Looking to hire in Saudi Arabia

Employees in Saudi Arabia are entitled to paid annual leave that increases with seniority, as well as a separate sick leave entitlement. Leave generally accrues on an anniversary-year basis starting in January, and unused days are not carried over.

Annual paid time off accrues on an anniversary basis, with leave released pro rata over the year. Unused annual leave cannot be carried over to the next leave year.

Employees are entitled to 120 days of sick leave per anniversary year. A medical certificate is required after 1 day of sickness, and unused sick leave does not carry over to the next leave year.

In Saudi Arabia, business expenses are typically processed through payroll but do not create a payroll tax liability for employees, as there are no payroll taxes. Proper documentation, timely submission, and manager approval are essential for reimbursements to be processed.

All expenses must be reviewed and approved by the employee’s manager. Documentation requirements vary by expense type, and expenses submitted without the required supporting documents may be rejected.

Phone, internet, and coworking costs can be reimbursed on a non taxable basis when supported by appropriate proof of payment. For each of these, employees may submit a tax invoice, receipt, or bank statement and transaction details for amounts up to 1,000 SAR. The document must show the date, amount, currency, service provider or merchant name, a description of the purchase or service, and any VAT amount if incurred in Saudi Arabia.

Work equipment and supplies are generally reimbursed on a non taxable basis when supported by a tax invoice or receipt (or equivalent evidence of payment where specified). Documents must show the date, amount, currency, service provider or merchant name, a description of the purchase or service, and any VAT amount if incurred in Saudi Arabia. For laptops, the model number and brand must also be included. Postal charges require a postal invoice, receipt, or other evidence of payment and must also show the employee’s name. Software subscriptions up to 1,000 SAR may be supported by a tax invoice, receipt, or bank statement and transaction details, and should include the employee’s name or email.

Business travel costs are typically non taxable when properly documented. Most travel expenses can be supported by a tax invoice, receipt, or bank statement and transaction details for amounts up to 1,000 SAR, and must show the date, amount, currency, service provider or merchant name, and any VAT amount if incurred in Saudi Arabia. Some items also require the employee’s name or email and a description of the purchase or service. Flights may additionally be supported by a booking confirmation with all required details and evidence of payment; if a tax invoice is issued in a name other than the employee’s, an explanation must be provided in the description field. Mileage reimbursements are non taxable at a company-set rate and do not require supporting documents.

Meal and related costs can be reimbursed on a non taxable basis when supported by a tax invoice, receipt, or bank statement and transaction details for amounts up to 1,000 SAR. The document must show the date, amount, currency, service provider or merchant name, and any VAT amount if incurred in Saudi Arabia. Alcohol purchases are not permitted in Saudi Arabia. Alcohol expenses incurred outside Saudi Arabia may be reviewed on a case-by-case basis for certain meal-related expenses.

A range of other business-related costs can be reimbursed, generally on a non taxable basis, when supported by a tax invoice or receipt that shows the date, amount, currency, service provider or merchant name, a description of the purchase or service, and any VAT amount if incurred in Saudi Arabia. For training, courses, and books, mandatory courses, training, or certifications required as part of an employee’s job are non taxable, and documents should also show the employee’s name where training is involved. For gym membership, medical insurance, life insurance, wellness, and medical costs, the documentation must include the employee’s name, and for hospital-related medical costs the employee’s name must be shown as well.

Employers may offer a per diem of USD 100 per day to employees on business trips to cover incidental travel expenses. The specific per diem policy, including eligibility and conditions, is set out in the employment contract or company policy.

Bonuses in Saudi Arabia include contractual and discretionary payments in addition to salary, such as incentive payments and commissions. There is no income tax on employees in Saudi Arabia, so these bonus payments are not subject to personal income tax or payroll tax on wages.