Employer of Record (EOR) in Saudi Arabia
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An Employer of Record is the legal employer of a worker in Saudi Arabia. This role, often referred to as a Global Professional Employer Organization (Global PEO), involves overseeing various aspects of employment. This includes ensuring the worker follows the local labor laws and regulations closely, managing tasks like payroll, taxes, benefits required by law, and creating employment agreements.
The Employer of Record (EOR) is responsible for:
- Ensuring that the worker’s employment follows the laws of the country.
- Managing the local payroll process.
- Handling the filing of employment-related taxes and necessary paperwork.
- Providing the worker with payslips.
- Distributing the worker’s salary payments.
Streamline your global expansion with our Global PEO services – a hassle-free solution without entity setup. Our Employer of Record (EOR) in the Middle East ensures legal presence, compliance, and IP – Intellectual Property protection, allowing your business to focus on its core. Facilitate seamless global mobility and work visas while building a diverse and efficient global workforce. Partner with Mercans, your Employer of Record in GCC, for a compliant and efficient employment experience for your global workforce.
EOR Solutions in Saudi Arabia
EOR for Prospective Employees
Mercans offers top-tier Employer of Record (EOR) services in Saudi Arabia, handling the entire employment process once your preferred candidate is selected. Our comprehensive solutions cover payroll, benefits, tax compliance, and HR administration, ensuring a seamless and compliant transition. With deep knowledge of Saudi Arabian labor regulations, we manage contracts, salaries, and perks, ensuring legal compliance and efficiency.
EOR and Expert Recruitment Assistance in Saudi Arabia
Mercans offers unmatched Employer of Record (EOR) services in Saudi Arabia, simplifying premier talent onboarding. Our expert team manages the entire process, from candidate selection to seamless integration. We handle contracts, payroll, benefits, tax compliance, and HR administration, ensuring a smooth transition.
Enabling Expat Visa Sponsorship and Global Mobility
Mercans provides comprehensive Employer of Record (EOR) services, streamlining visa sponsorship for expatriates and global mobility. We simplify the journey, managing visa processes and ensuring compliance with local regulations. Our specialized services bridge talent and opportunity, facilitating a seamless transition for expatriate employees.
Agent of Record (AOR) in Saudi Arabia
An “Agent of Record” is a trusted intermediary responsible for ensuring compliance, documentation, and legalities in contractor payments. Mercans EOR in Saudi Arabia excels in this role, standing as the premier choice for seamless, compliant, and efficient contractor payment solutions in the region.
Converting Independent Contractors to Permanent Employees
Mercans EOR in Saudi Arabia emerges as a catalyst for converting independent contractors into permanent employees, navigating the complex regulatory landscape effortlessly. With a blend of experience and technology-driven efficiency, we ensure a seamless transition, focusing on compliance and accuracy throughout.
HCM Integration
Integrate Mercans’ EOR services seamlessly with your HCM system in Saudi Arabia for real-time data exchange, enhanced compliance, and cost-efficiency. Trust our expertise for a unified, compliant, and efficient approach, elevating your workforce management and payroll operations.
Employment in Saudi Arabia
Saudi Arabia’s employment landscape is evolving, driven by initiatives like Saudization. As Saudi Arabia grows economically, understanding employment regulations and Saudization is crucial. Explore our Employer Of Record services for comprehensive support.
Payroll in Saudi Arabia
Payroll in Saudi Arabia is intricate, demanding meticulous attention and comprehensive solutions. Mercans’ employer of record services simplifies the process, ensuring precision, compliance, and operational efficiency.
Social Security Contributions in Saudi Arabia
Summary of Contribution Details for Various Employee Categories in Saudi Arabia:
Saudi Employees
For Saudi employees, contributions encompass Social Insurance (9% from employee, 9% from employer), Unemployment Insurance (0.75% each), and Work Injury (2% from employer). This totals 9.75% from employees and 11.75% from employers, with contributions based on salary.
For comprehensive details, feel free to contact us at Mercans, your trusted choice for Employer of Record services in Saudi Arabia.
| Contribution | Employee rate | Employer rate | Monthly Minimum amount (SAR) | Monthly Maximum amount (SAR) | Calculation base |
|---|---|---|---|---|---|
| Social insurance | 9% | 9% | 1500.00 | 45000.00 | January Basic + housing |
| Unemployment insurance | 0.75% | 0.75% | 1500.00 | 45000.00 | January Basic + housing |
| Work injury | 0% | 2% | 400.00 | 45000.00 | January Basic + housing |
| Total | 9.75% | 11.75% |
Non-GCC Employees
Non-GCC employees share Work Injury (2% from employer), totaling 2% of their salary for employers, based on salary.
For more detailed information, feel free to contact us at Mercans, your trusted Saudi Arabia Employer of Record.
| Contribution | Employee rate | Employer rate | Monthly Minimum amount (SAR) | Monthly Maximum amount (SAR) | Calculation base |
|---|---|---|---|---|---|
| Work injury | 0% | 2% | 400.00 | 45000.00 | January Basic + housing |
| Total | 0% | 2% |
Bahraini Employees
Bahraini employees contribute to Social Insurance (6% from employee, 9% from employer) and Work Injury (2% from employer), resulting in 6% from employees and 11% from employers, based on salary.
For more in-depth information, feel free to contact us at Mercans, your trusted Employer of Record in Saudi Arabia.
| Contribution | Employee rate | Employer rate | Monthly Minimum amount (SAR) | Monthly Maximum amount (SAR) | Calculation base |
|---|---|---|---|---|---|
| Social insurance | 6% | 9% | - | 39798.40 | January total contractual salary |
| Work injury | 0% | 2% | 400.00 | 45000.00 | Basic + housing |
| Total | 6% | 11% | |||
| Exchange rate | 9.95 |
Emirati Employees
Emirati employees contribute to Social Insurance (11% from employee, 9% from employer) and Work Injury (2% from employer), totaling 11% from employees and employers, based on salary.
To obtain additional information, please don’t hesitate to get in touch with us at Mercans, one of the leading EOR service providers in Saudi Arabia.
| Contribution | Employee rate | Employer rate | Monthly Minimum amount (SAR) | Monthly Maximum amount (SAR) | Calculation base |
|---|---|---|---|---|---|
| Social insurance | 11% | 9% | 1020.90 | 51045.00 | January total contractual salary |
| Work injury | 0% | 2% | 400.00 | 45000.00 | Basic + housing |
| Total | 11% | 11% | |||
| Exchange rate | 1.02 |
Kuwaiti Employees
Kuwaiti employees engage in Social Insurance (9.5% from employee, 9% from employer) and Work Injury (2% from employer), resulting in 9.5% from employees and 11% from employers, based on salary.
To gain more insights, please reach out to us at Mercans, offering comprehensive EOR solutions in Saudi Arabia.
| Contribution | Employee rate | Employer rate | Monthly Minimum amount (SAR) | Monthly Maximum amount (SAR) | Calculation base |
|---|---|---|---|---|---|
| Social insurance | 9.5% | 9% | - | 33950.68 | January contractual salary |
| Work injury | 0% | 2% | 400.00 | 45000.00 | Basic + housing |
| Total | 9.5% | 11% | |||
| Exchange rate | 12.35 |
Qatari Employees
Qatari employees participate in Social Insurance (6.0% from employee, 9% from employer) and Work Injury (2% from employer), yielding 6.0% from employees and 11% from employers, based on salary.
To gather more details, don’t hesitate to contact us at Mercans, your trusted Global Employer of Record.
| Contribution | Employee rate | Employer rate | Monthly Minimum amount (SAR) | Monthly Maximum amount (SAR) | Calculation base |
|---|---|---|---|---|---|
| Social insurance | 6.0% | 9% | - | - | January total contractual salary |
| Work injury | 0% | 2% | 400.00 | 45000.00 | Basic + housing |
| Total | 6.0% | 11% |
Omani Employees
Omani employees contribute to Social Insurance (7.0% from employee, 9% from employer) and Work Injury (2% from employer), with 7.0% from employees and 11% from employers, based on salary.
For further information, please don’t hesitate to reach out to us at Mercans, one of the prominent EOR service providers in Saudi Arabia.
Understanding the realm of Social Security Contributions in Saudi Arabia requires delving into pertinent facts and figures. Through our Employer of Record Platform in Saudi Arabia, Mercans brings clarity to this financial commitment, presenting essential information and offering precise solutions that align with local regulations.
Social Security Contributions for Expats
Managing Social Security Contributions for expatriate employees involves navigating specific numeric considerations. Mercans, the employer of record (EOR), leverages its expertise to calculate contributions tailored to expats’ situations, ensuring compliance with regulations and contributing to their long-term financial security.
Social Security Contributions for Employers
Employers, as the employer of record (EOR), carry numerical responsibilities in maintaining accurate Social Security Contributions. Mercans’ solutions simplify these numerical intricacies by providing efficient processes that calculate, manage, and track contributions. By ensuring accurate figures, employers as the employer of record (EOR) can minimize compliance risks and foster financial stability.
Social Security Contributions for Employees
For employees, understanding the numeric aspects of Social Security Contributions is vital for financial planning. Mercans, the employer of record (EOR), empowers employees by providing clear figures and explaining contribution calculations. This numerical transparency fosters employee confidence in their financial well-being.
Social Security Contributions for Non-Locals and GCC Members
Non-local individuals and members of the Gulf Cooperation Council (GCC) encounter unique numerical scenarios concerning Social Security Contributions. Mercans, the employer of record (EOR), solutions account for these distinct figures, offering tailored approaches that consider individual circumstances and regulatory frameworks.
Navigating Numbers for Social Security Contributions
At Mercans, the employer of record (EOR), we combine numeric precision with deep regulatory understanding for Social Security Contributions in Saudi Arabia. By presenting facts and figures clearly, we empower stakeholders – whether expats, employers as the employer of record (EOR), employees, or non-locals – to make informed decisions about contributions. Let Mercans, the employer of record (EOR), be your numerical guide, ensuring compliance, financial security, and confidence in the realm of Social Security Contributions.
Saudi Arabia Labor Laws
Saudi labor laws regulate working conditions, wages, termination, and health and safety for local workers. Employment contracts ensure transparency and include social security and retirement benefits, promoting local workforce welfare and career growth.
Employment Contracts in Saudi Arabia
There are two types of employment contracts in Saudi Arabia, Fixed-Term Contracts and Indefinite Term Contracts, each with distinct terms and conditions.
- Applicable to all expatriates and Saudi nationals on fixed-term basis.
- No minimum or maximum term; expat contracts linked to work permit validity.
- Up to 3 renewals, max duration: 4 years.
- Termination only for “cause,” burden of proof on terminating party.
Indefinite Term Contracts (Saudi Nationals)
- Exclusive to Saudi nationals.
- Termination possible by either party with 60-day notice.
Employee Benefits in Saudi Arabia
Employee benefits in Saudi Arabia typically include health insurance, annual leave, paid public holidays (including religious holidays), and end-of-service benefits as mandated by the Labor Law. Additional benefits may vary based on the employer and industry.
Health Insurance
Health insurance in Saudi Arabia is obligatory for expatriate workers, encompassing medical costs and treatments as per regulations by the Council of Cooperative Health Insurance (CCHI), ensuring access to essential healthcare services while adhering to the country’s legal framework.
Unemployment Insurance
The SANED Law in Saudi Arabia ensures insurance coverage for Saudi contributors in cases of unemployment, provided that all specified conditions in the laws and regulations are met. As a component of the broader social insurance law, it offers a safety net against unemployment, emphasizing the protection of Saudi citizens and their financial well-being during periods of joblessness, while aligning with the comprehensive social insurance framework.
Wage Protection System
The Wage Protection System (WPS) in Saudi Arabia is a government-mandated initiative designed to ensure the timely and accurate payment of wages to employees. It requires employers to process salaries through authorized financial institutions, thereby providing transparency and accountability in salary disbursement. The WPS aims to protect the rights of workers, prevent delayed or unpaid wages, and enhance overall labor market efficiency by closely monitoring wage payments and promoting compliance with labor laws.
Probation Period
In Saudi Arabia, the probation period is a temporary phase at the start of employment, usually lasting three to six months, during which both the employer and employee can assess suitability.
Leave Policy
Annual Leave
Employers must provide 21 days of paid annual leave per year, increasing to 30 days after five years, granted at the start of the year and used within that year. No compensation in place of leave.
Sick Leave
Employees receive 90 paid sick days with full wages for 30 days, then three-quarters for 60 days, plus 30 days of unpaid sick leave if needed.
Maternity and Paternity Leave
Maternity leave is 10 weeks, paid at varying rates based on service years. Fathers get three days of paid parental leave. New mothers are allowed rest periods for nursing.
Hajj Leave
Workers not having performed Hajj receive 10-15 days paid leave for pilgrimage.
Student Leave
Paid leave for student workers on exam days, unless repeating a school year.
Marriage Leave
Newly married employees enjoy three days of paid leave.
Bereavement Leave
5 days for spouse or child’s death, up to 130 days for certain religious conditions.
Public Holidays
Eid al-Fitr (4 days), Arafat Day, Eid al-Adha (3 days), National Day are observed holidays.
| Date | Holiday Name |
|---|---|
| Feb 22 | Foundation Day |
| March 11 | Saudi Flag Day |
| April 21 - April 24 | Eid Al Fitr |
| Jun 27 - July 1 | Eid Al Adha |
| Sep 23 | National Day |
Employee Offboarding
Mercans ensures a seamless offboarding process for employees in Saudi Arabia, encompassing various scenarios such as mutual agreements, employee resignations, and terminations by employers. Each scenario is meticulously handled, adhering to the specific laws and regulations outlined by the Kingdom of Saudi Arabia (KSA).
In cases of mutual agreement, our experts facilitate a smooth transition, considering both parties’ interests and compliance with legal norms. For employee resignations, we ensure all necessary procedures are followed, including exit interviews and documentation.
Termination Policy
Employer-initiated terminations are handled with meticulous attention to detail, emphasizing the avoidance of legal repercussions. Mercans diligently follows KSA’s regulations, reducing risks and potential fines linked to improper termination.
Income Tax in Oman
Oman’s income tax varies for locals and expatriates. Saudi nationals are exempt, while expats pay based on income and residency. This reflects Oman’s tax approach, exempting citizens and involving expats in revenue generation.
End of Service Benefit (EOSB)
The End of Service Benefit (EOSB), also referred to as End of Service Gratuity or End of Service Reward, holds significant importance in employment contracts and varies based on specific circumstances. Here’s how it typically works:
- Notice Period: 1 month
- Minimum Service Period: 2 years
- EOS Gratuity Calculation: Determined by service years and last monthly salary.
- Maximum Settlement Period: If you resign, the EOSB must be settled within 2 weeks from your last work day.
- Expatriate Return Ticket: If you resign during the probationary period, the company provides a return ticket to your home country.
- Notice Period: 1 month
- EOS Gratuity Calculation: Calculated based on service years and last monthly salary.
- Maximum Settlement Period: In case of termination, the EOSB is settled within 1 week from your last work day.
- Expatriate Return Ticket: If you leave through the “Final Exit” process, the company offers a return ticket.
- Additional gratuity possible for one-time payments.
- EOS gratuity is based on your total contractual monthly salary, which includes basic salary and allowances.
- 0 – 2 years: No EOSB
- 2 – 5 years: 1/3 of termination EOSB
- 5 – 10 years: 2/3 of termination EOSB
- 10+ years: Same as termination EOSB
In conclusion, the EOSB plays a significant role in ensuring fair compensation at the end of your employment journey, with specific calculations and regulations for resignations and terminations, all aligned with your years of service and pay structure.
Visa Sponsorship/ Iqama in Saudi Arabia
In Saudi Arabia, Mercans simplifies visa sponsorship (Iqama) for expatriates. As an Employer of Record (EOR), we handle work permits, reducing the cost based on Saudi national ratios. This allows clients to focus on their employees’ operations, streamlining global mobility for both employers and expatriates.
Conclusion
Enter the Saudi Arabian market confidently with Mercans’ efficient EOR solution, ensuring full adherence to the country’s labor laws. Seamlessly manage the intricacies of business expansion, fostering a profitable global presence. Consult Mercans’ in-country experts in KSA to gain comprehensive insights into every facet of expanding your business in Saudi Arabia.