Employer Of Record in Saudi Arabia
At the heart of the Middle East, Saudi Arabia is a country with a rich history and an important place on the international stage. With its oil reserves and its efforts to diversify its economy, the Saudi kingdom attracts many investors and offers numerous professional opportunities. However, finding the right talent can be a challenge for companies faced with specific regulations and administrative procedures. Against this backdrop, employer of record is becoming an attractive and practical option for meeting the needs of the Saudi Arabian labour market.
What is employer of record (EOR)?
Payroll services is based on a three-way partnership between the administration company, the client company and the candidate employee. In this scheme, Salveo acts as an intermediary, facilitating interactions between the employee and the employer, and taking care of various legal obligations such as immigration, employment and pay issues. It is important to note that this collaboration involves shared management, particularly as regards the administrative tasks associated with the employee’s position. However, the client company retains responsibility for the major decisions concerning the content of the position, its development and remuneration, which it then shares with the umbrella company.
The advantages of EOR in Saudi Arabia
Wage portage offers several advantages in Saudi Arabia:
- Access to the labour market: for foreign companies wishing to operate in Saudi Arabia, freelance administration facilitates access to the local labour market by providing a legal and administrative structure for hiring staff.
- Reduced administrative formalities: staffing companies take care of legal and administrative obligations, such as work visas, residence permits and salary payments, easing the burden for both companies and employees.
- Risk management: payroll services reduces the risks for companies by providing a clear legal and contractual structure. This ensures compliance with local regulations and reduces potential disputes.
- Local expertise: Portage companies offer valuable local expertise, which can be beneficial for foreign professionals looking to work in Saudi Arabia and for companies seeking to understand the local business landscape.
Why choose Salveo to support you?
As a member of the ADIT Group, Salveo is positioned as your trusted partner, with a team of local French-speaking specialists and more than 30 years of experience. We have already supported many companies in the management of their staff in this country.
Our range of PEO services includes:
- Drafting of contracts in accordance with local legislation,
- Assistance in obtaining work and residence permits, especially for foreign employees,
- Full payroll management, including the issuance of payslips,
- Regular monitoring of declarations and payments of social security contributions and income tax,
- Particular attention paid to paid leave,
- Efficient management of professional expenses,
- Support at all stages of the end of the contract,
- Expert support to answer all your questions about employment law and employee contracts.
In addition, we offer a range of optional services, such as recruiting new employees, hosting in our business centers and managing the international mobility of your employees, including finding accommodation, enrolling children in school, renting vehicles, and many more.
Essential information you need to know
Sectors offering the best assignment opportunities
- Energy and oil
- The construction and infrastructure sector
- Information and Communication Technology (ICT)
- Health and pharmaceuticals
- Tourism, hotels and leisure activities
Geographical areas with the highest recruitment
- Riyadh, the capital and largest city of Saudi Arabia
- Dammam, a region renowned for its oil and gas industry and its major port
- Jeddah, Saudi Arabia’s main port city, on the country’s west coast
- Dhahran, a key centre for the oil and gas industry
- Medina, Islam’s second holiest city, attracts large numbers of pilgrims and tourists
Employment contracts
It is not compulsory to draw up a contract, but it is strongly recommended, at least for the tasks and remuneration involved.
As a general rule, trial periods last 90 days and can be extended by the same number if both parties agree.
Working hours and overtime
Generally, the working week runs from Sunday to Thursday, with Friday and Saturday as weekly rest days. Working hours are mainly 8 hours a day, for 40 hours a week. It should be noted that during Ramadan, the working week for Muslim employees is reduced to 36 hours.
With regard to overtime, Saudi law sets a maximum limit of 9 hours per week, with an additional rate of pay of at least 50% of salary for hours worked during the week and 100% for hours worked on days off or public holidays.
Paid holidays
In Saudi Arabia, employees are generally entitled to 21 days or more of paid holiday per year. After more than five years in the same company, the amount of paid holiday is increased to 30 days.
Public holidays in 2024
There are four main public holidays:
- Al-Yawm Al-Taasis
- Al-Yawm Al-Watani
- Eid al-Fitr
- Eid al-Adha
While the bank holidays is celebrated on a fixed date each year according to the Gregorian solar calendar, the other two holidays change date each year because they are based on the Islamic lunar calendar, the Hijri, which is about 11 days behind the Gregorian calendar.
Minimum wage
In January 2021, the Saudi government set a national minimum wage of 4,000 Saudi riyals per month, or around €1,000, for Saudi citizens working in the private sector. However, it is important to note that these minimums may vary depending on the industry, collective agreements, etc.
Termination of employment contract
In Saudi Arabia, termination may be voluntary on expiry of the contract, by the employee, by mutual agreement or by the employer. This must be for one of the following reasons:
- Serious misconduct on the part of the employee (may include acts of theft, fraud, gross negligence, violence in the workplace)
- Occupational unfitness (inability to follow instructions or adapt to the demands of the job)
- Downsizing
- Force majeure (may include natural disasters, economic crises or emergencies)
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