Frequently Asked Questions
Are there official per diem rates in Saudi Arabia?
Saudi Arabia does not publish a universal per diem rate that applies to all private companies. Most organizations set their own daily allowances for meals and incidental expenses based on internal travel policies. However, government entities and large corporations may follow internal guidelines that specify fixed daily allowances depending on the travel destination and employee level.
Do Saudi companies use per diem or reimbursements?
Both methods are widely used. Some organizations provide employees with a fixed per diem allowance so they can cover meals and small expenses without needing to submit receipts. Other companies require employees to submit receipts and reimburse the exact amount spent. Per diem policies are often used by larger companies because they simplify travel expense management and reduce administrative work.
Are per diem allowances taxable in Saudi Arabia?
Saudi Arabia does not impose personal income tax on most employees. As a result, per diem allowances paid to employees for business travel are generally not treated as taxable income. Companies should still record per diem payments clearly within their travel policies and expense management systems for proper accounting and compliance.
What is a per diem or daily allowance?
A per diem (Latin for "per day") is a fixed daily amount a company pays employees to cover meals, accommodation, and incidentals while travelling for work. Using a per diem rather than reimbursing actual receipts reduces administrative overhead and gives employees spending certainty.
Can I use these rates for freelancers, contractors, or guests?
Yes. Many companies in the GCC engage contractors and consultants on short-term assignments. Per diem structures are commonly used in these arrangements, and this calculator works equally well for employment contracts and independent contractor agreements.
What's the difference between a per diem and a living allowance?
Per diem rates are designed for short-term business travel — typically trips under 30 days. For longer assignments, such as a six-month project in Riyadh or a multi-year regional posting in Abu Dhabi, companies typically switch to a cost-of-living allowance (COLA) or expatriate package instead. These are structured differently: they factor in housing, schooling, home leave flights, and hardship premiums, and are benchmarked against data from specialist mobility firms rather than daily travel rate surveys. If you're managing a longer posting, our calculator can still be useful for the initial mobilisation period and short business trips made during the assignment, but it shouldn't be used as the basis for a full expat compensation package.
Are per diems subject to income tax?
In zero-income-tax jurisdictions like the UAE, Qatar, Kuwait, and Bahrain, per diem payments are generally not subject to personal income tax for the employee — which is one of the reasons the GCC is attractive for international assignments. However, your home country's tax rules still apply if your employees remain tax residents there. UK employees on secondment to Dubai, for example, may still need to declare per diem payments above HMRC's approved rates. Always verify with a tax adviser familiar with both the host country and the employee's country of residence.
