Saudi Arabia to introduce monthly fee for expats, Here are the details

This post was originally published on 23 December 2016 and the content may be outdated.

In what would be a major setback to millions of expatriates in Saudi Arabia, the Kingdom has proposed to introduce a monthly fee for expatriates and their dependents.

According to local daily Arab News, the plan was confirmed during Thursday’s budget announcement, with charges of up to SR800 per worker to be phased in by 2020.

Fee on companies employing expatriates

Companies in Saudi Arabia currently pay a levy of SR200 per month per expat employee, but only for expat employees that exceed the number of Saudi employees. But that will be gradually increased from next year, the government’s “Fiscal Balance Program – Balanced Budget 2020” document shows.

  • From next year, the levy on expat workers will be gradually revised upwards, providing an additional impetus for employers to hire more Saudis.
  • For companies in which expats do not exceed the number of Saudi or GCC employees, the fee will no longer be waived but will be charged at a discounted rate.

Fee on dependents of expatriates

According to the daily, a fee on dependents of expatriate workers will also be levied. It will commence in July of 2017, in order to minimize impact on families with children enrolled in school.

“There are two kinds of fees, the first is according to the number of family members an expat has in return for utilities used… this minimal amount will increase gradually every year,” Saudi Finance Minister Mohammed Al-Jadaan reportedly told the media.

Here are the proposed policies to be introduced from next year:

In 2017

  • From July 2017, dependents of expats will each incur a monthly fee of SR100.

In 2018

  • From July 2018, dependents of expats will each incur a monthly fee of SR200.
  • In companies where the number of foreign employees is equal to or lower than the number of Saudis, a monthly fee of SR300 will apply from January onwards
  • In companies where the number of foreign employees exceeds the number of Saudis, a monthly fee of SR400 will apply from January onwards

In 2019

  • From July 2019, dependents of expats will each incur a monthly fee of SR300.
  • In companies where the number of foreign employees is equal to or lower than the number of Saudis, a monthly fee of SR500 will apply from January onwards
  • In companies where the number of foreign employees exceeds the number of Saudis, a monthly fee of SR600 will apply from January onwards

In 2020

  • From July 2020, dependents of expats will each incur a monthly fee of SR400.
  • In companies where the number of foreign employees is equal to or lower than the number of Saudis, a monthly fee of SR700 will apply from January onwards
  • In companies where the number of foreign employees exceeds the number of Saudis, a monthly fee of SR800 will apply from January onwards

No income tax

Currently, neither Saudi nationals nor foreign labourers pay income taxes, and this policy will remain in place, the government says.
According to Mohammed Al-Jadaan, the new rule will be applicable to foreign nationals working in the commercial sector until 2020. Those working as drivers and cleaning workers will be exempted.
“The second is already imposed on companies which employ expat workers; this will increase gradually as well until 2020.”
The finance minister ruled out income taxes on Saudi nationals, foreigners or company revenues.
If the new fee structure is implemented as proposed, it would be a major blow to the expatriate community in the Kingdom and a large number of mid-level expatriates would be forced to send their families back to home countries.

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