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How to hire remote employees in
Laws about hiring are complicated, and the same is true in Saudi Arabia. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in Saudi Arabia, you have two real options when it comes to hiring. We’ll detail both below.
If you want to successfully hire in
Saudi Arabia
, you have two options:
Laws about hiring contractors are significantly more simple in
Saudi Arabia
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Saudi Arabia
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Saudi Arabia
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Saudi Arabia
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Saudi Arabia
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Saudi Arabia than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Saudi Arabia.
If an employee has completed 1 year of employment, they are entitled to 15 days of paid leave per year. After 10 years of employment, this entitlement is increased to 21 days per year.
The employee is also entitled to 10 days of unpaid leave per year, subject to employer approval.
In Saudi Arabia, (Article 109 of the Labour Law), the annual leave entitlement is dependent on the employee’s seniority.
Employees with more than five years of service are entitled to 30 days of annual leave.
Employees may carry over any untaken leave to the following vacation leave with the employer’s written consent.
There are 3 public holidays.
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
First 30 days: 100%
31 to 90 days: 75%
91 days to 120 days: unpaid
Employees are required to provide a medical certificate for all sick days.
Sick leave laws apply to employers with more than 20 employees.
Female employees are generally entitled to 10 weeks of paid maternity leave, up to four weeks may be taken before the birth and at least six of the weeks must be taken after.
The payment of maternity leave is dependent on the employee’s seniority; employers will compensate employees with service of at least one year at 50.00% of the employee’s pay rate. Employees with at least three years of service receive compensation at the rate of 100.00% of the employees’ regular pay.
An employee receiving full maternity leave entitlement may not also take the payment of annual leave in the same year. In contrast, an employee receiving 50.00% of their salary as a maternity benefit may also take an annual leave entitlement of 50.00% in the same year.
Fathers are eligible for three days of paid paternity leave after the child’s birth (Article 113 of the Labour Law).
There are no provisions in the law regarding paternity leave.
Hajj leave/Pilgrimage leave -According to the Labour law, an employee is entitled between 10 to 15 days (including the Eid Al-Adha holiday) to perform Hajj if the employee has completed at least 2 consecutive years of service with the employer.
In Saudi Arabia, an employee is entitled to 3 days of leave in the event of their wedding.
Employee is entitled to two days of bereavement leave in the event of he death of an immediate member.
Employees with unlimited contracts are entitled to receive 60 days’ notice.
Employees with other contracts are entitled to 30 days’ notice.
If proper notice is not given, the parties can agree to compensation instead.
During the notice period, employees may use 8 hours of work time per week to find alternate employment.
There is not notice period for definite contracts as it is rare to have a valid reason for ending a definite contract early.
When an employment contract ends, an employee is entitled to an “end-of-service award” equal to one-half of one month’s wages for each of the first 5 years of employment and a full month’s wages for each year of employment thereafter, pro- rated for any partial year’s service.
An employment contract may be terminated in the following situations:
The employer must give a valid reason for the dismissal of an employee; if an employer cannot provide lawful reasoning, compensation may be issued.
If an employee resigns, the employer must issue their final wages immediately.
The notice period in Saudi Arabia is:
For termination of an employee in Saudi Arabia, 60 days’ notice is required on open ended contracts (with an indefinite term and paid monthly).
For fixed term contracts, the notice period is 30 days.
When an employment contract ends, an employee is entitled to an “end-of-service award” equal to one-half of one month’s wages for each of the first 5 years of employment and a full month’s wages for each year of employment thereafter, pro-rated for any partial year’s service.
The end-of-service payment is calculated based on the last paid salary amount. Article 85 also stipulates that the employee is entitled to:
However, there are exceptions as to when severance is not mandatory:
An employee can be subject to a probationary period of no more than 90 calendar days and during this period the contract can be terminated without notice.
Subject to the employee's consent, this period can be extended up to 180 calendar days (i.e. six months in total).
The Saudi working week begins on Sunday and ends on Thursday.
Friday and Saturday are the official days of rest, but in certain cases Saturday might be considered as a working day.
Office hours vary, ranging from 7.30am -8am until noon, then from 3.30pm - 4pm until 7pm - 8pm.
The working day may decrease to 6 hours a day during the time of Ramadan. Typically, Fridays are a rest day.
All work exceeding the standard working hours a week is to be paid as overtime and is regulated by employment contract/collective agreements. Daily hours cannot exceed 11 hours.
An employee's total working hours, including overtime, should not exceed 10hours a day or 60 hours in a six-day week.
Here is also an annual overtime cap of 481 hours.
According to Saudi labor law article 107,overtime in Saudi Arabia is 150% of the hourly wage.
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