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, statutory filings, benefits required by law, and creating employment agreements.

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.

Things you need to know before hiring in Saudi Arabia

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, 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, 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 generally include Social Insurance and unemployment insurance, together with occupational hazard insurance. In the private sector, the commonly applied rates are 9% social insurance from the employee and 9% from the employer, 1% unemployment insurance from the employee and 1% from the employer, plus 2% occupational hazard insurance from the employer. This results in a total of 10% from employees and 12% from employers, based on the contributory wage.

For comprehensive details, feel free to contact us at Mercans, your trusted choice for Employer of Record services in Saudi Arabia.

Non-GCC Employees

Non-GCC employees are generally covered for occupational hazard insurance only, with the employer contributing 2% of the applicable wage base.

For more detailed information, feel free to contact us at Mercans, your trusted Saudi Arabia Employer of Record.

Bahraini Employees

Bahraini employees may be subject to home-country social insurance coordination rules under the GCC framework. The exact contribution split depends on the employee’s nationality and the currently applicable GCC social insurance rules.

For more in-depth information, feel free to contact us at Mercans, your trusted Employer of Record in Saudi Arabia.

Emirati Employees

Emirati employees may be subject to home-country social insurance coordination rules under the GCC framework. The exact contribution split depends on the employee’s nationality and the currently applicable GCC social insurance rules.

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.

Kuwaiti Employees

Kuwaiti employees may be subject to home-country social insurance coordination rules under the GCC framework. The exact contribution split depends on the employee’s nationality and the currently applicable GCC social insurance rules.

To gain more insights, please reach out to us at Mercans, offering comprehensive EOR solutions in Saudi Arabia.

Qatari Employees

Qatari employees may be subject to home-country social insurance coordination rules under the GCC framework. The exact contribution split depends on the employee’s nationality and the currently applicable GCC social insurance rules.

To gather more details, don’t hesitate to contact us at Mercans, your trusted Global Employer of Record.

Omani Employees

Omani employees may be subject to home-country social insurance coordination rules under the GCC framework. The exact contribution split depends on the employee’s nationality and the currently applicable GCC social insurance rules.

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.

Saudi Arabia Labor Laws

Saudi labor laws regulate working conditions, wages, termination, and health and safety for workers in the private sector. Employment contracts ensure transparency and include social insurance and statutory benefit provisions where applicable, promoting workforce welfare and career growth.

Employment Contracts in Saudi Arabia

There are two main 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 expatriates and may also be used for Saudi nationals.
• The employment contract for a non-Saudi worker must be written and fixed-term.
• If a non-Saudi contract does not specify its duration, it is treated as one year from the worker’s actual commencement date, and if work continues after that period it is deemed renewed for a similar duration.
• Termination is governed by the Labour Law, the contract terms, and the applicable compensation rules.

Indefinite Term Contracts

• Indefinite term contracts are generally used in the local labor market, especially for Saudi nationals.
• If the salary is paid monthly, resignation from an indefinite contract generally requires at least 30 days’ written notice from the employee, while employer termination generally requires at least 60 days’ written notice, unless a longer contractual period applies.

Employee Benefits in Saudi Arabia

Employee benefits in Saudi Arabia typically include health insurance where required, annual leave, paid public 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 compulsory for expatriate workers and is linked to the cooperative health insurance framework, ensuring access to regulated healthcare services while adhering to the country’s legal framework.

Unemployment Insurance

The SANED Law in Saudi Arabia ensures insurance coverage for eligible 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.

Leave Policy

Annual Leave

Employers must provide at least 21 days of paid annual leave per year, increasing to 30 days after five consecutive years of service. The worker must take the leave in the year it is due, subject to the Labour Law rules on scheduling and postponement.

Sick Leave

Employees receive sick leave with full wages for the first 30 days, three-quarters wages for the next 60 days, and 30 days without pay, during a single year starting from the first sick leave date.

Maternity and Paternity Leave

Maternity leave is 12 weeks with full pay. The 6 weeks following childbirth are mandatory, and the remaining period may be distributed in accordance with the Labour Law. In addition, an employee is entitled to 3 days of paid leave in the event of the birth of a child. New mothers are also entitled to nursing breaks in accordance with the Labour Law.

Hajj Leave

Workers who have not previously performed Hajj are entitled to 10 to 15 days of paid leave, including Eid al-Adha holiday, provided they have completed at least 2 consecutive years of service.

Student Leave

Paid leave for approved educational examinations may be available under the Labour Law, subject to the statutory conditions.

Marriage Leave

Employees are entitled to 5 days of paid leave upon marriage.

Bereavement Leave

Employees are entitled to 5 days of paid leave in the event of the death of a spouse, ascendant, or descendant. Additional specific protections and leave rules may apply in certain cases.

Public Holidays

Eid al-Fitr, Eid al-Adha, and Saudi National Day are observed holidays in accordance with the Labour Law and implementing rules.

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 Saudi Arabia

Saudi Arabia does not levy personal income tax on employment income for employees. Separate tax rules may apply to businesses and to specific categories of income under Saudi tax and zakat regulations.

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:

In conclusion, the EOSB plays a significant role in ensuring fair compensation at the end of employment, with specific calculations and regulations for resignations and terminations, all aligned with 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 and related employment administration, helping clients focus on operations while streamlining global mobility for both employers and expatriates.

Best Employer of Record Saudi

Mercans Stands Out as the Leading Employer of Record in Saudi Arabia for the Following Reasons:

• Regulatory Compliance: Mercans ensures full compliance with all regulations set by the Ministry of Human Resources and Social Development (HRSD) and relevant Saudi authorities. It strictly adheres to Saudi Arabia’s employment laws and standards, guaranteeing full legal compliance.
• Independent Operation: Operating as a distinct entity, Mercans offers reliable and customised employment services tailored to the unique needs of businesses in Saudi Arabia.
• Diverse Employment Support: Mercans efficiently manages various forms of employment, including employees, freelancers, contractors, and expatriates, providing flexible solutions to meet a wide range of workforce needs.
• Enterprise-Focused Solutions: Specifically designed to cater to large enterprises, Mercans delivers scalable and sophisticated services that accommodate complex organisational structures.
• Multi-Currency Payroll Management: Mercans facilitates payroll processing in multiple currencies, ensuring seamless financial operations for businesses operating in Saudi Arabia and internationally.
• Global Reach and Payroll Expertise: With a robust international presence, Mercans excels in managing multi-country payroll, enabling smooth operations across borders.
• Data Protection and Compliance: Mercans adheres to rigorous data protection standards, including GDPR compliance and SOC 1 & SOC 2 certifications, ensuring the highest levels of data security.
• ISO Certifications: Mercans holds ISO 20000 and ISO 27001 certifications, reflecting its commitment to excellence in IT service management and information security.
• Security Standards Compliance: Mercans meets the OWASP ASVS 3.0 standards, ensuring strong security practices in application development and management.
• HR Blizz Platform: The proprietary HR Blizz platform is a global payroll and talent management SaaS suite that streamlines payroll processes while ensuring compliance with Saudi regulations. With over 1,000 local experts, it provides in-depth knowledge of employment laws and business practices.
• G2N Nova Payroll Engine: G2N Nova offers global gross-to-net payroll processing across more than 100 countries, making it one of the most advanced payroll engines available. It can be deployed as a SaaS solution or integrated seamlessly with major Human Capital Management and Workforce Management systems.