Many people are very curious about what expats are earning in Saudi Arabia. They think we must all be millionaires.
The truth is that salaries for most expats are very low. It really does depend on who you are and what you do.
So, how exactly are expat pay scales decided in Saudi Arabia? There are a number of determining factors that decide an expat salary in Saudi Arabia. They are as follows:
- The Industry & Job Title
- Years of Work Experience
- The Market
By far the highest determining factor for any job irrespective of the industry is nationality. In general, Asians have the lowest salaries. Arab nationals have medium salaries and Europeans & Americans have the highest.
It is hard to give exact figures here and also it will depend from one employer to the next. However, ballpark figures are listed below in Saudi Riyals.
What Are The Actual Salary Pay Scales For Foreigners?
Monthly Expat Salaries
|Asians||850 SR – 4,000 SR|
|Arab & Saudi Nationals||4,000 SR -12,000 SR|
|Europeans & American||14,000 SR +|
To best understand the expat pay scales consider that:
- 1000 SR = $266
- 4000 SR = $1,066
- 12,000 SR = $3,200
For more specific data about salaries in Saudi Arabia (Riyadh) check out the following link where you type in the job title and it returns lowest/average/highest pay scales for the industry you are interested in.
However, understand that nationality, qualification and years of service, will determine which end of the scale you are likely to get paid.
Highest Salaries-The Best Industries
The highest paid industries and annual salaries for expats in Saudi Arabia are listed below:
|Engineering||250, 600 SR||$67,000|
|IT||167, 837 SR||$44,744|
|Health Care||155, 400 SR||$41,428|
|Construction||117, 645 SR||$31,360|
|Hospitals (MFS)||103, 750 SR||$27,658|
The above pay scales are average and not typical. Some jobs in those industries may be a lot less and others a lot higher.
Much depends on your nationality and other factors required to do the job. Remember too that salaries are tax-free.
Expat Saudi Salary – The Benefits
Most jobs come with added benefits and they can include:
- Car or Travel Allowance
- Daily Meals
- Medical Insurance
- Education for Children
- Annual/Bi-annual Air Fare tickets
However, not all of the benefits are available to everyone. Whilst all expats get housing, a travel allowance, medical insurance and airfares NOT all jobs require a vehicle and education allowance for children.
The benefits you get will be determined by your job title/industry and your visa status.
Most foreign workers are employed on a ‘single’ status visa which means they will not receive benefits reserved for those employed on ‘family ‘ status’ visas. These include more premium housing and education allowances.
Who Are The Foreign Nationals Living in Saudi Arabia?
Currently, the total population of Saudi Arabia is 34 million. Out of this 10,736,293 million are foreign residents accounting for 33% of the Saudi population.
This is more than twice the amount in the US which is only 15%. Most expats are between the ages of 25 and 45. Ethnically, there is 90% Arab and 10% Afro-Asian.
Saudi authorities deliberately do not release accurate statistics. The most reliable guesstimate figures are as follows:
|Indians||2.3 to 3.2 million||14%|
|Pakistanis||1.3 to 2.7 million||10%|
|Bangladeshis||1.2 to 2.1 million||8%|
|Egyptians||.8 to 2.9 million||8%-10%|
|Syrians||.8 to 2.4 million||8%-23%|
|Yemeni||.7 tor less||7%|
|Indonesians||.5 to 1.5 million||4%-8%|
|Sudanese||.44 to .47 million||4%-8%|
|Jordanian/Palestinian||.22 to .4 million||1%-2%|
|Ethiopian||.15 or less||.1%|
|Lebanon||.14 to .21 million||.1%|
Only 15 per cent of foreign workers are skilled. The remaining 85% are largely working in agriculture, cleaning and domestic service (.5 million).
By law, the minimum wage is 3,000 SR for Saudis only. There is no minimum salary for foreign nationals. (MFS) The minimum salary for Saudi workers increased to 4,000 SR in 2020.
There are also around 5,000,000 illegal residents. They are mainly immigrants who have overstayed their visit, employment or Hajj/Umrah visa and those too who simply sneak across the border.
To combat this Saudi Arabia has capped the residency of foreigners for 6 years and imprisons and deports overstayers.
Each month thousands of violators are captured, imprisoned and returned to their home countries.
From time to time, Saudi grants amnesty for violators without being subject to fines or being blocked from reentering Saudi Arabia legally.
The last was in 2017.
General Working Conditions
Terms and working conditions in the Kingdom are governed by the Saudi Labour Law. Expat workers usually sign a contract with employers as direct hires or as subcontractors with foreign or local recruitment agencies.
As a direct hire, both salary and benefits are paid. Subcontracted workers, however, are simply paid a salary and expected to meet all their expenses with it.
The working week is Sunday to Thursday. However, Friday and Saturday are regarded as the weekend. Work hours in most cases are 40-48 hours per week.
However, many restaurant workers and laborers work 10 hours a day with no day off.
In Ramadhan, working hours are reduced to 6 hours per day for fasting Muslims.
The 5 daily prayers are observed during which all shops, offices and public buildings close.
Holidays are 21 days a year rising to 30 after 5 years of service. Sick Leave is 120 days a year -full pay for 30 days, 75% for 60 days, and zero payments for 30 days. Maternity leave is 10 weeks paid and 1 month unpaid.
Also, plans were announced to implement a two day weekend for the private sector thus limiting the working week to 40 hours.
There are no pension schemes rather at the end of a contract ‘indemnity’ or ‘End of Service Benefit‘ is awarded.
Indemnity is calculated as 15 or 20 days of basic pay for each year for the first three years. Thereafter, the entitlement is 1 month per year of employment. (MFS)
‘Kafala‘ system and Residency Permits ‘Iqama‘
All expat workers come to work in Saudi Arabia through a sponsor who arranges employment and deals with contracts and salaries. This is termed the ‘kafala‘ or sponsorship system.
Previously expats needed the sponsor’s permission to leave a job, to travel for holidays outside the kingdom, and could be grounded while involved in court disputes.
The labor reforms of 2021 mean that today expat workers can change jobs WITHOUT the permission of their sponsors (Kafeels). They are also free to arrange their exit/re-entry visas (with conditions) and to take Final Exit after their work contracts end.
The reforms are intended to free up expat working conditions and attract more foreign talent.
Today though, the program of Saudization is beginning to limit the power of ‘kafeel‘ over the expat worker. Foreign workers today can change sponsors and professions without a sponsor’s approval under certain conditions.
Worker and family passports used to be withheld. Today, however, sponsors can be punished for doing so.
Since no foreigner can take nationality, everyone is issued a Residency Permit ‘Iqama‘ which is renewable each year or two and is used as an important form of identity.
The ‘Íqama‘ is your personal identification document used in all situations where you need to identify yourself. You must show it to the police when requested.
You need to also it in banks, to get a telephone line, obtaining a driving license, insurance, and most public and government services.
The Residency Permit or ‘Iqama‘ is issued within one to two weeks of starting employment. It requires that you provide a fee, an electronic photograph, fingerprints, and a certificate of health from a local medical center.
After the issue, your photo, name, ID number, location, DOB, job title, nationality, religion, and sponsor’s name and location can be seen on the card.
Differences Between Conditions of Employment and Asians and Westerners.
Most westerners and skilled Arabs have highly paid jobs with great benefits and live in plumb housing compounds in luxury apartments or villas with a swimming pool and great facilities.
This is not true however for the majority of Asians or unskilled workers.
For these people, salaries and benefits are at best modest, but more often than not very low. Housing too is provided but it is old, substandard, crowded and located in poorer more run-down areas of the cities and towns.
Whilst most people have good sponsors and experience few problems under the system of ‘Kafala’ many issues of the abuse and exploitation of expat workers have been widely documented.
These are mainly low paid workers from Asia and Africa. They range from broken contracts, unpaid salaries, long working hours, labor disputes, domestic sexual abuse and rape.
Does Saudi Arabia Offer a Green Card System Like The USA?
In April 2016, in line with provisions of Vision 2030, the Saudi Kingdom announced the launch of a ‘Green Card‘ system. It is to be modeled on the US Green Card system and is due to be implemented in 2021.
The goal is to raise $10 billion in reduced remittances and from other sources.
Eligible Foreigners Need:
- A Valid passport
- To Be 21 years of age or more
- Have a valid Saudi Iqama (Residency Permit)
- Have A Proven Clean Criminal Record
- Be Free of Contagious Diseases (Medical Report)
- Have Sufficient (ample) Finances
- Pay Annual Fees- SP2 only
There Are Two Types:
- Permanent Residence called Premium Residency (SP1) costs (800,000 SR/ $213,000) and is a one off payment.
- Temporary Residence called the Premium Residency (SP2) costs (100,000 SR/$26,000) per year and is a yearly payment.
The Benefits Are:
- Self Sponsorship (No ‘Kafeel‘)
- Permanent Residency
- Have Permission to do Business
- Free Medical Treatment
- Access to Bank Loans
- Buy property
- Pay ‘Zakat’ & taxes
Also in 2011, a ‘Scientist and Expert‘ visa was announced and implemented in 2018 as a way to attract highly skilled immigrants as health specialists.
For more details about the Saudi Premium Residency Program and to learn much more, read the insidesaudi.com article entitled, What is The Saudi Green Card?
Nitaqaat and Saudization Program
The fact that millions of foreign workers can migrate and live in the kingdom and enjoy its benefits is due in great part to decades of opposition from the business community to employing Saudi nationals.
The traditional reasons were/are as follows:
They took the view that for employment, Saudis are:
- too costly
- hard to lay off
- uninterested in low skilled jobs
- lacking in skills
- lacking in training
- lacking in labor productivity
In 2011 and in answer to protests arising from the ‘Arab Spring‘ King Abdullah gave $130 billion for new housing programs, increasing public salaries (only Saudis) and creating more jobs in government.
Also, under the new ‘Hafiz‘ program 2,000 SR per month was given to young Saudi job seekers in benefits.
At the same time in 2011, Saudiization or the new ‘Nitaqat‘ program was launched under the new Ministry of Labour and Social Development (MSLD).
It consisted of a series of incentives to hire Saudi nationals and sanctions for non-compliance. Depending on nationalization targets that are reached, private companies are classified into six bands.
- Green (High, Medium and Low)
- Yellow (Cancelled 2019)
Quotas under ‘Nitaqaat‘ depended upon the industry and size. Currently, they are 6 and 5 categories respectively. Credits are given for recruiting a greater percentage of Saudi to expats numbers, salaries and retention rates.
Additional credits include employing priority women, students and the disabled.
Companies in the higher categories enjoy a number of benefits and expenditure cuts.
Those however in the lower categories, are penalized with restricted benefits and financial penalties for redundant expats of 2,400 SR or $640.
Government targets are continuously being revised.
Also from 2017, expat children of Saudi mothers and non-Saudi fathers together with non-Saudi mothers and Saudi fathers are allowed to work in jobs limited previously to only Saudis.
Read about Saudization and Nitaqat at the insidesaudi.com article Guide to Saudization and the Nitiqat Program.
The Impact of Saudization Or The ‘Nitaqat‘ On Expat workers.
Saudization under ‘Nitaqat‘ has meant the slow phasing out of expat workers in ever-increasing employment numbers. Firstly, since Oct 2018, 13 areas of retail have been reserved for Saudis only and many expat contracts ended.
Also, all expat contracts in government are to be terminated in 2021. Private companies visas too for expats are reduced from two years to one.
Secondly, in 2017 and as a means to increase employment costs of companies with expat workers, the Saudi government started imposing expat business levies.
Additional fees are also charged on companies where expats outnumber Saudis. For more detail check out this useful link. Fees are set to increase annually.
Thirdly in 2017, personal expat dependents fees were levied at expat workers themselves.
More punitive measures are set to hit expats and their employers including obligatory recruitment online, high visa fees, and restrictive job descriptions by the MLSD.
See this useful link for more detail about the real cost of expat levies in Saudi Arabia.
Fourthly in addition to phasing out of mass numbers of expatriate workers to be replaced by Saudi nationals, state policies now require that the private sector is an ‘attractive and rewarding’ prospect for young nationals.
‘Vision 2030‘ or the reform master plan launched in 2016 aims to achieve a ‘thriving economy‘ through diversification (non-oil industries) and the creation of knowledge-based industries in the kingdom.
This is to be achieved in the following way.
- Investment in Education
- Fostering high valued, service orientated industries
- Developing Hi-Tech Industries
- Targeting IT and Telecommunications as privileged labor centers
Fifth, many low income and middle-income workers have been badly hit by the levies and cannot afford to pay.
Thousands have sent their families back home and continued working in the kingdom on a bachelor status. The most affected nationals are Asians from India, Pakistan, Sri Lanka, Philippines, Bangladesh and Nepal.
In 2019 more than 800,000 foreign workers per year are returning to their home countries. Ironically, employment figures for Saudis have actually risen by 13%.
Sixth, the Jeddah Chamber of Commerce (JCCI) predicts that between 25% to 30% of all private businesses may shut down due to the loss of skilled expat labor.
Currently, 15.6% of business establishments in Jeddah are on the verge of collapse and 11% are facing financial hardships. (MFS)
The departure of foreign workers and their families seems to have negatively impacted the economy. Businesses too are under strain.
Also, rents in most Saudi towns and cities have plummeted and the streets are full of advertising signs for rent of vacant apartments and shops.
Seven, private business have been forced to close due to higher costs and lower sales.
For example, many rent a car company cannot pay the high salaries demanded by Saudis and nor meet the operational costs of running vehicles and so have closed down.
Finally, it is estimated that about 30% of private schools have been affected and that some are set to close down.
Students numbers have fallen since foreign expats have sent their children to resume studies in their home countries. Fewer students mean fewer fees and in turn caused severe budget restraints.
Is Saudi Arabia still a land of opportunity for expats? The punitive expense of hiring, a slow economy, VAT (5%), expat levies and the massive exodus combined with government restrictions all mean Saudi Arabia is no longer an attractive option for employers nor is it a favorable destination for foreign workers as it once was. (MFS)
Has ‘Nitiqaat‘ achieved its goals? Recent social reforms mean that Saudi women can drive and are now being employed in many sectors.
Yet, in spite of such a massive population exodus, unemployment for Saudi nationals has not decreased reaching 12.9% in 2018. (30.9% for women and 7.6% for males).
Commentators explain that apart from the vast scale of ‘fake‘ Saudization’, the market still needs to:
‘ Shift the Saudi labor force to take on higher paying white collar professional service roles and create a working class of Saudis willing to do service sector, retail, and construction jobs‘Saudi Gazette Opinion 2018
Will there be opportunities in the future for expat worker in Saudi Arabia? Future opportunities for expats will depend on the recovery of oil prices, the effectiveness of the Vision 2030 program and how current employment reforms and hits on foreign workers result in reshaping the Saudi labor market. Additionally, the nationality and skills profile of future migrants will also change in line with Vision 2030’s goal of ‘attracting the talents’ and ‘simplifying residency and visa systems.’