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Wednesday, December 28, 2016

New Dependent’s Fee in Saudi Arabia? How to avoid it for the year 2017?

With the announcement of the budget 2017, expatriate’s community living and working in Saudi Arabia faced a great shock. Among many other positive changes brought in the budget, there is a new fee introduced called Dependent’s Fee for expatriates. Currently, expatriates living in Saudi Arabia don’t have to pay any fee for the dependents staying with them. Now with the introduction of this fee, they must pay the fee on every dependent which will increase gradually and by the mid of 2020, you must pay SR 400 per head per annum. Similarly, employers are currently paying SR 2,400 per annum for the iqama fee, which will also be gradually increased to SR 9,600 by the mid of 2020. In this post, we will explain how you can avoid this fee for a major part of the year 2017. Recommended: 8 Important Points about Saudi Budget 2017, everyone should know



Dependent’s Fee: Expatriates living in Saudi Arabia must pay SR 100 per month for every dependent under his Iqama starting from July 2017. For example, if you have a wife and 3 children, you must pay SR 400 per month.  This amount will increase to SR 200 per month per person July 2018. Expatriates must pay SR 300 per month per dependent from July 2019 and; SR 400 per person per month from July 2020. It means you must pay SR 1,600 per month for a wife and 3 children in the year 2020.



Iqama Fee:  The second type of fee is already imposed on expatriate employees which employers must pay if they have less than 50% Saudi employees. The current amount which employers must pay per annum on each expatriate employee is SR 2,400 per month. Currently, companies who have more than 50% Saudi employees do not have to pay the fee. However, from the next year, they must pay it on a discounted rate.

  • It is expected to increase to SR 4,800 for the year 2018 for those companies who do not employ 50% Saudis. The companies who employ 50% Saudis must pay SR 3,600 per employee per annum.
  • For the year 2019, It is expected to increase to SR 7,200 for those companies who do not employ 50% Saudis. The companies who employ 50% Saudis must pay SR 6,000 per employee per annum.
  • For the year 2020, It is expected to increase to SR 9,600 for those companies who do not employ 50% Saudis. The companies who employ 50% Saudis must pay SR 8,400 per employee per annum.

The timing of Payment: The dependent’s fee as well as Iqama fee will be paid with the renewal of the Iqama. The fee for dependents will be paid for the full year i.e. SR 1200 per dependent from July 2017. However, there is a way you can avoid this fee for a short term. The iqama can be renewed within 3 months of its expiry. Let’s say, if your iqama is going to expire on 25th September 2017 and you have 3 children and a wife, you must pay SR 4,800 additional for the renewal of the iqama from your pocket. But if you renew your Iqama 90 days before its expiry i.e. 26th of June, you can escape this fee for one full year. Similarly, next year fee will be doubled if you renew your Iqama after July, you can use the same trick to pay the old fee.


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