Saudi Arabia
Mandatory benefits in Saudi Arabia include accident, disability, death, and unemployment insurance as well as an end-of-service gratuity. Employers must provide private medical insurance to their employees. Other employer-sponsored benefits include death and disability and the private pension market is in the process of being developed.
Country Insight
Market and Benchmark Insight Report for Saudi Arabia – 2023-2024
Mandatory employee benefits in Saudi Arabia
Saudi Arabia has a large expatriate population, 30% of the total population. The Social Insurance Organization in Saudi Arabia (GOSI) provides the following benefits.
For Saudi nationals:
- Work-related accidents and indemnities and occupational hazards
- Temporary disability
- Death or permanent disability
- Unemployment insurance
For expatriates:
- Expatriates would benefit only from work-related accident indemnities and occupational hazard insurance.
Contributions are as follows:
- Saudi Nationals (private & public sector) – 22% of the maximum monthly applicable earnings (9% each for the employee and employer for an annuity (pension). In addition, the following contributions are payable only by employers: 1% each for unemployment contribution and 2% for occupational hazard.
- Expatriates – 2% for occupational hazard payable by employers only.
GOSI does not cover medical treatment (except for work-related accidents).
Pension
Typical pension schemes are offered at a 5.33% contribution payable by the employer.
Leaves
The labor law dictates the following leaves:
- Maternity leave – 70 days
- Paternity leave – 3 days during the first week after the birth of their child.
- Annual leave – 21 days of paid annual leave increased to 30 days after 5 consecutive years with one employer.
- Bereavement Leave – 5 days of paid leave following the death of their spouse, ascendants, or descendants.
- to between the employer and employee.
- Examination leave
- Hajj Leave – 10 to 15 days to perform Hajj, a pilgrimage to Mecca, including the Eid Al-Adha holiday.
- Marriage Leave – 5 working days’ paid leave for marriage.
End-of-Service Gratuity
All employees (including KSA nationals), regardless of their length of service, are entitled to an end-of-service gratuity of a half-month’s wage for each of the first five years and a one-month wage for each of the following years.
Supplementary employee benefits
Medical
Medical insurance is compulsory in Saudi Arabia, and private insurers provide it. Employers must give medical insurance to all employees (Saudi nationals and expatriates), their families, and dependents without any number limitation.
The Council of Health Insurance (CHI) regulates the compulsory medical insurance scheme. Failure by employers to provide medical insurance at all times to employees and their families will result in fines and penalties imposed on them. CHI also mandates the minimum benefits for compulsory health insurance and the applicable general conditions.
Death and Disability
Only 8% of employers provide death and disability benefits, but awareness about this kind of benefit is increasing year over year.
Pension
Private pension schemes are in their starting phases and are yet to be developed.
This information about employee benefits in Saudi Arabia is provided by Associated Insurance Consultants. If you need support with your benefits in the country, please contact Asinta, and we will put you in touch with the experts at Associated Insurance Consultants.