Question 1

What GOSI contributions appear on a Saudi payslip?

Accepted Answer

For Saudi nationals, GOSI contributions include the Annuities Branch (9.75% employee, 9.75% employer of covered salary) and SANED unemployment insurance (0.75% each). For expatriates, only the Occupational Hazards branch applies (2% employer-paid). The contribution base is the basic salary plus housing allowance (capped at SAR 45,000/month). GOSI deductions for Saudi employees appear on the payslip as salary deductions.

Question 2

Is there income tax in Saudi Arabia?

Accepted Answer

No, Saudi Arabia does not levy personal income tax on employment income for either Saudi nationals or expatriates. Salaries are received free of income tax. However, the government introduced a 15% VAT on goods and services (increased from 5% in 2020), and businesses may be subject to zakat (2.5% on Saudi-owned entities) or corporate income tax (20% on foreign-owned entities), though these do not affect individual payslips.

Question 3

What is the standard salary structure in Saudi Arabia?

Accepted Answer

Saudi employment contracts typically break total compensation into basic salary (usually 50%-60% of total), housing allowance (typically 25% of basic), and transport allowance (typically 10% of basic). This structure matters because end-of-service benefits and GOSI contributions are calculated on basic salary plus housing allowance only. Many employers also provide annual air tickets, medical insurance, and an iqama (residency permit) renewal fee.

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