In 2025, employee benefits in Saudi Arabia remain central to workforce retention, compliance, and competitive hiring. Labour Law provisions, GOSI (General Organization for Social Insurance) regulations, and employer obligations under the Wage Protection System (WPS) shape Saudi Arabia’s labour market. For global employers, offering compliant benefits is not just an advantage it is a legal requirement.
Saudi labour laws set out minimum entitlements, while employers often go beyond to provide additional perks in order to attract and retain skilled talent, especially in industries like oil & gas, finance, and technology. However, compliance is complex for companies without a local entity. That’s where Employer of Record (EOR) services in Saudi Arabia simplify payroll processing, social security compliance, and benefits administration.
This guide explains everything global employers need to know about employee benefits in Saudi Arabia in 2025, including statutory entitlements, voluntary perks, compliance challenges, and how an EOR partner streamlines the process.
Table of Contents
- What Are Employee Benefits in Saudi Arabia?
- Types of Employee Benefits in Saudi Arabia
- Global Contractor Management and Benefits
- Emerging Benefit Trends for 2025
- Steps to Launch Employee Benefits in Saudi Arabia
- Estimated Timeline to Implement Benefits
- Legal Framework Governing Benefits in Saudi Arabia
- Key Compliance Challenges for Employers in Saudi Arabia
- How Asanify Supports Employers in Saudi Arabia
- FAQs on Employee Benefits in Saudi Arabia
What Are Employee Benefits in Saudi Arabia?
Employee benefits in Saudi Arabia refer to non-salary advantages provided to employees, covering both mandatory entitlements under labour law and employer-driven voluntary perks. Compliance with GOSI, medical insurance laws, and the Saudi labour framework directly ties to employee benefits.
For employers, benefits are a legal necessity under labour laws in Saudi Arabia and serve as a key part of employer branding. For employees, they ensure financial security, healthcare access, and work-life balance.
Payroll processing in Saudi Arabia plays a crucial role, as employers must calculate wages, manage GOSI contributions, and ensure WPS-compliant salary transfers.
Examples of employee benefits in Saudi Arabia include:
- Annual leave and public holidays
- Health insurance (mandatory)
- GOSI social insurance contributions
- End-of-service gratuity (statutory)
Types of Employee Benefits in Saudi Arabia
Saudi Arabia has a well-defined benefits system driven by statutory requirements, with employers often supplementing these with additional perks to remain competitive.
Statutory Entitlements
By law, Saudi employers must provide several benefits that secure employees’ income, health, and future. These include:
Paid Annual Leave and Public Holidays
Employees are entitled to a minimum of 21 days of annual leave, which increases to 30 days after five years of service. In addition, employees receive public holidays for Eid al-Fitr, Eid al-Adha, and Saudi National Day.
Sick Leave
Employees may take up to 90 days of sick leave per year:
- 30 days with full pay,
- 60 days with reduced or unpaid compensation, depending on policy and insurance coverage.
Maternity and Paternity Leave
Female employees receive 10 weeks of maternity leave, split between pre- and post-childbirth. Employers must pay 50–100% of salary during this period, depending on length of service. Male employees are entitled to 3 days of paid paternity leave.
Health Insurance
Employers must provide compulsory health insurance covering employees and their dependents, under the Council of Cooperative Health Insurance (CCHI).
End-of-Service Gratuity
Employees are entitled to an end-of-service gratuity (ESB) based on years of service. This severance is mandatory and calculated as:
- Half a month’s wage for the first five years of service,
- One full month’s wage for each subsequent year.
GOSI Social Security Contributions
Employers must contribute to Saudi Arabia’s social insurance scheme, covering pensions, occupational hazards, and unemployment insurance. Contributions are shared between employer and employee.
Compliance Reminder: Employers must process wages through the Wage Protection System (WPS) to avoid fines and penalties.
Common Voluntary Perks
To remain competitive, Saudi employers supplement statutory entitlements with additional perks. These are particularly popular among multinationals and large local firms.
Examples of voluntary benefits include:
- Housing and transport allowances – often bundled with base salary.
- Annual flight tickets for expatriate employees and their families.
- Performance bonuses and incentive schemes.
- Private pension plans to complement GOSI.
- Training and development programs in technical and leadership skills.
- Wellness initiatives such as gym memberships and counselling services.
- Flexible work arrangements, increasingly common in tech and services.
- Equity/stock option plans for senior executives in multinationals.
These perks strengthen employer branding and are essential in a market that competes globally for skilled talent.
Suggested Read: EOR Saudi Arabia: A Detailed Guide on Employer of Record 2025
Global Contractor Management and Benefits
Independent contractors in Saudi Arabia do not receive statutory benefits under labour law. They are responsible for their own taxes and social security contributions.
For global employers, this creates two challenges:
- Misclassification Risks – Treating contractors as employees can lead to penalties, backdated benefits, and compliance issues.
- Limited Access to Benefits – Contractors typically cannot access employer-provided health insurance, ESB, or leave entitlements.
Solution: Partnering with an Employer of Record (EOR) in Saudi Arabia enables businesses to reclassify contractors as employees where appropriate, ensuring compliance and access to full benefits.
Emerging Benefit Trends for 2025
The Saudi workforce is evolving rapidly, with a shift toward modern, flexible, and wellbeing-focused benefits. Key trends include:
- Wellness and mental health programs – Employers are introducing counselling, stress management, and wellbeing allowances.
- Remote work support – Hybrid models are emerging, with stipends for home office setup and internet costs.
- Upskilling and career development – Aligning with Vision 2030, companies are investing in continuous learning.
- Enhanced family benefits – More firms are offering childcare allowances and extended parental leave.
- Housing and mobility packages – Employers are moving toward cash-based mobility budgets instead of only car allowances.
- Digital HR platforms – AI-driven tools streamline benefits administration and personalised employee perks.
Steps to Launch Employee Benefits in Saudi Arabia
Rolling out employee benefits requires strategic planning, compliance alignment, and effective payroll processing.
Define Your Benefits Strategy
- Align packages with Saudi cultural expectations and Vision 2030 initiatives.
- Benchmark against competitors in the same sector.
- Balance statutory requirements with attractive voluntary perks.
Understand Compliance Rules
- Follow Labour Law and WPS regulations strictly.
- Ensure accurate GOSI registrations and filings.
- Administer health insurance per CCHI rules.
Partner with Local Experts
- Work with an EOR in Saudi Arabia for payroll and benefits management.
- Avoid misclassification risks with contractors.
- Ensure timely and compliant salary transfers.
Estimated Timeline to Implement Benefits
| Implementation Step | In-House (Local Entity) | With EOR in Saudi Arabia |
| Entity setup & registrations | 1–3 months | Not required |
| Payroll & GOSI setup | 4–6 weeks | Immediate |
| Health insurance enrollments | 3–5 weeks | 1–2 weeks |
| Full benefits rollout | 2–4 months | 2–3 weeks |
Partnering with an Employer of Record in Saudi Arabia reduces setup time significantly while ensuring compliance.
Legal Framework Governing Benefits in Saudi Arabia
Saudi Arabia’s employment framework is defined by a mix of laws, institutions, and mandatory systems.
Core Labour Framework and Institutions
- Saudi Labour Law – Defines contracts, leave entitlements, gratuity, and working conditions.
- GOSI Law – Governs social insurance contributions for pensions and unemployment.
- Wage Protection System (WPS) – Requires wages to be paid through bank transfers for transparency.
- Council of Cooperative Health Insurance (CCHI) – Mandates compulsory health coverage.
Sectoral Practices
While Saudi law applies nationally, industries such as oil & gas and finance often add enhanced allowances, bonuses, or housing packages. Expatriates also typically receive relocation benefits, making compliance and benchmarking essential.
Key Compliance Challenges for Employers in Saudi Arabia
Administering benefits in Saudi Arabia comes with unique challenges:
- Contractor misclassification – Can result in heavy penalties.
- End-of-service gratuity miscalculations – Errors in ESB can trigger disputes.
- Late WPS transfers – Non-compliance can lead to fines and blocked services.
- Incorrect GOSI filings – Missing or underreported contributions attract penalties.
- Taxation of allowances – Certain housing/transport perks need accurate payroll integration.
- Maternity/paternity entitlements – Employers must ensure compliance with gender equity laws.
Partnering with an EOR in Saudi Arabia mitigates these risks by handling payroll processing, benefits administration, and compliance.
Suggested Read: Labour Laws in Saudi Arabia (2025): A Complete Guide
How Asanify Supports Employers in Saudi Arabia
Managing employee benefits in Saudi Arabia can be complex but Asanify makes it seamless. Through Employer of Record (EOR) services, Asanify enables global companies to expand quickly while ensuring compliance with Saudi labour laws and social security obligations.
With Asanify, employers can:
- Ensure compliant GOSI registration and contributions.
- Administer statutory benefits like annual leave, ESB, and health insurance.
- Provide voluntary perks such as allowances, bonuses, and training programs.
- Guarantee WPS-compliant salary processing.
- Offer bilingual payslips (Arabic and English).
- Manage contractors compliantly by converting them to employees if needed.
By working with Asanify, employers reduce compliance risks, accelerate hiring, and deliver a world-class benefits experience in Saudi Arabia.
FAQs
Mandatory benefits include annual leave, public holidays, health insurance (CCHI coverage), GOSI social insurance contributions, sick leave, maternity/paternity leave, and end-of-service gratuity (ESB). Employers must also comply with the Wage Protection System (WPS).
Employees are entitled to 21 days of paid annual leave per year, increasing to 30 days after five years of service. Public holidays such as Eid al-Fitr, Eid al-Adha, and Saudi National Day are granted separately.
Yes. Employers must provide compulsory health insurance covering both employees and their dependents under the Council of Cooperative Health Insurance (CCHI) regulations.
Employees receive a severance payout based on their tenure. ESB is calculated as half a month’s wage for each of the first five years of service, and one full month’s wage for each subsequent year.
Employees can take up to 90 days of sick leave per year. The first 30 days are with full pay, followed by 60 days at partial pay or unpaid, depending on the employer’s policy and insurance coverage.
Female employees are entitled to 10 weeks of maternity leave, with pay depending on length of service (50–100% of salary). Male employees are entitled to 3 days of paid paternity leave.
Employers must contribute around 12% of Saudi employees’ salaries to GOSI (covering pensions, unemployment, and occupational hazards). Expatriates are covered only for occupational hazard insurance at 2%. These contributions significantly impact total employment costs.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
