Payroll Outsourcing in Saudi Arabia
Fully managed payroll in Saudi Arabia (KSA): GOSI contributions, Wage Protection System files and end-of-service accruals handled for Saudi and expatriate staff, with a named specialist a phone call away.
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What our payroll services in Saudi Arabia cover
Saudi Arabia has no personal income tax, so payroll centres on GOSI social insurance, salaries paid through the Wage Protection System and the end-of-service award every employee builds up. The rules differ for Saudi nationals and expatriates, and a new Social Insurance Law is raising pension contributions for Saudis who join the system for the first time.
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Calculate Your Employee Costs in Saudi Arabia
Enter a gross annual salary (basic salary plus housing allowance) to see the employer’s GOSI cost in 2026 for a Saudi employee registered before July 2024: 9% pension, 0.75% SANED and 2% occupational hazards, up to SAR 45,000 a month.
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*Indicative figures only and not definitive legal advice. Local regulations change frequently. Consult an expertSaudi Arabia
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Employer Costs in Saudi Arabia Explained
A Saudi employee costs about 11.75% on top of basic salary and housing allowance in GOSI contributions, and an expatriate 2%, before the end-of-service award, medical insurance and government fees. The exact figure depends on the employee’s nationality and when they joined GOSI. Here’s the breakdown.
Saudi employees are covered by the pension (annuities) branch, SANED unemployment insurance and the occupational hazards branch. For those registered before 3 July 2024, the employer and the employee each pay 9% to the pension branch and 0.75% to SANED, and the employer pays 2% for occupational hazards: 11.75% from the employer and 9.75% from the employee.
Contributions are calculated on basic salary plus housing allowance, with a maximum contributory wage of SAR 45,000 a month; other allowances, such as transport, are not included. The employer deducts the employee’s share from salary and pays both to GOSI every month. Late payment carries a fine of 2% of the amount due for each month of delay.
The Social Insurance Law issued by Royal Decree M/273 applies to Saudis who join the system for the first time from 3 July 2024, with no earlier contribution periods. Their pension contribution, split equally between employer and employee, started at 18% and rises by one point a year: 19% from July 2025, 20% from July 2026, 21% from July 2027 and 22% from July 2028, when each side pays 11%.
The pension age for these employees is 65. Employees who were already contributing before July 2024 stay on the previous rates of 9% each, so a payroll in Saudi Arabia now runs two sets of pension rates side by side.
Non-Saudi employees are covered only by the occupational hazards branch, which the employer pays at 2% of basic salary and housing allowance; no GOSI contribution is deducted from their pay. Under the Labor Law, an expatriate’s contract without a stated term is treated as a one-year contract renewed for the same period, and the employer bears the fees for their work permit and residence permit (Iqama).
Employers of foreign workers also pay a monthly expat levy for each one. Saudization targets under the Nitaqat programme set the share of Saudi nationals each company must employ, by sector and size, and missing them restricts new work permits.
For a Saudi employee registered with GOSI before July 2024, with a basic salary of SAR 12,000 and a housing allowance of SAR 3,000 a month, the employer pays SAR 1,350 to the pension branch, SAR 112.50 to SANED and SAR 300 for occupational hazards: SAR 1,762.50, a monthly cost of SAR 16,762.50, or 11.75% on top of pay, before the end-of-service accrual and medical insurance.
The employee pays SAR 1,350 of pension and SAR 112.50 of SANED, SAR 1,462.50 in all, and receives SAR 13,537.50, with no income tax. An expatriate on the same package costs SAR 15,300 a month in GOSI terms and keeps the full SAR 15,000, before the expat levy and permit fees.
Working hours are up to eight a day and 48 a week, reduced to six a day and 36 a week for Muslim employees during Ramadan. Overtime is paid at the hourly wage plus 50% of the basic wage, or with time off if the employee agrees. Employees get 21 days of paid annual leave, 30 after five years of service, and since the 2025 amendments to the Labor Law maternity leave is 12 weeks on full pay and fathers get three days.
Probation can be agreed for up to 180 days. For indefinite contracts, the employee gives 30 days’ notice and the employer 60. The end-of-service award is half a month’s wage for each of the first five years and a full month’s wage for each year after; employees who resign receive a third of it after two to five years, two thirds after five to ten and all of it after ten.
Saudi payroll contributions, 2026
| Item | Employer | Employee | Applies to |
|---|---|---|---|
| Pension, registered before 3 July 2024 | 9% | 9% | Saudi nationals |
| Pension, first registered from 3 July 2024 | 10% | 10% | Saudi nationals, from July 2026; 11% each from July 2028 |
| SANED unemployment insurance | 0.75% | 0.75% | Saudi nationals |
| Occupational hazards | 2% | — | All employees, Saudi and expatriate |
| Contributory wage | Basic plus housing | Basic plus housing | Up to SAR 45,000 a month |
| Personal income tax | — | None | No tax is withheld from salaries |
| Late GOSI payment | 2% a month | — | Of the contributions due |
| End-of-service award | Accrued | — | Half a month’s wage a year for five years, then a full month |
GOSI contributions by employee group, from July 2026
| Branch | Saudi, registered before 3 July 2024 | Saudi, first registered from 3 July 2024 | Expatriate |
|---|---|---|---|
| Pension, employer | 9% | 10% | — |
| Pension, employee | 9% | 10% | — |
| SANED, employer | 0.75% | 0.75% | — |
| SANED, employee | 0.75% | 0.75% | — |
| Occupational hazards, employer | 2% | 2% | 2% |
| Total employer | 11.75% | 12.75% | 2% |
| Total employee | 9.75% | 10.75% | — |
Gross to net and employer cost in Saudi Arabia, monthly
| Employee | Basic and housing | Employee GOSI | Net pay | Employer GOSI | Total monthly cost |
|---|---|---|---|---|---|
| Saudi, registered before July 2024 | SAR 15,000 | SAR 1,462.50 | SAR 13,537.50 | SAR 1,762.50 | SAR 16,762.50 |
| Saudi, first registered from July 2024 | SAR 15,000 | SAR 1,612.50 | SAR 13,387.50 | SAR 1,912.50 | SAR 16,912.50 |
| Expatriate | SAR 15,000 | — | SAR 15,000.00 | SAR 300.00 | SAR 15,300.00 |
The gross-to-net table assumes a basic salary of SAR 12,000 and a housing allowance of SAR 3,000 a month, with no other allowances, and the pension rates in force from July 2026. Employer costs exclude the end-of-service accrual, medical insurance, the expat levy and permit fees. These are TopSource calculations from the verified rates.
Rates and thresholds shown were verified on 12 October 2026 against the Social Insurance Law (Royal Decree M/273, official translation of the Bureau of Experts) and the General Organization for Social Insurance’s guidance on contributions and contributory wages; labour rules reflect the Labor Law as amended in 2025. This page is general information, not tax or legal advice.
How payroll outsourcing in KSA works with TopSource
Why Choose TopSource for Payroll Outsourcing in Saudi Arabia
TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option.
We don’t hide fees or sneak price increases. We run Saudi payroll in-house and file under your own GOSI and Mudad registrations rather than a bureau’s, so the same team that pays your contributions answers your calls. You get a named account manager, one consolidated monthly invoice covering salaries, contributions and fees, and one live Portico view of Saudi Arabia beside every other country we run for you, across the Middle East and beyond. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified.
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Accelerating your growth in Saudi Arabia and beyond
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Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way.
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Saudi Arabia payroll FAQs
For Saudi employees registered before July 2024, employers pay 11.75% of basic salary and housing allowance to GOSI: 9% pension, 0.75% SANED and 2% occupational hazards. For expatriates, only the 2% occupational hazards contribution applies.
No. Saudi Arabia does not tax employment income, so no income tax is withheld from salaries. Saudi employees have GOSI pension and SANED contributions deducted; expatriates have no GOSI deduction.
Saudis first registered with GOSI from 3 July 2024 fall under the new Social Insurance Law: their pension contribution is 10% each for employer and employee from July 2026, rising to 11% each from July 2028. Those registered earlier stay at 9% each.
Contributions are calculated on basic salary plus housing allowance, up to SAR 45,000 a month. Other allowances, such as transport, are not included.
It requires employers to pay salaries through banks and report them through the Mudad platform, so the Ministry of Human Resources and Social Development can check that every employee is paid on time and in full. Late or missing salaries can lead to penalties.
A Saudi employee registered before July 2024 on SAR 15,000 a month in basic salary and housing costs SAR 16,762.50 a month in GOSI terms, 11.75% on top, before end-of-service and medical insurance. Tell us the role, nationality and package and we’ll send the full cost within one business day.
Half a month’s wage for each of the first five years of service and a full month’s wage for each year after, paid when employment ends. Employees who resign receive a third after two to five years, two thirds after five to ten and the full award after ten.
For indefinite contracts, 30 days when the employee ends the contract and 60 days when the employer does, since the 2025 amendments to the Labor Law. Probation can be agreed for up to 180 days.
12 weeks on full pay since the 2025 amendments to the Labor Law, six of them after the birth. Fathers get three days of paid leave.
Running payroll in Saudi Arabia means registering with GOSI, the Ministry of Human Resources and Mudad, and sponsoring expatriates’ permits, which requires a licensed Saudi entity. TopSource can run payroll for your Saudi entity or employ your team through our Employer of Record service.
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