What it costs to hire in Saudi Arabia

• The cost of hiring an employee in Saudi Arabia is salary, plus employer social insurance, plus a set of permit fees that the Labour Law puts on the employer rather than the worker when the hire is not a Saudi national. As published in June 2026, employer social insurance runs at 11.75% or 12.75% of the contributory wage for a national and 2% for an expatriate. The work permit levy on expatriates runs SAR 700 to SAR 800 per person per month.

• Every figure below is dated. Rates change on published schedules, so verify against the ministry before a budget line is signed off.

Employer social insurance, by nationality and registration date

• Contributions split two ways: by nationality, and by when the employee first entered the system.

• The employer share for national employees under the newer arrangement is scheduled to rise again, to 13.25% from July 2027 and 13.75% from July 2028. Contributions stop at a contributory salary of SAR 45,000 a month. The 2% on non-Saudi employees covers occupational hazards only and carries no employee deduction.

• A national hired today therefore carries roughly six times the social insurance cost of an expatriate on the same wage, and the published schedule widens that gap each year.

What the Labour Law makes the employer pay

• Article 40 is unusually specific about who bears which fee. The employer pays recruitment fees for non-Saudi workers, the fees for issuing and renewing both the residence permit and the work permit, any fines resulting from delay in those renewals, the fees for changing a worker's profession, exit and re-entry visa fees, and the return ticket home when the relationship ends.

• Two cases run the other way. The worker bears the cost of returning home if he is unfit for work or wants to leave without legitimate reason. An employer taking on a worker who asks to transfer to him pays the transfer fees.

• The clause about fines deserves attention during budgeting. A late renewal is a charge the employer cannot pass down, so a missed date in an HR calendar converts directly into money.

The fees that recur every year

• Two amounts repeat annually for every expatriate on your payroll.

• The work permit levy is tiered by your own workforce mix. The schedule the labour ministry published in December 2017 reached its final step in January 2020: SAR 700 per worker per month where expatriates do not exceed nationals in the establishment, and SAR 800 where they do. Annualised, that is SAR 8,400 or SAR 9,600 per person, decided by a ratio you control. A further fee of SAR 100 a year covers issuing the permit itself.

• An HR guide updated in September 2026 puts the work visa fee at around SAR 2,000, residence permit issuance and renewal at around SAR 650 a year, and the pre-employment medical at around SAR 500.

• Hiring one more national does two things to the budget at once. It adds social insurance cost at the national rate, and if it tips your ratio, it moves every expatriate on the payroll from the higher levy tier to the lower one. Model those together. The compliance half of the same decision sits in our [guide to workforce quotas](/spaces/workforce-quotas-saudi-arabia-2026-guide).

End of service accrues from day one

• The end-of-service award is half a month's wage for each of the first five years of service and a full month's wage for each year after that, per a November 2025 summary of Saudi employment compliance obligations. It accrues every month the person is employed, so it belongs in the monthly cost of the hire.

Training is a statutory cost above 50 workers

• An employer with 50 or more workers has to train Saudi workers each year numbering at least 12% of total headcount, under Article 43. Saudi workers pursuing studies whose tuition the employer covers count toward that percentage. For a 200-person establishment that is 24 people a year, with a budget attached.

The half of the number you control

• The statutory items are fixed. What varies is how many candidates you process per hire, and how often you replace a hire that did not work out.

• CareerPlug analysed more than 10 million applications across over 60,000 small businesses in 2024 and found employers received an average of 180 applicants for every hire, with 3% of applicants reaching interview and 27% of interviewees hired. Each of those 180 costs advertising spend and recruiter time. A screening step that discards people who can do the job forces you to buy more applicants to find the same hire.

• In the Kingdom that has a second effect. A filter that throws away nationals because they wrote their CV in Arabic raises your recruiting cost and your quota risk in the same motion. We set out the mechanics in [keyword matching versus skills ranking](/spaces/keyword-matching-vs-skills-ranking).

Building the number for one hire

1. Annual salary, with the contribution calculation capped at SAR 45,000 a month.
2. Employer social insurance at the rate from the table above.
3. For an expatriate, add visa, residence permit, medical, and the levy at your current ratio tier.
4. Accrued end of service at half a month's wage per year for the first five years.
5. Recruiting cost, which is advertising plus recruiter time divided by hires, never by applications.
6. Renewal administration, because late renewal fines land on you.

• Run the same arithmetic for a candidate of a different nationality and the totals move further apart than most hiring managers expect. The calendar moves too, which we cover in [how long hiring takes in Saudi Arabia](/spaces/hiring-timeline-saudi-arabia) and [work permits and skill tiers](/spaces/work-permits-and-skill-tiers-ksa).