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

Calculate your Saudi Arabia income tax with our comprehensive guide covering tax rates, Zakat, social insurance, and tax planning strategies for residents and expats.

Tax Calculator TeamFebruary 22, 202511 min read
saudi arabia taxsaudi income taxzakattax calculatorGOSIexpat tax

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 Saudi Arabia tax calculator to 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.