Employer of Record (EOR) in Saudi Arabia

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.

Employees vs Independent Contractors

In Saudi Arabia’s EOR landscape, precision in distinguishing between employees and independent contractors is crucial. Employees under EOR enjoy labor protections and have their tax and insurance handled, while independent contractors work autonomously without employment benefits. Clear differentiation, guided by Saudi labor law, is vital to avoid legal risks. Rely on Mercans’ EOR services in Saudi Arabia for precise workforce classification and comprehensive support.

Hiring and Recruiting in Saudi Arabia

Facilitating the hiring process in Saudi Arabia, Mercans presents an innovative recruitment solution. This tool streamlines talent sourcing, assessment, and onboarding, ensuring a compliant and efficient recruitment experience in Saudi Arabia’s dynamic job market, particularly in high-demand sectors such as business development, sales, IT, finance, and marketing.

Top #5 Cities in Saudi Arabia With Remote Talent

Cities such as Riyadh, Jeddah, and Khobar are thriving hubs for remote talent, notably in roles like Digital Marketing Specialists, E-commerce Managers, Data Analysts, and Sales Executives, driving business growth through online optimization. The tech sector seeks IT Professionals skilled in cybersecurity and cloud computing for efficient operations. Mercans, through employer of record (EOR) services, sources global talent for these roles, supporting B2B businesses in these cities.

Employee Onboarding

Mercans’ EOR Platform streamlines onboarding for foreign employers, simplifying the integration of remote talent. Through our Employee Self-Serve Portal, new hires complete paperwork digitally, expediting the process. This user-centric interface enables easy document uploads and navigation.

Background Verification

When it comes to hiring new employees, conducting thorough background checks is a critical step to ensure the credibility and suitability of candidates. At Mercans, through our EOR services, we recognize the significance of this process and offer a comprehensive solution that streamlines background verification procedures in Saudi Arabia.

Navigating Background Checks with Mercans:

Collaborating with Mercans provides businesses with a strategic advantage in managing background checks effectively. We possess a unique expertise in Employer of Record (EOR) services, making us well-equipped to handle this essential aspect of the hiring journey.

Compliance and Expertise:

In a complex landscape like Saudi Arabia, adhering to regulations and employment laws is paramount. Mercans’ in-depth understanding of these legal nuances guarantees a meticulous and compliant verification process. Through Mercans EOR, We collaborate closely with our clients to determine the specific background checks needed, ranging from validating government-issued documents to conducting criminal record verifications and more.

Efficiency and Transparency:

Our approach blends advanced technology and a dedicated team to expedite the verification process. By minimizing the risk of fraudulent information, we help employers make well-informed hiring decisions. As an Employer of Record, Mercans adds a layer of transparency to the process, ensuring that background checks align with the highest standards of accuracy and integrity.

A Holistic Approach:

Beyond verification services, Mercans employer of record services offers comprehensive support throughout the hiring journey. From identifying talent to managing onboarding and ensuring legal compliance, we ensure a seamless transition for both employers and employees.

A Trustworthy Partner:

In the dynamic and evolving realm of business, Mercans EOR stands as a reliable partner for comprehensive background verification services in Saudi Arabia. Leveraging our EOR expertise, we guarantee accuracy, compliance, and a secure hiring process. With Mercans, businesses can confidently navigate the intricate path of employee background checks, fostering trust and ensuring the right fit for their organizations.

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.

Payroll Cycle in KSA:

In Saudi Arabia, payroll operates on a monthly basis, involving stages like setup, salary calculations, and reporting. Mercans’ Employer Of Record services handle these tasks with precision.

Local Currency Payments:

Paying in local currency boosts convenience and minimizes currency exchange complexities. Mercans facilitates this with multi-country payment solutions.

Payroll Setup, Processing, Administration:

From configuring software to processing salaries and managing leave balances, Mercans’ EOR services handle every payroll aspect efficiently in Saudi Arabia.

Statutory Filings and Payments:

Compliance with local regulations is crucial. Mercans offers seamless support for statutory filings, ensuring compliance with Saudi Arabian laws.

Mercans: Your Trusted Payroll Partner in KSA:

Mercans’ expertise in Employer Of Record services extends to multi-country payroll management, providing accurate and streamlined payroll operations across various locations.

Cost to Hire an Employee in Saudi Arabia

In Saudi Arabia, employment costs extend beyond salaries and include employer payroll contributions, including both employer and employee social security payments. These costs vary based on the employee’s nationality, whether Saudi, from a GCC country, or outside the GCC. Understanding these intricacies is essential for accurate budgeting and compliance. For detailed insights, reach out to our expert team in employer of record services.

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.

ContributionEmployee rateEmployer rateMonthly Minimum amount (SAR)Monthly Maximum amount (SAR)Calculation base
Social insurance9%9%1500.0045000.00January Basic + housing
Unemployment insurance0.75%0.75%1500.0045000.00January Basic + housing
Work injury0%2%400.0045000.00January Basic + housing

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.

ContributionEmployee rateEmployer rateMonthly Minimum amount (SAR)Monthly Maximum amount (SAR)Calculation base
Work injury0%2%400.0045000.00January Basic + housing

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.

ContributionEmployee rateEmployer rateMonthly Minimum amount (SAR)Monthly Maximum amount (SAR)Calculation base
Social insurance6%9%-39798.40January total contractual salary
Work injury0%2%400.0045000.00Basic + housing
Exchange rate9.95

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.

ContributionEmployee rateEmployer rateMonthly Minimum amount (SAR)Monthly Maximum amount (SAR)Calculation base
Social insurance11%9%1020.9051045.00January total contractual salary
Work injury0%2%400.0045000.00Basic + housing
Exchange rate1.02

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.

ContributionEmployee rateEmployer rateMonthly Minimum amount (SAR)Monthly Maximum amount (SAR)Calculation base
Social insurance9.5%9%-33950.68January contractual salary
Work injury0%2%400.0045000.00Basic + housing
Exchange rate12.35

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.

ContributionEmployee rateEmployer rateMonthly Minimum amount (SAR)Monthly Maximum amount (SAR)Calculation base
Social insurance6.0%9%--January total contractual salary
Work injury0%2%400.0045000.00Basic + housing

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.

Saudi Arabia Labor Laws for Expats:

Expats benefit from labor laws covering contracts, wages, hours, leave, and repatriation. Anti-discrimination measures protect their rights, and contracts establish terms of engagement. These laws also address residency permits, visas, and social security, ensuring expat welfare and legal standing, promoting a harmonious work environment within Saudi Arabia’s unique cultural and economic context.

Working Hours

In Saudi Arabia, the standard working week is six days from Saturday to Friday, with Friday being the primary day off (Most companies follow a 5-day workweek.), and working hours typically vary between the public and private sectors. As for working hours, they typically vary across the public and private sectors. In the public sector, working hours are usually from 7:30 AM to 2:30 PM, with a lunch break in between.

Ramadan Working Hours

During Ramadan, the working hours are 6 hours/day, 36 hours/week, with a total maximum of 10 hours/day and 60 hours/week, including regular and overtime hours. Additionally, there are 4 days for Eid al-Fitr, 4 days for Eid al-Adha, and 1 day for Saudi National Day as public holidays.

Minimum Wages

In Saudi Arabia, there is currently no officially established minimum wage for those employed in the private sector. However, the public sector does have a minimum wage rate of 3,000 Saudi riyals.

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.

Fixed-Term Contracts:
  • 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.

DateHoliday Name
Feb 22Foundation Day
March 11Saudi Flag Day
April 21 - April 24Eid Al Fitr
Jun 27 - July 1Eid Al Adha
Sep 23National 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.

Applicable Pay Elements:

Additional gratuity possible for one-time payments.

EOS gratuity is based on your total contractual monthly salary, which includes basic salary and allowances.

EOS Gratuity Calculation (Years of Service):

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

Maximum EOS Gratuity:

Varies based on your total years of service.

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.


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.

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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