Employee Cost Calculator — Saudi Arabia
Calculate the total cost of employing a worker in Saudi Arabia. Enter basic salary, allowances, and benefits — the calculator adds employer GOSI contributions and other statutory costs to show the true monthly and annual cost of each employee.
What Is Employee Cost?
Employee cost is the total amount an employer spends to employ a worker — not just salary, but also mandatory contributions, benefits, and (in Saudi Arabia) government levies. When budgeting for a hire, the true cost is often 10–20% higher than the salary you offer.
In Saudi Arabia, the main costs on top of salary are GOSI (General Organization for Social Insurance) contributions, the expatriate dependent levy, and any company-specific benefits (health insurance, housing, transport, end-of-service provisions). This calculator covers the statutory costs and salary — add your own benefits separately if needed.
Employee Cost Formula
Monthly cost:
Monthly Cost = Salary + GOSI Employer + Expat Levy + Benefits
GOSI employer contribution:
GOSI = Basic Salary × 11.75% (Saudi) or × 2% (Expatriate)
Expat dependent levy:
Levy = Number of Dependents × SAR 400 per month
GOSI rates: Saudi nationals — 11.75% employer contribution (covers pension + occupational hazard). Expatriates — 2% employer contribution (occupational hazard only). GOSI is calculated on basic salary only, not on allowances.
Worked Example
Expatriate with no dependents: Basic SAR 10,000 + housing SAR 3,000 + transport SAR 1,000
Monthly salary = 10,000 + 3,000 + 1,000 = SAR 14,000
Employer GOSI (2% of basic) = SAR 10,000 × 2% = SAR 200
Expat levy (0 dependents) = SAR 0
Total monthly cost = 14,000 + 200 = SAR 14,200
Annual cost = 14,200 × 12 = SAR 170,400
Saudi national with same salary:
Employer GOSI (11.75% of basic) = SAR 10,000 × 11.75% = SAR 1,175
Total monthly cost = 14,000 + 1,175 = SAR 15,175
Annual cost = 15,175 × 12 = SAR 182,100
Expat with 2 dependents:
Levy = 2 × SAR 400 = SAR 800/month = SAR 9,600/year
Total monthly cost = 14,000 + 200 + 800 = SAR 15,000
Costs Not Included in This Calculator
- Health insurance — mandatory for all employees in Saudi Arabia. Costs vary by coverage and age — typically SAR 1,500–6,000 per employee per year.
- End-of-service benefit provision — companies should budget 1/12 of salary per year for EOSB (roughly 8.33% of monthly salary reserved annually).
- Visa and iqama fees — for expat hires, around SAR 2,000–3,000 for the initial visa and SAR 650+ per year for iqama renewal.
- Recruitment costs — agency fees, advertising, interview expenses. Often 10–25% of first-year salary.
- Training and development — varies by role and company.
- Office space, equipment, software — per-employee overheads.
For full budgeting, add these on top of the figure this calculator produces. Health insurance is the most important to include for accurate planning.
Frequently Asked Questions
What is GOSI and who pays it?
GOSI (General Organization for Social Insurance) is Saudi Arabia's social insurance system. Both employer and employee contribute. For Saudi nationals: employer pays 11.75%, employee pays 9.75% of basic salary (total 21.5%). For expatriates: employer pays 2%, employee pays 2% (total 4%) — this covers occupational hazard insurance only. GOSI is calculated on basic salary, not on housing or other allowances.
What is the expat dependent levy?
The expat dependent levy (also called "maktab amal fee" or "iqama fee") is a monthly government charge of SAR 400 per dependent (spouse and children over 18) for expatriate workers. The fee is legally the employer's obligation, but many employers deduct it from the employee's salary or factor it into salary offers. Whether to include it in the employee cost depends on who actually bears it — check your contract.
Is health insurance mandatory in Saudi Arabia?
Yes. Under the Cooperative Health Insurance Law, all employers must provide health insurance for their employees and their dependents. The cost is typically SAR 1,500–6,000 per year per person, depending on coverage level and age. This is a significant cost (especially for expats with families) and should be included in total employee cost calculations. It is not included in this calculator automatically — add it manually.
Is EOSB included in monthly payroll?
No — EOSB is not paid monthly. It accrues over the employee's service and is paid as a lump sum when employment ends. From an accounting perspective, companies should reserve 1/12 of the EOSB accrual each month (approximately 8.33% of monthly salary) to ensure they can pay the benefit when it is due. For cash flow planning, the monthly cost of EOSB is roughly 8.33% of salary for the first 5 years and 8.33% of salary thereafter (approximately 1 month per year of service).
Do Saudi nationals cost more to hire than expatriates?
It depends on the salary level. Saudi nationals have higher GOSI (11.75% vs 2% of basic salary), which adds meaningful cost. But expatriates have additional costs: visa fees, iqama renewal, health insurance, expat dependent levy, and EOSB accrual. For a typical mid-level role, the total cost may be similar or even higher for expats once all costs are counted. The Saudi government also imposes "Nitaqat" quotas requiring a certain percentage of Saudi employees, which affects hiring strategy beyond pure cost.
How do I reduce employee cost in Saudi Arabia?
Several levers: hire Saudi nationals to avoid visa and iqama fees (though GOSI is higher), minimize dependents for expat hires (each dependent costs SAR 4,800/year in levy), negotiate group health insurance rates (larger groups get better prices), use part-time or contractor arrangements where possible (though this has compliance considerations), and manage EOSB accruals carefully. For most companies, the biggest lever is reducing turnover — each replacement hire costs 10–25% of first-year salary in recruitment, onboarding, and lost productivity.