Saudi Arabia Tax Calculator 2025: Complete Guide to Saudi Income Tax & Zakat

Saudi Arabia offers one of the most attractive tax environments globally, with no personal income tax for most residents. This comprehensive guide covers the unique tax system, Zakat obligations, social insurance, and tax planning strategies for both Saudi nationals and expatriates.

Saudi Arabia Tax System Overview

Key Features

No Personal Income Tax: Saudi Arabia does not impose personal income tax on individuals
Corporate Tax: 20% on business profits (15% for qualifying companies)
Zakat: Religious obligation for Muslims (2.5% of wealth)
Social Insurance (GOSI): Mandatory for Saudi nationals and some expats
VAT: 15% on most goods and services

Who is Tax Resident?

Saudi Nationals: Always tax resident
Expatriates: Resident if physically present for 183+ days in a year
GCC Nationals: Special rules apply under GCC agreements

Personal Income Tax

Saudi Nationals

No personal income tax on employment income
No capital gains tax on personal investments
No inheritance tax
No wealth tax

Expatriates

No personal income tax on employment income
No capital gains tax on personal investments
May be subject to tax in home country (depends on tax treaties)

Self-Employed Individuals

Business income: Subject to corporate tax rates
Professional services: May be subject to different tax treatment
Freelancers: Generally no personal tax, but business registration required

Zakat (Religious Tax)

What is Zakat?

Zakat is a religious obligation for Muslims, requiring payment of 2.5% of wealth above the Nisab threshold.

Zakat Calculation

Nisab (Minimum threshold): Equivalent to 85 grams of gold or 595 grams of silver

Rate: 2.5% of qualifying wealth

Due: Annually during Ramadan

Who Must Pay Zakat?

Muslims only
Wealth above Nisab threshold
Wealth held for one lunar year
Saudi nationals and Muslim expats

Zakat on Different Assets

Cash and bank deposits: 2.5%

Gold and silver: 2.5%

Business inventory: 2.5%

Investment properties: 2.5%

Stocks and bonds: 2.5%

Zakat Exemptions

Primary residence: Usually exempt
Personal belongings: Exempt
Business equipment: Exempt
Debts owed to you: Can be deducted

Example Zakat Calculation

Total wealth: SAR 100,000

Nisab threshold: SAR 20,000

Zakatable wealth: SAR 80,000

Zakat due: SAR 80,000 × 2.5% = SAR 2,000

Social Insurance (GOSI)

General Organization for Social Insurance

GOSI provides social security benefits for Saudi nationals and qualifying expatriates.

Saudi Nationals

Mandatory participation:

Employee contribution: 9% of salary
Employer contribution: 11.75% of salary
Total: 20.75% of salary

Coverage includes:

Retirement pension
Disability benefits
Survivor benefits
Unemployment benefits

Expatriates

Limited participation:

Some expats: May be required to contribute
Voluntary participation: Available for some
Employer contributions: Usually required

GOSI Contribution Caps

Maximum salary for contributions: SAR 45,000 per month

Minimum salary: SAR 3,000 per month

Example GOSI Calculation

Monthly salary: SAR 25,000

Employee contribution: SAR 25,000 × 9% = SAR 2,250

Employer contribution: SAR 25,000 × 11.75% = SAR 2,938

Total monthly GOSI: SAR 5,188

Value Added Tax (VAT)

VAT Rate

Standard rate: 15% (increased from 5% in 2020)

Zero-rated: Some essential goods and services

Exempt: Some financial services

What's Subject to VAT?

Most goods and services
Restaurant meals
Entertainment
Professional services
Rental income

VAT Registration

Mandatory if:

Annual turnover exceeds SAR 375,000
Expect to exceed threshold in next 12 months

Voluntary registration:

Available for businesses with lower turnover
Can claim input VAT

VAT on Employment

Salary: No VAT (employment is exempt)
Benefits in kind: May be subject to VAT
Reimbursements: Usually no VAT

Corporate Tax

Tax Rates

Standard rate: 20%

Qualifying companies: 15% (under certain conditions)

Oil and gas: Special rates apply

Who Pays Corporate Tax?

Saudi companies
Foreign companies with Saudi operations
Partnerships and sole proprietorships
Professional practices

Taxable Income

Business profits
Investment income
Capital gains
Rental income

Deductible Expenses

Business expenses
Depreciation
Interest payments
Professional fees
Marketing costs

Expatriate Tax Considerations

Tax Residency

Saudi tax resident if:

Present for 183+ days in tax year
Center of vital interests in Saudi Arabia
Saudi national (always resident)

Tax Treaties

Saudi Arabia has tax treaties with many countries:

Prevents double taxation
May reduce withholding taxes
Provides tax credits

Common Treaty Benefits

Reduced withholding on dividends
Reduced withholding on interest
Reduced withholding on royalties
Tax credits for foreign taxes paid

Expatriate Benefits

Tax-free benefits:

Housing allowance
Transportation allowance
Education allowance
Home leave allowance

Taxable benefits:

Cash bonuses
Stock options
Company car (personal use)

Investment Income

Dividends

Saudi companies: No withholding tax for residents

Foreign dividends: May be subject to tax in source country

Interest Income

Bank deposits: No tax

Bonds: No personal tax

Foreign interest: May be subject to source country tax

Capital Gains

Personal investments: No tax

Business assets: Subject to corporate tax

Real estate: No personal tax (may be subject to other fees)

Rental Income

Personal rental: No personal tax

Business rental: Subject to corporate tax

VAT: May apply to rental income

Real Estate Tax

Property Purchase

Registration fee: 5% of property value

Legal fees: 1-2% of property value

Agent commission: 2-3% of property value

Property Ownership

Annual fees: Minimal

Municipal fees: Vary by location

No property tax: Unlike many countries

Rental Income

Personal rental: No income tax

Business rental: Subject to corporate tax

VAT registration: Required if turnover exceeds threshold

Tax Planning Strategies

For Saudi Nationals

1. Maximize GOSI Contributions

Ensure full participation
Consider voluntary contributions
Plan for retirement benefits

2. Zakat Planning

Calculate accurately
Time payments strategically
Consider charitable giving

3. Investment Strategy

No capital gains tax on personal investments
Focus on growth and income
Consider tax-efficient structures

For Expatriates

1. Residency Planning

Understand tax residency rules
Consider treaty benefits
Plan for departure

2. Benefit Optimization

Maximize tax-free allowances
Structure compensation efficiently
Consider timing of benefits

3. Home Country Planning

Understand home country tax obligations
Use treaty benefits effectively
Plan for repatriation

For Businesses

1. Corporate Structure

Choose appropriate entity type
Consider tax-efficient structures
Plan for expansion

2. Transfer Pricing

Comply with international standards
Document related-party transactions
Avoid tax disputes

3. VAT Management

Register when required
Claim input VAT
Maintain proper records

Common Tax Mistakes to Avoid

1. Zakat Calculation Errors

Mistake: Not including all assets
Solution: Comprehensive wealth assessment
Mistake: Incorrect valuation methods
Solution: Use market values

2. GOSI Compliance Issues

Mistake: Not registering employees
Solution: Ensure proper registration
Mistake: Incorrect contribution calculations
Solution: Use official GOSI calculator

3. VAT Registration Delays

Mistake: Not registering when required
Solution: Monitor turnover closely
Mistake: Incorrect VAT calculations
Solution: Use proper accounting systems

4. Expatriate Tax Issues

Mistake: Not considering home country tax
Solution: Understand dual tax obligations
Mistake: Not using treaty benefits
Solution: Consult tax professionals

Using Our Saudi Arabia Tax Calculator

Our calculator provides:

Zakat calculations with current Nisab rates
GOSI contribution estimates
VAT calculations for businesses
Take-home pay for employees
Corporate tax estimates
Expatriate tax planning

Input required:

Income level
Nationality status
GOSI participation
Wealth for Zakat calculation
Business income (if applicable)

Important Dates and Deadlines

Zakat

Due date: During Ramadan
Calculation date: Lunar year anniversary
Payment: Can be made throughout the year

GOSI

Monthly contributions: Due by 15th of following month
Annual returns: Due by end of February
Benefit claims: As needed

VAT

Monthly returns: Due by 28th of following month
Annual returns: Due by end of February
Registration: Within 20 days of exceeding threshold

Corporate Tax

Annual returns: Due within 120 days of year-end
Provisional payments: Quarterly
Final payment: With annual return

Getting Professional Help

When to Consult a Tax Advisor

Complex situations:

Multiple income sources
International tax issues
Business restructuring
Estate planning

Expatriate issues:

Dual tax obligations
Treaty planning
Repatriation planning
Home country compliance

Business matters:

Corporate restructuring
Transfer pricing
International expansion
Tax disputes

Finding Qualified Advisors

Look for:

Saudi tax qualifications
International tax experience
Industry expertise
Language capabilities

Professional bodies:

Saudi Organization for Certified Public Accountants (SOCPA)
International tax advisors
Big 4 accounting firms

Conclusion

Saudi Arabia's tax system is remarkably simple for individuals, with no personal income tax and minimal tax obligations. However, understanding Zakat, GOSI, and VAT requirements is essential for proper compliance and tax planning.

For expatriates, the system offers significant tax advantages, but careful planning is needed to manage dual tax obligations and optimize benefits.

Use Our Free Saudi Arabia Tax Calculator →

Understand your tax obligations and plan your finances effectively. For complex situations, especially involving international tax matters, consult with qualified tax professionals.

Disclaimer: This guide provides general information only. Saudi tax law changes regularly, and individual circumstances vary. Always consult with a qualified tax professional for advice specific to your situation.