Zakat on Salary in Saudi Arabia

Housing benefit types: Saudi Arabia employment contracts typically include housing support in two forms. Government and some large private employers provide company-owned housing directly, particularly in compounds. Other employers provide cash housing allowances, commonly ranging from SAR 2,000 to 10,000+ monthly depending on position and city.

Zakat on cash housing allowance: If you receive housing allowance in cash from your Saudi employer and save portions by choosing less expensive accommodation or sharing costs, those savings are zakatable. Cash allowance is part of your total salary income. If you receive SAR 5,000 monthly housing allowance but only spend SAR 3,500 on rent, the SAR 1,500 monthly savings accumulate into zakatable wealth from your Saudi salary.

Company-provided housing: If your Saudi employer provides accommodation directly in a company compound or pays your rent to the landlord without giving you cash, this non-monetary benefit is not zakatable. You never possess this money, so it cannot be zakatable wealth. Only when you receive and save cash allowances do they become subject to Zakat.

Transport benefits in KSA: Saudi employers commonly provide transportation benefits as cash allowances (SAR 1,000 to 3,000+ monthly) or company vehicles. Some positions in oil and gas or executive roles include luxury vehicle allowances or company-leased cars with fuel and maintenance covered.

Cash transport allowances: Transportation allowances paid in cash are part of your total Saudi salary. If you receive SAR 2,500 monthly for transportation but use public transport, carpool, or have alternative arrangements saving SAR 1,500 monthly, this accumulates into zakatable wealth. All cash you receive and save from your Saudi employment is zakatable when above nisab for hawl.

Company vehicles: If your Saudi employer provides a vehicle for your use, this is a non-cash benefit. You do not own the car and the fuel payments never enter your possession, so this benefit is not zakatable. However, if you receive a vehicle allowance in cash to lease or purchase your own car, that cash is part of your salary and saved portions are zakatable.

Saudi bonus culture: Many Saudi employers, especially government entities and large corporations, pay substantial annual bonuses, Eid bonuses, and performance incentives. These can range from one month's salary to several months' worth of compensation, significantly increasing annual income.

Zakat on bonus income: All bonus payments from your Saudi employer are part of your total salary income for Zakat purposes. Whether you receive SAR 30,000 as an Eid bonus, SAR 50,000 as annual performance bonus, or SAR 20,000 as a discretionary reward, include accumulated savings from these payments in your annual Zakat calculation. See our Bonus Income guide for detailed treatment.

Ramadan and Eid timing: Many Muslims in Saudi Arabia receive bonuses during Ramadan or before Eid. If you choose Ramadan as your Zakat date and receive a large bonus during the month, include it immediately in that year's calculation. This is actually beneficial as you have fresh funds to pay Zakat during the blessed month.

Family support benefits: Saudi employers, particularly those hiring expats for professional positions, often provide education allowances for children attending international schools. These can be substantial given school costs in Riyadh, Jeddah, and other cities, sometimes SAR 40,000 to 100,000+ annually per child.

Cash versus direct payment: If you receive education allowance in cash and save portions by choosing less expensive schools, using government schools (for eligible children), or having fewer dependents than the allowance covers, those savings are zakatable. If your Saudi employer pays school fees directly to institutions without giving you cash, this is a non-cash benefit and not zakatable.

Dependent allowances: Some Saudi contracts include monthly allowances per dependent (spouse, children), typically SAR 500 to 1,500 each. All cash allowances you receive are part of your total Saudi salary. Accumulated savings from any family allowances must be included in your annual Zakat calculation when above nisab for hawl.

Working in Saudi Arabia advantage: Living and working in Saudi Arabia provides proximity to Mecca and Medina, making Hajj performance easier logistically and often less expensive than for Muslims abroad. However, you still need to accumulate funds for Hajj expenses even if costs are lower.

Zakat on Hajj savings: Money saved for obligatory Hajj from your Saudi salary is zakatable wealth. The fact that you intend to use funds for a religious obligation does not exempt them from Zakat. If you accumulate SAR 20,000 for Hajj expenses and this amount remains above nisab for one lunar year, you must pay 2.5% Zakat on it. Islamic scholars unanimously agree that designated purpose does not exempt wealth from Zakat.

Timing consideration: If you are actively saving for Hajj and plan to perform it soon, you might reach your savings goal and perform Hajj before the one-year hawl completes. In this case, no Zakat would be due on those specific funds because they did not remain in your possession above nisab for the full lunar year. The key is whether the wealth completes hawl.

Frequent Umrah from Saudi Arabia: Working in Saudi Arabia enables frequent Umrah visits to Mecca throughout the year. Many Muslims living in Jeddah, Riyadh, or other Saudi cities perform Umrah monthly or several times annually. Savings for these visits must be considered in Zakat calculation.

Umrah funds and Zakat: If you save SAR 2,000 monthly from your Saudi salary specifically for monthly Umrah trips and you spend it within the month, this rapid turnover means the money does not complete hawl. However, if you accumulate SAR 24,000 over the year for multiple Umrah trips and this amount stays above nisab for one lunar year, it is zakatable wealth requiring 2.5% Zakat payment.

Ongoing Umrah accounts: Some Muslims in Saudi Arabia maintain dedicated savings accounts for Umrah with continuous balances. If this account consistently holds SAR 10,000 or more for one complete lunar year, that balance is zakatable on your Zakat date even though designated for religious travel.

Supporting family pilgrimage: Many Muslims working in Saudi Arabia save from their salary to sponsor parents, siblings, or other family members for Hajj or Umrah. This is a noble intention and praiseworthy Islamic act, but it affects Zakat calculation.

Zakat on sponsorship savings: If you save SAR 40,000 from your Saudi salary to bring your parents for Hajj next year, this is your wealth in your possession designated for a future expense. Until you actually spend it on their Hajj, it remains zakatable wealth. If it stays above nisab for one lunar year, calculate 2.5% Zakat on this amount.

After payment consideration: Once you actually pay for family members' Hajj or Umrah (booking flights, hotels, purchasing packages), that money is spent and no longer your wealth. From that point, it is not zakatable. The zakatable period is while you are accumulating and holding the funds before spending.

Mecca and Medina residents: Muslims fortunate to work and live in Mecca or Medina have unique spiritual opportunities. Daily prayers in the Haram, frequent Umrah, and proximity to sacred sites are tremendous blessings. However, cost of living in these holy cities is often higher.

Zakat for Haramain residents: Working in Mecca or Medina does not change Zakat calculation on salary. Calculate Zakat on accumulated wealth from your salary the same way as Muslims working elsewhere in Saudi Arabia. The spiritual benefits of living near the holy mosques do not alter the technical requirements of nisab and hawl for Zakat obligation.

Local Zakat distribution: Many scholars note that paying Zakat to eligible recipients in Mecca and Medina carries extra spiritual reward. If you work in these holy cities, consider distributing your Zakat locally to poor residents, travelers in need, or Islamic institutions serving pilgrims and residents in the Haramain.

Employment nationalization: Saudi Arabia's Nitaqat program encourages hiring Saudi nationals over expats in various sectors. Companies meeting Saudization quotas receive benefits while those falling short face penalties. This has created employment opportunities for Saudi nationals across industries.

Zakat on Nitaqat program salaries: Salaries earned through Saudization programs follow normal Zakat principles. Whether your Saudi employer hired you to meet quotas or for pure merit, your salary is income like any other. Calculate Zakat on accumulated savings from Nitaqat program employment the same way: annually on wealth above nisab for hawl after GOSI deductions.

Government support elements: Some Saudization programs include government wage support where the state subsidizes portions of Saudi national salaries to encourage hiring. These subsidies are paid to your employer who then pays you full salary. From your perspective, you receive salary and calculate Zakat on accumulated savings regardless of who funded what portion.

Economic diversification jobs: Vision 2030 is creating employment in new sectors like tourism, entertainment, technology, renewable energy, and cultural initiatives. Jobs at NEOM, Red Sea Project, Qiddiya, and similar megaprojects offer competitive salaries to attract Saudi and international talent.

Zakat on Vision 2030 salaries: Employment in Vision 2030 projects does not create different Zakat rules. Whether you work for traditional oil sector employers or new economy initiatives, calculate Zakat on accumulated salary savings using the standard Islamic method. High salaries in these sectors may mean higher zakatable wealth accumulation from your Saudi employment.

Relocation packages: Vision 2030 projects often include substantial relocation packages, housing in new developments, and comprehensive benefits to attract talent. Cash components of these packages are part of your total Saudi salary. Non-cash benefits like provided housing are not zakatable. Include all cash compensation in accumulated wealth for Zakat calculation.

Public sector salaries: Saudi government ministries, agencies, and institutions employ hundreds of thousands of Saudi nationals. Government salaries include base pay, allowances, and benefits structured according to civil service grades and years of service.

Zakat for government employees: Saudi government employees calculate Zakat on accumulated salary savings after GOSI deductions. Government employment provides stability and comprehensive benefits, often enabling consistent savings. On your annual Zakat date, total all accumulated government salary savings, add other zakatable assets, and calculate 2.5% Zakat if above nisab for hawl.

Pension considerations: Saudi nationals contribute to GOSI throughout their careers for eventual pension benefits. While actively employed, GOSI deductions reduce zakatable income. Upon retirement, pension payments received become your income, and accumulated savings from pensions are zakatable when above nisab for hawl using the same annual calculation method.

Private sector employment: Saudi Arabia's private sector spans from small businesses to multinational corporations. Salaries vary dramatically by industry, company size, and position. Private sector jobs in finance, healthcare, education, retail, and services employ both Saudis and expats.

Zakat in private employment: Private sector employees in Saudi Arabia calculate Zakat identically to government employees. Saudi nationals deduct GOSI and calculate on net salary savings. Expats include full gross salary savings. The employer type (private, government, or semi-government) does not change Islamic Zakat methodology.

Free zone employment: Economic cities and free zones like KAEC (King Abdullah Economic City) offer employment with competitive packages. Free zone employment contracts follow Saudi labor law and have similar salary structures. Calculate Zakat on accumulated wealth from free zone salary the same way as mainland employment in Riyadh, Jeddah, or Dammam.

Capital city compensation: Riyadh as the capital hosts government ministries, major corporations, and diplomatic missions. Salaries in Riyadh often include capital city allowances or cost of living adjustments. Government jobs concentrate in Riyadh, offering stable civil service salaries with comprehensive benefits.

Cost of living impact: Riyadh's cost of living, particularly housing in desirable districts, can be substantial. A salary that appears generous might leave moderate savings after rent, education, and family expenses. For Zakat on salary in Riyadh, what matters is actual accumulated savings above nisab for hawl, not gross salary numbers.

Calculation principle: Calculate Zakat on what you actually save from your Riyadh salary, not on gross income. If high living costs consume most salary with minimal savings remaining, you may have limited zakatable wealth. Conversely, if you live modestly and save aggressively, significant Zakat may be due.

Commercial hub salaries: Jeddah, Saudi Arabia's commercial capital, offers employment in trade, finance, healthcare, education, and services. The city's diverse economy provides varied salary levels. Proximity to Mecca creates unique opportunities in Hajj and Umrah related businesses and services.

Mecca and Medina connection: Living in Jeddah while working provides easy access to Mecca and Medina for regular Umrah and worship. This spiritual advantage does not change Zakat calculation but may increase Umrah-related expenses. Include any Umrah savings that remain above nisab for hawl in your zakatable wealth from Jeddah salary.

Port and trade salaries: Jeddah's status as a major port creates employment in logistics, shipping, customs, and international trade. These sectors often pay competitive salaries. Calculate Zakat on accumulated savings from trade sector employment using the standard annual method regardless of industry.

Energy sector compensation: Saudi Arabia's Eastern Province, including Dammam, Dhahran, Khobar, and Jubail, hosts the massive oil and gas industry. Saudi Aramco and related companies offer premium compensation packages including base salary, allowances, bonuses, and comprehensive benefits.

High earning potential: Oil sector salaries in Eastern Province often exceed other regions significantly. Technical positions, engineering roles, and management positions can earn SAR 30,000 to 100,000+ monthly. This high income often translates to substantial accumulated wealth from salary, increasing Zakat obligations.

Rotation and offshore work: Some Eastern Province positions involve rotation schedules or offshore work with additional allowances. Include all rotation premiums, offshore allowances, and hazard pay in your total Saudi salary. Accumulated savings from these enhanced compensation packages are zakatable when above nisab for hawl.

Regional salary variations: Cities like Tabuk, Abha, Najran, Ha'il, and other smaller urban centers offer lower salaries than Riyadh, Jeddah, or Eastern Province. However, living costs are correspondingly lower, particularly for housing and daily expenses.

Savings potential: Lower salaries do not necessarily mean lower zakatable wealth. If you earn SAR 10,000 monthly in Abha with SAR 2,000 rent versus SAR 25,000 in Riyadh with SAR 8,000 rent, actual savings capacity might be similar. Calculate Zakat on accumulated wealth regardless of gross salary level or city.

Nisab consistency: Nisab threshold in SAR is the same across all of Saudi Arabia on any given date since it is based on precious metal prices. Whether you work in Riyadh or Tabuk, compare your accumulated wealth to the same nisab value. Regional location does not change the universal Islamic threshold.