Saudi Arabia has emerged as one of the most strategic markets in the Middle East, offering unparalleled opportunities for companies in energy, construction, IT, finance, and healthcare. With Vision 2030 driving large-scale reforms and diversification, the Kingdom is attracting global businesses at an unprecedented rate. However, navigating Saudi labor laws, Saudization (Nitaqat program), payroll rules, and HR compliance can be challenging especially if you don’t have a registered entity.
This is where a Professional Employer Organization (PEO) or Employer of Record (EOR) becomes essential. By using a PEO in Saudi Arabia, you can hire employees quickly, manage payroll compliantly, and expand without the heavy burden of entity setup.
Table of Contents
- What Is a PEO in Saudi Arabia?
- PEO vs EOR in Saudi Arabia – What’s the Difference?
- Why Use a PEO in Saudi Arabia Instead of Setting Up an Entity?
- Key Employment Insights in Saudi Arabia
- No Entity? No Problem
- How a PEO Helps With Payroll, Tax & Benefits in Saudi Arabia
- Saudi Arabian Labor Laws Made Simple With a PEO
- When to Choose a PEO Over Other Hiring Models
- What to Look for in a Saudi PEO Partner
- Asanify’s Advantage as a PEO in Saudi Arabia
- What Does It Cost to Build a Team in Saudi Arabia?
- Why Choose a PEO in Saudi Arabia?
- Ready to Hire in Saudi Arabia? Here’s What to Do Next
- FAQs
What Is a PEO in Saudi Arabia?
A PEO in Saudi Arabia is a trusted partner that helps companies manage Human Resource Management functions locally while ensuring compliance. Acting as a co-employer, a Asanify PEO takes care of:
- Payroll processing & payroll managing
- Salary disbursement through WPS (Wage Protection System) compliance
- Statutory and optional benefits management (healthcare, housing, end-of-service)
- HR documentation and employment contracts in Arabic & English
- Filing with Saudi authorities (GOSI, MHRSD, ZATCA)
- Contractor management solutions for freelancers and consultants
This model is ideal for startups, SMEs, and scaling businesses that want to hire in Saudi Arabia without committing to a costly local entity.
With Asanify’s PEO services, you can employ professionals across Riyadh, Jeddah, Dammam, and beyond. We ensure employees are paid correctly, receive compliant benefits, and remain fully aligned with Saudi labor laws. You retain control of day-to-day work while we manage the compliance and administration.
PEO vs EOR in Saudi Arabia – What’s the Difference?
Understanding the distinction between a PEO and an Employer of Record (EOR) in Saudi Arabia is essential for selecting the right hiring approach. While both solutions allow you to hire in Saudi Arabia without building a full HR team, their structures operate differently.
| Feature | PEO in Saudi Arabia | EOR in Saudi Arabia |
| Legal Employer | Client (shared employer) | EOR provider (full legal employer) |
| Entity Requirement | Requires local entity | No entity required |
| Payroll & HR | Shared with client | Fully managed by EOR |
| Best For | Companies with entity | Startups testing market |
| Immigration & Visas | Handled by client | Managed by EOR |
| Contracts | Client owns contracts | EOR issues compliant contracts |
| Switching to Entity | Already in place | Easy migration supported |
Why Use a PEO in Saudi Arabia Instead of Setting Up an Entity?
Partnering with a PEO in Saudi Arabia gives growing companies a competitive advantage by removing legal hurdles, reducing costs, and enabling speed-to-market. Asanify PEO service provides a compliant, scalable way to hire, onboard, and manage employees without creating a local entity.
Hire Top Talent in Saudi Arabia
Saudi Arabia offers a highly skilled workforce in IT, oil & gas, finance, and engineering. With Asanify, you can hire employees quickly without entity registration.
- Access multilingual professionals across Riyadh, Jeddah, and Dhahran
- Avoid bureaucratic delays from government approvals
- Offer competitive, compliant compensation packages
Build Your Global Employer Brand
By aligning with Saudi labor standards, you enhance your credibility as an employer.
- Offer benefits mandated under Saudi labor law (healthcare, end-of-service gratuity)
- Stay compliant with Saudization quotas under Nitaqat
- Use our Salary Calculator to benchmark pay scales
Reduce HR and Legal Overhead
Without a PEO, you’d need lawyers, payroll teams, and PRO services. Asanify removes these burdens.
- Eliminate high entity setup expenses
- Prevent payroll mismanagement risks
- Save time on HR administration
Test & Expand Into New Markets
If you’re not ready for a permanent entity, a PEO lets you test Saudi Arabia with minimal investment.
- Hire 1–10 employees quickly
- Scale operations flexibly
- Transition to a local entity later with ease
Suggested Read: Labour Laws in Saudi Arabia (2025): A Complete Guide
Simplify Global Compliance
Saudi Arabia’s regulations are detailed and strictly enforced. With Asanify, you remain fully compliant.
- Stay aligned with working hour limits and WPS salary reporting
- Ensure compliance with sick leave, vacation, and termination rules
- Rely on local HR and legal experts for filings and audits
Key Employment Insights in Saudi Arabia
Payroll Processing & Contributions
- Payroll processed monthly via WPS
- Employer social security (GOSI): ~12% of salary
- Employee social security: ~10% of salary
Leave Policies
- ~10–12 public holidays (Eid, Hajj, National Day)
- Paid vacation: 21 days, increasing to 30 after 5 years
- Sick leave: 30 days full pay, 60 days partial pay
- Maternity leave: 10 weeks
- Paternity leave: 3 days
Bonuses & Benefits
- End-of-service gratuity mandatory (half month per year first 5 years, one month thereafter)
- Housing and transport allowances are common
- Health insurance required under CCHI regulations
Income Tax (2025)
- No personal income tax for employees
- Corporate tax: 20%
- Zakat: 2.5% for Saudi-owned entities
Cultural Alignment and Professional Etiquette
Success in Saudi Arabia requires cultural awareness and compliance:
- Hierarchical but relationship-driven business culture
- Arabic is official, English common in business
- Respect for religion and cultural norms
No Entity? No Problem
With Asanify as your PEO in Saudi Arabia, you don’t need to establish a local entity to start hiring. We act as your compliance partner so you can:
- Hire employees in days instead of months
- Eliminate misclassification risks for contractors
- Expand in Saudi Arabia at lower cost
How a PEO Helps With Payroll, Tax & Benefits in Saudi Arabia
Managing payroll in Saudi Arabia requires a strong understanding of local labor laws, social contributions, and employee entitlements. A PEO simplifies this process by handling monthly payroll processing, calculating gross-to-net salaries, filing tax and social security payments, managing allowances and bonuses, and administering benefits such as health insurance and end-of-service gratuity.
- Monthly payroll cycles
- Net salary calculation & disbursement
- GOSI contributions & WPS compliance
- Benefits administration (healthcare, housing, gratuity)
Saudi Labor Laws Made Simple With a PEO
Saudi labor laws are detailed and strictly enforced. A PEO ensures smooth compliance across:
- Working hours: 48 hours per week (36 in Ramadan)
- Probation periods: Up to 90 days, extendable once
- Paid leave: 21–30 days annually plus public holidays
- Termination rules: 30–60 day notice, mandatory gratuity
- Union interactions: Limited; labor relations managed by MHRSD
When to Choose a PEO Over Other Hiring Models
A PEO in Saudi Arabia is right for companies that:
- Want to test the market before entity setup
- Need to hire small teams quickly
- Are scaling with flexible HR support
- Want to cut costs while staying compliant
What to Look for in a Saudi PEO Partner
When choosing a PEO in Saudi Arabia, evaluate:
- Knowledge of Saudi labor law & Saudization compliance
- Visa & sponsorship expertise
- Transparent pricing models
- Risk and compliance management
- Digital HR and payroll automation
Asanify’s Advantage as a PEO in Saudi Arabia
Asanify combines technology with local expertise to deliver:
- Onboarding in 48 hours
- Payroll automation with salary calculator integration
- Real-time compliance updates (WPS, GOSI)
- Local HR, PRO, and immigration experts
- Transparent, scalable pricing
What Does It Cost to Build a Team in Saudi Arabia?
The cost depends on the hiring model:
Option 1: Setting Up a Local Entity in Saudi Arabia
Creating your own entity provides full control but requires heavy investment. The setup process includes:
- Registration with Ministry of Commerce
- SAGIA license application
- Opening a Saudi bank account
- Local sponsor and board appointments
- Registration with GOSI, ZATCA, and MHRSD
- Compliance with Nitaqat (Saudization) quotas
- Hiring lawyers and PRO services
Estimated Timeline: 8–12 weeks
Estimated Investment: $15,000–$50,000+ upfront legal, banking, and admin fees
This is best for large enterprises with long-term plans in Saudi Arabia.
Option 2: Hiring Through a PEO in Saudi Arabia
With Asanify as your PEO, you skip entity setup and hire within days. Services include:
- Compliant contracts & HR documentation
- Payroll & benefits administration
- WPS & GOSI compliance
- Visa and iqama sponsorship
- Ongoing compliance monitoring
Indicative Monthly Pricing (2025):
| Service Type | Starting From (Per Employee/Month) |
| PEO Solution | $49 USD |
| Employer of Record (EOR) | $199 USD |
Why Choose a PEO in Saudi Arabia?
- Hire in days instead of months
- Avoid high entity setup costs
- Ensure full compliance with Saudi labor law & Saudization
- Focus on growth while we handle HR, payroll & compliance
Suggested Read: Labour Laws in Saudi Arabia (2025): A Complete Guide
Ready to Hire in Saudi Arabia? Here’s What to Do Next
Hiring in Saudi Arabia doesn’t have to be overwhelming. By scheduling a free consultation with Asanify, you can discuss your expansion goals and gain clarity through our Saudi compliance checklist, ensuring you begin operations with confidence. With our platform, you can seamlessly onboard employees in under a week, access visa sponsorship and HR support, use our Salary Calculator to design competitive pay packages, and scale your operations quickly while staying fully compliant.
FAQs
A PEO in Saudi Arabia acts as a co-employer, managing payroll, compliance, HR, and employee benefits so you can focus on operations.
It helps you hire quickly without entity setup by handling payroll, Saudization compliance, contracts, and benefits.
A PEO requires a local entity and shares HR responsibilities, while an EOR is the legal employer—no entity needed.
Yes, a PEO manages payroll processing, salary disbursement, GOSI contributions, and WPS compliance.
No, employees in Saudi Arabia enjoy tax-free salaries, but employers must handle GOSI and other contributions.
Yes, PEOs like Asanify manage visa processing, iqama sponsorship, and ongoing immigration compliance.
Look for proven local expertise, transparent pricing, strong compliance support, and visa/work permit assistance.
Most PEOs, including Asanify, can onboard employees within a week, allowing immediate market entry.
Mandatory benefits include health insurance, end-of-service gratuity, and GOSI social security contributions.
Yes, a good PEO supports smooth transitions, helping you move from co-employment to your own entity setup.
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.
