Who is responsible to pay the cost of transferring sponsorship in Saudi Arabia?

We have been hearing since our childhood that all the expenses related to the Transfer of Sponsorship are the responsibility of the employer (Kafeel). When my uncle took his 3rd transfer, he had to pay a certain amount as Iqama Transfer Fee. Similarly, when I entered into the practical life I noticed that almost all companies in Saudi Arabia are asking their employees to pay some amount as Iqama Transfer fee which is quite illegal. After knowing this, I started looking into the Saudi Labor Law about the relevant clauses. It gave me enough material to write this article.

General Practice in Saudi Arabia regarding Iqama Transfer Fee

It is the general practice in Saudi Arabia that almost 99.99% companies don’t bear full charges of Iqama transfer. They only bear the charges equivalent to the amount payable as first transfer of Iqama i.e. SR 2,000. Normally, there are charges of SR 2,000/- for the first transfer, SR 4,000/- for the second transfer and SR 6,000/- for any transfer after that. Now the question is who will bear the expenses of transfer of sponsorship? Generally, the employer bears only SR 2,000 for the transfer of sponsorship. Any expense over and above this amount is borne by the employee. Let’s say, if it is your third transfer, you will bear SR 4,000/- and employer will bear SR 2,000/-.

Fee for Iqama Transfer

  • Fee for First Iqama Transfer is SR 2,000/-
  • Fee for Second Iqama Transfer is SR 4,000/-
  • Fee for Third Iqama Transfer & onwards is SR 6,000/-

Legal Responsibility of Iqama Transfer Fee

Now let’s talk about the legal responsibility of Iqama Transfer Fee. According to Article 40 (3) of the Saudi Labor Law, all the responsibility regarding transfer fee of Iqama lies on the shoulders of Kafeel to whom an employee is transferring in. For example, if you are getting transferred from Kafeel A to Kafeel B, the Iqama transfer fee will be paid by Kafeel B. No portion of Iqama transfer fee will be legally borne by the Employee. However, as already explained almost all companies are exploiting employees by charging Iqama Transfer Fee from them which is a clear violation of Saudi Labor Law.