in this guide are illustrative only and computed from statutory rates. They are not statutory figures. GOSI contribution rates for Saudi nationals registered from 3 July 2024 follow a new schedule with annual uplifts; the existing-system rate applies to employees registered before that date. The February 2025 Saudi Labor Law amendments changed maternity leave, paternity leave, probation periods, and notice obligations; all figures in this guide reflect the post-amendment position.