Payroll Requirements and Benefits for Expats in Saudi Arabia

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AC Magesh
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Secondment of your skilled resources overseas is one of the best methods to establish a strong global presence. This has been proven time and again, thus leading to globalisation. Saudi Arabia is one of the most popular venues where businesses (especially India) deploy their resources. Saudi Arabia is a very popular venue for expats, and for obvious reasons.

Majority of expats come to Saudi Arabia for a single reason: Savings. The country has opportunities in large numbers, and its industrialized economy offers expats a chance to earn twice or even thrice the amount they earn back in their home country for the same job.


The benefits in the professional world are equally lucrative. Many surveys have found that Saudi Arabia has great employment opportunities for the job seekers. Nearly 49% of the professionals in this location have had a rapid rise in their career.

Better Career Opportunities & Salary Packages

The basic salary plus benefits and additional incentives type pay structure in this country makes a majority of the professionals extremely satisfied.

No More Taxes

This is a benefit that is quite unparalleled in the world of those who look to moving to KSA for the high income and savings. Starting from July 2017, expats began paying a family tax of SAR 100 per month for every minor or unemployed relative living in the country. There is no individual income tax scheme in Saudi Arabia, and as such no deductions are needed.

Housing and Transportation

Saudi Arabia goes out of the way to ensure the comfort and satisfaction of the employees. While in other countries, only a few companies provide this benefit, all the companies in Saudi provide substantial housing and transportation allowances. The labour law entitles all working expats with either a car or a transportation allowance of eight to ten percent of their basic salary.

Annual air tickets

Expats that move away from their home countries see this as one of their biggest advantages of them all. Companies in Saudi Arabia are entitled by the law to offer expat employees free tickets to their home country and back every year. This is one of the biggest reasons why people from different parts of the world move to Saudi Arabia for employment. The savings are not touched for this purpose.

While these are some of the vital reasons why expats start working in Saudi Arabia, there are many more benefits worth the move. They include overtime pay, stand-by pay, annual merit increases, the health benefits and paid vacations.

While the intent and motive are clear, it is also essential to understand and follow the regulations and the laws of the land to comply with.

Payroll requirements

People, process and technology are the three key elements in large payroll transformations. There are certain rules for payroll and taxation in the region that depend on the type of structure of the company. With regards to a foreign company setting roots there or deploying their resources to Saudi Arabia, the following elements need to be taken care of with precision

  • Income tax
  • Social security costs
  • Payroll tax
  • Sales tax
  • Business (Zakat) wealth tax
  • Permanent establishment concerns

There are three options

Local payroll
Companies outside of the country might prefer to outsource the payroll administration to a local agency as its payroll provider. They take care of the compliance with employment, immigration and tax and payroll regulations. This also includes the calculations of the payroll, the payments and filings.

Internal payroll
Some large companies prefer to have their in-house department to run their own payroll requirements for all their employees – local and across borders.

Fully outsourced payroll
Most companies rope in a global employment organisation such as Future Focus Infotech to handle their payroll administration in countries such as Saudi Arabia. It is vital to not only have the expertise in this area, but also experience across borders and updated knowledge on the laws of the land. This includes compliance, which is critical to the future of the company in the foreign land.

Organisations today are moving to unified payroll providers to bring in structured governance and achieve economies of scale. Bring in an expert to handle the legal work and concentrate on deploying your employees overseas in a smooth and error-less manner. Connect with us to find out more about how we can help you expand your horizons.

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