Pricing
Manpower Contract Pricing in Saudi Arabia: Cost Build-Up
12 October 2026 · 8 min read · By NextBid Bid Experts
A manpower contract price is built position by position: pay, statutory costs, provisions, supervision, overhead, financing and margin. Here are the cost layers and the contract terms that decide what you can recover.
Manpower contract pricing in Saudi Arabia means building the monthly cost of every position in the manpower bill of quantities from the ground up (pay, statutory costs, provisions and mobilisation), then adding supervision, non-labour costs, overhead, financing and margin. The aim is a rate you can explain line by line, because the contract terms and the law decide how much of any cost you can recover later.
What goes into the monthly cost of one position?
In short, the cost of a post is pay plus employer statutory costs, provisions and mobilisation, multiplied by the headcount needed to cover the post; the price then adds supervision, overhead, financing, margin and taxes. Take every statutory amount from its official source on the day you price, because your offer stays valid for 90 days from opening under the current law (90 working days under the new law). For setting the final price against competitors, see our guide to bid pricing strategy.
| Cost layer | What it covers | Where the figure comes from |
|---|---|---|
| Pay | Basic wage and allowances per role, meeting the booklet's minimum qualifications and any pay floor for transferred staff | Your payroll policy and the booklet's role table |
| GOSI employer share | Employer contributions to the General Organization for Social Insurance; the annuities branch is compulsory only for Saudi nationals, so the cost differs by nationality | GOSI's current contribution rates |
| Government fees for non-Saudi staff | Recruitment, residence and work permits (issue and renewal), exit and re-entry visas, change of profession, service transfer, fines for delay | The Ministry of Human Resources and Social Development (HRSD), which lists these as employer costs; take any levy from it when you price |
| End of service, insurance and travel | Monthly provisions for what each employee is owed when employment ends and for the medical premiums your contracts cover, plus the return ticket the employer usually bears for non-Saudi staff | The Labor Law, each employment contract and insurer quotations |
| Leave and relief cover | Extra headcount so each post stays staffed during leave, sickness and rest days | Your rota and contract entitlements |
| Mobilisation and kit | Hiring, onboarding, training, uniforms, protective equipment and tools, spread over the term | Your cost records and supplier quotations |
| Supervision and safety | Supervisors, managers and the safety officer the model booklet requires | The booklet's team table and your organisation chart |
| Overhead and financing | Head office costs, bank charges on guarantees, and the cost of carrying payroll until invoices are paid | Your cost records and bank terms |
| Margin and taxes | Your profit, plus the fees and taxes the law says the contract value must include | Your decision and the booklet's price form |
How does the Saudi and non-Saudi mix change the price?
The Ministry of Finance model booklet for general services binds the contractor to employ and treat workers, Saudi or foreign, in line with the Labor Law and the Social Insurance Law, and lets each entity amend its workforce conditions, so read your own booklet.
- Targeted positions. The entity may approve Saudis for the positions it targets when they meet the minimum qualifications, so check the role table before you fix the mix.
- Transferred staff. The contractor must transfer all Saudi employees on the current contract with salaries and benefits no lower than before, placing them in the positions in the manpower bill of quantities. That sets a pay floor before you price.
- Eligibility documents. The current Implementing Regulations list a GOSI certificate and a certificate proving the required job Saudization percentage among a bidder's documents, valid when bids are opened. See our guide to ZATCA and GOSI certificates.
- Separate cost lines. GOSI and government fees change with nationality, so price Saudi and non-Saudi positions on separate lines. The model also requires female staff where women's sections or sites need them.
Which contract terms turn into price risk?
- A fixed price over a long term. Continuing-service contracts such as cleaning and maintenance can run up to five years under both laws, longer only with the Ministry's approval. Prices can change only for price changes in main items or services set by the Regulations, adjusted customs duties, fees or taxes, or unforeseen difficulties, so treat ordinary cost movements, such as wage reviews, as yours unless the booklet says otherwise.
- Payment tied to performance. Both laws require performance terms in these contracts, letting the entity reduce payments or terminate when performance is unsatisfactory. For a contractor's shortfall the current law allows a fine of up to 20% of the contract value plus deduction of the work not executed; the new law lowers the cap to 15%. Under both laws the Minister can approve a higher percentage if bidders are told before they submit offers, so check your booklet.
- Slow cash. The current Implementing Regulations give the entity 15 working days to approve an invoice and send the payment order to the Ministry, which pays within 45 days of receiving it. Payroll does not wait, so carry the gap in financing; the new law leaves the payment periods to its Regulations.
- Guarantees. The final guarantee is 5% of the contract value under both laws and, in continuing-service contracts, falls each year with the work completed, never below 5% of the remaining work. The initial guarantee is 1% to 2% of the offer.
- Billable months and subcontracting. The current Implementing Regulations let an entity exclude summer holidays from cleaning and maintenance contracts with educational entities and cut the workers in that period. Subcontracting needs the entity's written approval under both laws; the current Regulations limit it to 30% of the contract value unless prior consent allows more.
How do you check the build-up before you submit?
- Reconcile headcount with the manpower bill of quantities, role by role and month by month, and price every line: the current Implementing Regulations bar unpriced items unless the tender allows them, and the committee may rule out the bid or treat them as included in the total.
- Make figures, words and totals agree. Under the current Regulations the committee may recommend excluding an offer whose corrected arithmetic errors exceed 10% of the price list or offer total; see our guide to preparing the financial offer.
- Show fees and taxes as your booklet requires; the model booklet says every price must include all taxes, fees and other expenses.
- Record the source and date of every statutory rate, fee and quotation, and have someone who did not build the price re-check each row against its source.
- Keep the working papers. Under both laws an offer cannot be excluded for low price unless it is 25% or more below the estimated cost, and only after the committee asks the bidder in writing for the components of the offer and the reasons; see our guide to abnormally low bids.
A manpower rate is only as strong as its build-up: trace every line to a booklet clause, a dated official rate or a written quotation, so one file prices the bid and answers a low-price query.
Frequently asked questions
What does a manpower contract price include in Saudi Arabia?
Pay and allowances, the employer's GOSI share, government fees for non-Saudi staff, end-of-service and travel provisions, leave cover, insurance, mobilisation, supervision, overhead, financing and margin, with fees and taxes included in the total.
Who pays work permit and residence permit fees, the employer or the worker?
HRSD states that the employer bears the fees for recruiting non-Saudi workers and for issuing and renewing the residence permit and work permit, plus fines for delay. Price them into your rates.
Can I raise my rates during a multi-year contract?
Only in limited cases: price changes in main items or services set by the Regulations, adjusted customs duties, fees or taxes, and unforeseen difficulties. Treat other cost increases as yours unless your booklet says otherwise.
Do I need a written cost breakdown if my price is low?
You should have one ready. An offer 25% or more below the estimated cost can be excluded only after the committee asks the bidder in writing for the components of the offer and the reasons. This applies under both laws.
Does the new procurement law change manpower pricing?
The new law takes effect in early January 2027, and tenders offered before then stay under the current law. The standard cap on shortfall fines in continuing-service contracts falls from 20% to 15% (a higher rate needs the Minister's prior approval and disclosure to bidders), and payment periods are left to the new Regulations.
NextBid's pricing strategy support covers cost analysis, market benchmarks and balancing win probability with margin, and you always own and approve the final prices.