In short
An expat in Saudi Arabia pays no income tax and no GOSI; the employer must pay the SAR 650 Iqama fee, the SAR 800-a-month work-permit levy and insurance (about SAR 11,500 a year) and may not deduct them. The worker usually pays the SAR 400-a-month dependent levy per family member, SAR 4,800 a year each, in advance at renewal. End-of-service accrues at half a month's wage a year for five years, then a full month.
Salary in Saudi Arabia arrives without income tax, but an expatriate household still carries fixed government charges, some of which the law puts on the employer and some on the worker. This guide sets out the Iqama fee, the work-permit levy, the dependent levy and the Absher and insurance costs, explains which an employer may not deduct, shows what GOSI does and does not take from an expat, and treats end-of-service as deferred pay. It ends with a worked budget on a SAR 12,000 package.
Open the Iqama renewal cost calculator →
The charges that arrive at renewal
These charges come together at every renewal, for 3, 6, 9 or 12 months, each pro-rated to the period.
| Charge | Amount | Who pays by law |
|---|---|---|
| Iqama fee, standard worker | SAR 650 a year (SAR 600 domestic worker) | Employer (Art. 40) |
| Work-permit levy (Maktab Amal) | SAR 800 a month; SAR 700 where Saudis are at least half the workforce | Employer (Art. 40) |
| Dependent levy | SAR 400 a month per family member, any age | Worker, unless the contract says otherwise |
| Dependent Iqama fee | SAR 500 a year for dependents aged 18 and over; nil under 18 | Worker, unless the contract says otherwise |
| Absher processing | SAR 51.75 per Iqama | Follows the Iqama it belongs to |
| Health insurance (CCHI) | About SAR 500 to 2,000 a year per person | Employer for the worker; worker for dependents |
| Late renewal | SAR 500, then SAR 1,000, then SAR 1,000 plus possible deportation | Worker |
The work-permit levy is the large item. At SAR 800 a month it is SAR 9,600 a year per expatriate, or SAR 8,400 for an employer at 50% Saudisation. Industrial-licence companies had it cancelled permanently from December 2025, and establishments with nine or fewer staff can exempt two foreign workers, or four if a Saudi other than the owner is on GOSI. The Iqama levy calculator totals the renewal fee, worker levy and family levy for the year.
Who legally pays what
Article 40 of the Labor Law makes the employer responsible for the worker’s own recruitment, Iqama, work permit, levy, insurance and exit/re-entry costs, and forbids deducting them from salary. For a single worker renewing for twelve months that is SAR 650 + 9,600 + insurance + 51.75, about SAR 11,500, paid through Qiwa and Absher before the Iqama can be renewed. A deduction for any of these can be reported to the Ministry of Human Resources (MHRSD).
The dependent levy and dependents’ fees are different. They are charged to the sponsor, but in practice they are the worker’s cost unless the contract says the company covers family fees, which is common only in senior packages. The levy is not billed monthly: Absher takes the full amount for the renewal period in advance, so a family of three on a 12-month renewal pays SAR 14,400 in one go, and renewal is blocked until it is paid. Newly arrived dependents get a 90-day grace period, unused months are not refunded, and parents on a visit visa are not charged. The dependent fee calculator works out the lump sum for your family and renewal period.
GOSI for expatriates
For Saudi nationals GOSI takes 9% pension plus 0.75% SANED unemployment insurance from the employee (9.75%) on basic plus housing allowance, capped at SAR 45,000 a month, with the employer paying the same plus 2% occupational hazards. For a non-Saudi employee the employee contribution is nil; the employer pays only the 2% occupational-hazard contribution on basic plus housing. Nothing is deducted from an expatriate’s payslip for GOSI, and no pension accrues; end-of-service takes its place. The Saudi salary calculator shows take-home and cost to employer for both nationalities.
End-of-service is deferred pay
Because expats build no state pension, the end-of-service award under Articles 84 to 87 is their retirement provision. It accrues at half a month’s wage for each of the first five years and a full month’s wage for every year after that, on the last full wage including housing and transport allowances, pro-rated for part years. On resignation the worker receives nothing under two years, one third between two and five years, two thirds between five and ten, and the full amount after ten; termination by the employer pays in full. A SAR 12,000 package is therefore worth SAR 12,500 a month in the first five years and SAR 13,000 from year six, but only if you stay long enough or leave on the right terms. The detailed rules are in our guide to Saudi end-of-service and GOSI and the end-of-service calculator.
Worked example: a SAR 12,000 monthly package
Expat on SAR 8,000 basic + SAR 3,000 housing + SAR 1,000 transport = SAR 12,000, wife and one child under 18 on his Iqama, 12-month renewals, dependent insurance SAR 800 each.
Payslip. Income tax nil; GOSI nil. Take-home SAR 12,000. (A Saudi on the same split would pay 9.75% of SAR 11,000 = SAR 1,072.50 GOSI.)
Employer’s fixed costs, not deductible. Iqama SAR 650 + levy 800 × 12 = SAR 9,600 + insurance SAR 1,200 + Absher SAR 51.75 = SAR 11,501.75 a year, plus 2% hazards on SAR 11,000 = SAR 220 a month.
Family costs the worker pays. Levy 2 × 400 × 12 = SAR 9,600 + insurance 2 × 800 = SAR 1,600 + Absher 2 × 51.75 = SAR 103.50; no dependent Iqama fee because the child is under 18. Total SAR 11,303.50 a year, paid as a lump sum at renewal: SAR 942 a month, 7.8% of salary. When the child turns 18 the SAR 500 fee is added.
Monthly budget. SAR 12,000 less SAR 942 set aside for family fees leaves SAR 11,058 for rent, school fees, food, transport and remittances. A single exit/re-entry visa for a two-month family trip adds SAR 200 per person.
Deferred pay. End-of-service accrues at SAR 6,000 a year (half of SAR 12,000) in years one to five and SAR 12,000 a year after. After seven years that is 5 × 6,000 + 2 × 12,000 = SAR 54,000 on termination, or SAR 36,000 (two thirds) on resignation; resigning after three years pays one third of SAR 18,000 = SAR 6,000.
Planning the renewal
Renewal can be done up to 90 days before expiry through Absher or Muqeem, and the passport must be valid for at least the period requested. Exit/re-entry visas cannot run past the Iqama’s expiry: a single visa costs SAR 200 for two months plus SAR 100 per extra month, a multiple visa SAR 500 for three months plus SAR 200 per extra month. Transferring sponsorship costs the new employer SAR 2,000 the first time, SAR 4,000 the second and SAR 6,000 after that. The Iqama expiry calculator counts the days to renewal.
What people get wrong
- Accepting a salary deduction for the levy or Iqama. Article 40 prohibits it; the SAR 9,600 a year levy is an employer cost.
- Budgeting the dependent levy monthly. It is collected as one lump sum for the renewal period; save SAR 400 a month per dependent so the SAR 4,800 is there at renewal.
- Thinking children are exempt. The SAR 400 levy applies at any age; only the SAR 500 Iqama fee is waived under 18.
- Assuming GOSI builds you a pension. Expats contribute nothing and receive nothing from GOSI; end-of-service is the only accrual, and resigning before two years forfeits it.
- Choosing a 3-month renewal to save money. It reduces the lump sum, not the annual cost.
Frequently asked questions
Is there any income tax on salary in Saudi Arabia?
No. Neither Saudis nor expatriates pay personal income tax on employment income. The only payroll deduction is GOSI, and it applies to Saudi nationals only.
Can my employer make me pay the SAR 800 levy?
No. Article 40 of the Labor Law puts the work-permit levy, Iqama fee, insurance and exit/re-entry on the employer and forbids deducting them from salary.
Who pays the dependent fee?
By default the worker, through Absher, for the full renewal period in advance. Some senior contracts make the employer responsible, so check yours before accepting an offer.
What does an expired Iqama cost?
SAR 500 the first time, SAR 1,000 the second and SAR 1,000 plus possible deportation the third; meanwhile the worker cannot bank, travel or renew insurance.
Is housing allowance part of my end-of-service wage?
Yes. End-of-service uses the full last wage including housing, transport and other fixed allowances; GOSI uses only basic plus housing.
Sources
- Ministry of Interior Iqama fees and MHRSD expatriate levy, as summarised by KSA Expats (updated 9 June 2026) — re-checked 27 October 2026 against advisory summaries, not the primary Ministry notification; confirm on Absher, Muqeem or Qiwa before paying.
- GOSI — contribution rates for Saudi and non-Saudi employees (checked 28 September 2026).
- Saudi Labor Law, Royal Decree M/51, Articles 40 and 84–87 (end-of-service checked 28 September 2026).
- Absher — renewal window, late-renewal fines and exit/re-entry fees and Qiwa — sponsorship transfer fees; as commonly reported, marked unverified in our rules file.