Understanding the Financial Obligations of Employers

By Mohammed Ameen

Updated on:

Employer Financial Obligations in Saudi Arabia

Financial Responsibilities of Employers

Employers in Saudi Arabia have a number of financial obligations to their employees. In this blog post, we’ll take a closer look at the financial commitments that employers in Saudi Arabia have. We’ll cover everything from providing residence and work permits to paying for exit and re-entry visa fees. We’ll also discuss what happens in the unfortunate event of an employee’s death.

Recruitment Costs and Fees

First and foremost, all costs related to the recruitment of non-Saudi workers fall under the employer’s responsibility. This includes any fees related to sourcing, interviewing, and selecting the appropriate candidates for your business.

Residence and Work Permits

Another vital expense that employers must bear is the cost associated with issuing and renewing residence permits (known as Iqama) and work permits for their non-Saudi employees. Any delays in this process can result in fines, which are also the responsibility of the employer. This ensures that your employees have the legal right to live and work in the Kingdom.

Change of Profession, Visas, and Return Tickets

An employer also responsible for covering the fees associated with any changes to the employee’s profession. This includes any costs for processing exit and re-entry visas for your employees. In addition, at the end of the employment relationship, it is the employer’s responsibility to cover the cost of a return ticket to the employee’s home country. This ensures a smooth transition for both parties when the employment contract concludes.

Unfit for Work or Voluntary Departure

However, there is an exception to the rule about return tickets. If an employee is deemed unfit for work or decides to voluntarily return to their home country without a legitimate reason, the cost of their return will be borne by the worker themselves.

Service Transfer Costs

In instances where an employee wishes to transfer their service to another employer, it’s the responsibility of the new employer to bear the cost of this transfer. This includes any fees associated with the paperwork and processes needed to enable the service transfer.

In the unfortunate event of an employee’s death, the employer is responsible for the cost of preparing the deceased worker’s body and transporting it to the location where the contract was concluded, or where the worker was recruited. However, if the family of the worker approves burial in the Kingdom, the employer would not be required to bear these costs. Furthermore, if the General Organization for Social Insurance (GOSI) takes responsibility for these costs, the employer is relieved of this obligation.


In conclusion, employers bear various costs when it comes to hiring and managing non-Saudi workers. It is crucial to understand these obligations to ensure a smooth and compliant business operation in the Kingdom of Saudi Arabia.

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