The third and final year to exempt small firms from the monthly expat levy has begun in Saudi Arabia. The decision was approved to exempt small enterprises starting from the middle of Sha’ban 1441 (April 2020) and for three years until the decision ends in the middle of Sha’ban 1444 (March 2023).
The decision included exempting labour fees from work permits amounting to SR800 per month (SR9,600 annually) to be reduced to SR100 only, which is implemented electronically through the electronic portal of the Ministry of Human Resources and Social Development.
As per details of the decision, workers will be exempted from fees in small establishments with nine workers or less, with the employer working full-time while raising the number of exempted workers to 4 workers when hiring another Saudi.
The total number of establishments with a total number of employees of 9 or less is about 576,312 establishments.
The ministry had previously confirmed that the exemption aims to provide further flexibility in managing the contractual relationship between the establishment or the employer and the expatriate worker.
It aims to improve the management of financial flows with establishments in the private sector and allow scheduling of their financial payments.
Previously the Saudi Arabian (KSA) Ministry of Labour and Social Development (MOLSD) has confirmed that entities with five or fewer employees are exempt from paying the expat levy that is effective from 1 January 2018.
Entities operating in Saudi Arabia should account for the expat levies when planning their mobility needs.
In April 2020, the decision was taken to waive the monthly levy of 800 riyals for expatriate workers employed in small and medium enterprises for a period of three years. The levy will be waived by March next year, officials said.
According to the current law, migrant workers in small and medium enterprises are required to pay only 100 riyals per month in lieu of labour fees.
According to this, instead of the 9,600 riyals that the employer pays for a migrant worker for one year, it is adequate to pay only 1,200 riyals. But this exemption will be abolished by March next year and each expat will have to pay Rs 9,600.
The Human Resources Ministry aims to improve the management of financial flows with companies in the private sector and allow scheduling of their financial payments.
