Key facts at a glance
Employer GOSI, Saudi national
11.75%
Of contributable wage, capped monthly
Employer GOSI, expatriate
2%
Occupational hazards only
Article 84 EOSB accrual
0.5mo → 1mo/yr
Half-month rate years 1-5, full month year 6+
Here's the direct answer: hiring in Saudi Arabia costs meaningfully more than the gross salary you offer, and the gap is bigger for Saudi nationals than for expatriates on paper. On a SAR 180,000 salary, three years into the role, a Saudi national costs an employer roughly SAR 208,650 a year once GOSI and EOSB accrual are added, an expatriate on the same salary costs roughly SAR 191,100. Neither of those gaps shows up on a job posting, both matter for real hiring budgets.
Two costs drive the difference: GOSI, Saudi's social insurance scheme, and the Article 84 end-of-service benefit, an uncapped lump-sum liability every departing employee is entitled to, national or expat. Add Nitaqat (Saudization quota) pressure on top for expat-heavy teams, and the true cost picture looks quite different from gross salary alone.
Run your own team's salaries through the employer cost calculator.
Open the calculatorThe two costs that sit on top of every Saudi salary
GOSI employer contribution. On the pre-3-July-2024 registration track, which still covers most current employees, employers pay 11.75% of contributable wage (basic salary plus housing allowance, capped at SAR 45,000/month) for a Saudi national, split across 9% annuities/pension, 2% occupational hazards, and 0.75% SANED unemployment insurance. For an expatriate, the employer pays just 2%, occupational hazards only, since expats sit outside GOSI's pension and unemployment branches entirely. Employees registered under the newer Social Insurance Law from July 2024 onward carry a higher, phased-in combined rate reaching 24% by mid-2028.
Article 84 end-of-service benefit accrual. Every departing employee, national or expat, is entitled to half a month's wage per year of service for the first 5 years, then a full month's wage per year after that, uncapped. It's not funded through GOSI or any external pot, it's a direct employer liability that sits on the books and grows every year an employee stays. Provisioning for it as an annual accrual (rather than discovering the full liability only when someone resigns) is the more defensible way to budget for it.
Worked examples at three salary levels
Figures calculated live from the same engine behind our Employer Cost of Hiring Calculator.
| Profile | GOSI + EOSB / yr | Total annual cost |
|---|---|---|
| Saudi national, SAR 180K, year 3 of tenure | SAR 28,650 | SAR 208,650 (1.16×) |
| Expatriate, SAR 180K, year 3 of tenure | SAR 11,100 | SAR 191,100 (1.06×) |
| Saudi national, SAR 360K, year 8 of tenure | SAR 72,300 | SAR 432,300 (1.20×) |
| Expatriate, SAR 360K, year 8 of tenure | SAR 37,200 | SAR 397,200 (1.10×) |
| Expatriate, SAR 600K, year 1 of tenure | SAR 35,800 | SAR 635,800 (1.06×) |
A senior expat hire at SAR 600,000 in year 1 costs roughly SAR 635,800 a year, a 1.06× multiplier on gross, almost entirely EOSB accrual since expat GOSI is capped at 2% on a wage well above the SAR 45,000/month ceiling.
The cost the calculator doesn't show: Nitaqat compliance risk
Nitaqat, HRSD's (Ministry of Human Resources and Social Development) Saudization quota system, bands every employer by what share of its workforce is Saudi national relative to sector-specific targets. It doesn't add a line item to any individual salary, but falling below your required band blocks new work visa processing and permit renewals for expatriate hires, which can freeze growth plans entirely regardless of how the direct GOSI math looks. The 2026 Nitaqat cycle raised sector quotas across healthcare, engineering, accounting, and several other fields, and removed the previously more forgiving middle Yellow tier, so employers that used to coast in a mid-band now sit on a stricter pass/fail line. If your workforce leans expat-heavy, budget Saudization compliance as a real, separate risk on top of the direct payroll figures here, not as an afterthought.
What isn't in these figures
The expat levy (which varies by company size and Saudization band), dependent health insurance, recruitment fees, and iqama/visa processing costs all sit on top of the GOSI-and-EOSB figures shown here. Treat this article and its calculator as the predictable baseline every hire carries, then layer your company-specific costs on top for a full budget.
Model your own team's numbers with the Employer Cost of Hiring Calculator or check individual end-of-service liabilities with the GOSI & End-of-Service Benefit Calculator.
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See the full annual cost, GOSI plus EOSB accrual, on top of any salary you're considering.
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Frequently asked questions
What does it really cost to hire someone in Saudi Arabia, beyond their salary?
Two ongoing components sit on top of gross salary: GOSI employer contribution (11.75% of contributable wage for a Saudi national, 2% for an expatriate, on the pre-3-July-2024 registration track) and the accruing Article 84 end-of-service benefit liability, which grows from half a month's wage per year in years 1-5 to a full month's wage per year from year 6 onward. Neither shows up on a payslip the way employee-side deductions do, both are real employer costs.
Why is hiring a Saudi national more expensive on paper than an expat?
Because the employer GOSI rate is 11.75% for a Saudi national (covering pension, occupational hazards, and SANED unemployment insurance) versus 2% for an expatriate (occupational hazards only, since expats aren't covered by GOSI's pension or unemployment branches). On identical gross salaries, that's a meaningfully larger direct payroll cost for the national hire. It's not the full picture though, Nitaqat quota pressure and the expat levy work the other way for expat-heavy workforces.
How does Nitaqat/Saudization change the real cost comparison?
Nitaqat is HRSD's (Ministry of Human Resources and Social Development) Saudization quota system, it bands employers by what share of their workforce is Saudi national relative to sector targets. Falling below your required band blocks new work visa issuance and permit renewals for expatriate staff, which is an indirect cost that can dwarf the direct GOSI saving from hiring expats. The 2026 Nitaqat cycle raised sector quotas and removed the middle Yellow tier, so companies that previously sat comfortably mid-band now face a stricter compliance line. This article and its paired calculator model direct payroll cost only, budget Saudization compliance risk separately if your workforce leans expat-heavy.
Why does the EOSB accrual go up after year 5?
Because Article 84 itself is structured that way: half a month's wage accrues per year for each of the first 5 years, then a full month's wage accrues per year after that, with no cap. A senior hire in year 8 of tenure is accruing EOSB liability at double the annual rate of someone in year 2, on identical salary, which is worth building into retention and long-term budgeting for senior roles specifically.
Does the employer GOSI rate change based on when an employee registered?
Yes. Employees registered before 3 July 2024 sit on the 11.75% employer rate (Saudi national) or 2% (expat) used in the worked examples here. Employees registered under the New Social Insurance Law from July 2024 onward follow a higher combined rate that's being phased in through 2028. If most of your recent hires fall on the newer track, treat the figures here as a floor, not the exact number, and confirm your current rate with GOSI.
What isn't included in these cost figures?
The expat levy (which varies by company size and Saudization band), dependent health insurance (which varies by insurer and family size), recruitment fees, visa and iqama processing costs, and any Saudization-related compliance risk. This article and its paired calculator focus on the two costs that apply predictably to every hire regardless of company specifics: GOSI employer contribution and EOSB accrual.
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