Quick Summary
- Saudi Labour Law does not mandate a specific transport allowance — it is contract-based
- Market standard is SAR 500–1,500/month cash transport allowance for most roles
- Senior roles often include a company car instead of cash allowance
- Transport allowance is not included in EOSB calculation — only basic salary counts
- If stated in your contract and not paid it is a contractual violation — file HRSD complaint
- A company car is a significant package benefit — factor it carefully in total compensation
Is Transport Allowance Legally Required?
Saudi Labour Law does not set a mandatory transport allowance amount. However once a transport allowance is written into your employment contract it becomes a legally enforceable contractual right. Your employer cannot unilaterally reduce or stop paying it without your agreement.
In practice transport allowance is a near-universal component of Saudi employment packages for professional roles. The absence of public transport infrastructure in most Saudi cities means a car is essential — and employers know this. Most include some transport benefit either as cash or a company vehicle.
Cash Allowance vs Company Car — Compared
| Type | How It Works | Financial Value | Best For |
|---|---|---|---|
| Cash Transport Allowance | Monthly cash paid to you — you arrange your own transport | SAR 500–1,500/month typical | Flexibility — use it how you choose |
| Company Car (provided) | Employer provides a car for your use | SAR 1,500–4,000/month equivalent value | Senior roles — significant package value |
| Company Car (with fuel card) | Car plus all fuel covered by employer | SAR 2,000–5,000/month equivalent | Best transport benefit — eliminates all car costs |
Typical Transport Allowance Amounts by Role Level
- Entry-level and administrative roles: SAR 400–800/month cash allowance. Some employers provide company bus or shared transport instead of individual cash allowance for blue-collar and administrative staff.
- Mid-level professional roles: SAR 800–1,500/month cash allowance. This covers fuel costs for a typical commute comfortably given Saudi Arabia's low petrol prices.
- Senior professional and managerial roles: SAR 1,500–2,500/month cash allowance or company car. At this level a company car becomes more common and is often expected.
- Director and C-suite roles: Company car as standard — often a premium vehicle (Toyota Land Cruiser, BMW 5 Series, Mercedes E-Class are common) with fuel card included.
Transport Allowance and EOSB
Like housing allowance, transport allowance is excluded from the EOSB (gratuity) calculation. Only your basic salary is used for EOSB. This is a critical point for package negotiation:
- SAR 8,000 basic + SAR 1,500 transport = SAR 9,500 total but EOSB is calculated on SAR 8,000 only
- Negotiating a higher basic salary rather than a higher transport allowance produces a better long-term financial result — even if the monthly take-home is identical
- A company car adds no value to your EOSB calculation but eliminates real monthly costs worth SAR 1,500–3,000 depending on your car and fuel usage
Company Car — Key Points to Clarify Before Accepting
If a company car is part of your offer, ensure these points are clearly addressed in writing:
- Personal use permitted? — some companies restrict company cars to commuting only. Others allow full personal use including weekends and family trips. This significantly affects the practical value of the benefit.
- Fuel card included? — fuel coverage can be worth SAR 400–800/month. Always confirm whether fuel is employer-covered or your own expense.
- Maintenance and insurance covered? — these are typically employer responsibilities for a company car but confirm explicitly.
- What happens if you resign or are terminated? — company car is returned immediately on employment ending. Ensure you have your own transport plan for the transition period.
- Vehicle grade? — confirm the specific vehicle model or minimum specification if relevant to you. Verbal promises about car grade are frequently not honoured without written confirmation.
If Your Transport Allowance Is Withheld
If your contract states a transport allowance and your employer stops paying it or reduces it without your agreement:
- Send a formal written email to HR citing the specific contract clause and the month(s) where payment was missing or reduced
- Allow one week for HR response before escalating
- File an HRSD complaint at hrsd.gov.sa if no resolution — withholding any contracted salary component is treated as a salary violation under Saudi Labour Law
- Include your contract, pay slips and HR correspondence as evidence in the complaint
Frequently Asked Questions
My employer provides a company bus to the worksite. Can I still ask for a cash transport allowance?
If your contract specifies a cash transport allowance, the employer providing a bus does not replace that cash entitlement — you are entitled to both unless your contract explicitly states that the bus service replaces the cash allowance. If your contract does not mention a cash allowance and only mentions transport provision, the bus service satisfies the transport benefit. Always check what your contract says — not what HR tells you verbally.
I have a company car but no fuel card. My employer says fuel is my responsibility. Is this correct?
It depends entirely on your contract. If your contract says "company car provided" without mentioning fuel, the employer's position may be technically correct — the car is provided and fuel is your expense. If you expected fuel to be included, this should have been confirmed in writing before accepting. Going forward, negotiate fuel coverage explicitly in your next contract review or renewal discussion.
Is the transport allowance taxable in Saudi Arabia?
Saudi Arabia has no income tax for expatriate workers. Your transport allowance — whether cash or company car — is received free of Saudi income tax. Your home country tax obligations on overseas income depend on your residency status and your country's specific tax laws. Check with a tax professional in your home country if you are uncertain.
Package Review or Allowance Dispute?
Whether you need your transport allowance reviewed against market rates or help resolving a dispute with your employer — book a consultation for clear guidance.