SAUDI ARABIA – Saudi Companies with Five or Fewer Employees Are Exempt from Expanded Expat Fee - UPDATED
Effective 1 January 2018, as expected, the monthly levy on foreign national employees in companies where the number of foreign national employees exceeds the number of Saudi employees has doubled to SAR 400.
Furthermore, for the first time, a levy of SAR 300 per month applies to companies where the number of foreign national employees does not exceed the number of Saudi employees.
However, the Ministry of Labour and Social Development has announced that Saudi companies employing five people or fewer are exempt from the new monthly expat levy. Companies employing nine people or fewer must pay the levy for the number of employees exceeding five.
Since 1 July 2017, a monthly levy of SAR 100 (approximately USD 27) must be paid for each foreign national dependent resident in Saudi Arabia.
The Ministry has also confirmed that foreign nationals working in branch offices of general recruitment companies and recruitment companies for hiring domestic help are exempt from the levy. Additionally, the tax will not apply to spouses of Saudi citizens, citizens of GCC countries and non-Saudi children of Saudi women.
For work permits issued prior to 1 January 2018 and still valid during the year 2018, the Ministry of Labour will send the employer an invoice stating the outstanding amount of expatriate fee payable due to the increased fees for 2018. The outstanding amount must be paid within three months of 1 January 2018. Failure to pay on time may result in penalties on the employer and the employee, at the discretion of the authorities.
How is the levy paid?
The levies for the duration of the intended residence are to be paid to the Jawazat office (the Ministry of Interior office responsible for new and renewal visas/permits) for each foreign national employee or accompanying foreign national dependent at the time of the initial or renewal Muqeem (residence permit) application. The fee may be paid by the principal applicant or by the sponsoring Saudi entity.
The levy raised on foreign national employees and dependents will increase in 2019 and 2020:
Employee of company where the number of foreign national employees exceeds the number of Saudi employees:
Employee of company where the number of foreign national employees does not exceed the number of Saudi employees:
- Employers of foreign nationals living and working in Saudi Arabia should review their plans to take into account the new expat levy.