Guide to Hiring in Saudi Arabia

Employment trends and job market analysis

The economy of Saudi Arabia has a long history, but it is now a huge player on the global stage. Saudi Arabia is one of the world's largest oil producers and remains the world's largest exporter of crude oil, with state oil company Saudi Aramco at the centre of its energy sector

More than 90% of Saudi Arabia’s non-oil exports are made up of electrical appliances, petrochemicals, construction materials, plastics and metal goods. 

Saudi Arabia’s unique location makes it central to Asia, Europe and Africa, making it a natural channel for worldwide trade routes, not to mention a popular location for international business expansion. 

Payroll and taxes

Saudi Arabia's federal government typically enacts all laws related to social taxes. This includes the occupational hazards branch and annuities contributions of the social insurance system.

There is no personal income tax in Saudi Arabia.

Employer contributions

Saudi Arabia has an extensive social security system that provides old age, disability, and survivor benefits for its employed and self-employed workers.

Saudi Arabia operates two parallel social insurance systems following the introduction of the new Social Insurance Law.

For Saudi nationals registered with the General Organisation for Social Insurance (GOSI) before 3 July 2024, employers contribute 11.75% of the employee’s insurable wage, comprising 9% pension contributions, 2% occupational hazards insurance, and 0.75% SANED unemployment insurance.

For Saudi nationals entering the workforce on or after 3 July 2024, contribution rates increase gradually each year through 2028. In 2026, employers contribute 12.25% from January to June and 12.75% from July onwards.

For non-Saudi employees, employers contribute 2% of the employee’s insurable wage toward occupational hazards insurance only.

GOSI contributions are calculated on the employee’s insurable wage, which consists of the basic salary plus housing allowance. Variable payments such as commissions, bonuses, transport allowances, and other irregular allowances are generally excluded. The minimum insurable wage is SAR 1,500 per month, and the maximum insurable wage is SAR 45,000 per month.

Employee contributions

Employees in Saudi Arabia pay the following contributions tSaudi employees contribute to the GOSI and SANED unemployment insurance. Employees registered before 3 July 2024 contribute a total of 9.75% of their insurable wage, consisting of 9% pension contributions and 0.75% SANED contributions.

For employees entering the workforce on or after 3 July 2024, contribution rates increase gradually through 2028. In 2026, employee contributions are 10.25% from January to June and 10.75% from July onwards. Non-Saudi employees do not contribute to GOSI and no deductions are made from their salary for social insurance purposes.

Minimum retirement age

Saudi Arabia introduced a new Social Insurance Law in 2024 that gradually increases the retirement age for newly registered workers.

Employees who entered the social insurance system before 3 July 2024 remain subject to transitional retirement rules, with retirement ages ranging between 58 and 65 depending on their circumstances.

Employees entering the workforce on or after 3 July 2024 are generally subject to a retirement age of 65 under the new unified social insurance framework.

Minimum wage

Saudi Arabia does not have a universal statutory minimum wage for all workers. However, a salary of SAR 4,000 per month is the threshold used for Saudisation (Nitaqat) compliance purposes.

A Saudi employee earning SAR 4,000 or more is counted as one full employee for Nitaqat calculations. Employees earning between SAR 3,000 and SAR 4,000 count as half an employee, while those earning less than SAR 3,000 are not counted toward Saudisation quotas.

No statutory minimum wage currently applies to expatriate employees.

Working hours

Saudi Arabia’s standard working week is typically five days, running from Sunday to Thursday, with Friday and Saturday forming the weekend. Under the Labour Law, employees may not work more than eight hours per day or 48 hours per week unless specific exceptions apply.

During Ramadan, working hours for Muslim employees are reduced to a maximum of six hours per day or 36 hours per week. Many employers voluntarily apply reduced hours more broadly across their workforce during the holy month.

Overtime that exceeds 48 hours per week should be paid at an overtime compensation rate, which typically stands at 150% of the employee’s average salary rate. Employers must also pay the employee an additional wage for any type of work performed during weekly rest days or during official holidays.

Since the Labour Law amendments that came into force in February 2025, employers may, with employee consent, provide compensatory paid leave instead of overtime pay. Compensatory leave must be granted at a minimum rate of 1.5 hours for every overtime hour worked, and it must generally be used within 60 days unless agreed otherwise. Employees can accumulate a maximum of 30 days of compensatory leave per year, and if they leave the company before using it, they are entitled to monetary compensation for the unused balance.

Labour laws and employee rights

The labor law in Saudi Arabia is primarily regulated by the Labour Regulation, Royal Decree No M/51 of 23 Sha’ban 1426 Hejra. 

Labour laws to be aware of in Saudi Arabia include:

Saudisation

Employers are obligated to attract and hire Saudi nationals, retain them in employment, and provide opportunities for them to showcase their suitability for the job through training. As per the labour law, at least 75% of the workforce in any organisation must consist of Saudi nationals. However, the Government has the authority to temporarily reduce this percentage in certain cases, such as when there is a lack of technically or academically qualified workers, or when a vacancy cannot be filled by a Saudi national.

Saudi Arabia has significantly expanded its workforce nationalisation efforts under Vision 2030. Private-sector employment among Saudi nationals has reached record levels, with more than 2.5 million Saudis employed in the private sector. Saudisation requirements continue to evolve through sector-specific localisation initiatives and Nitaqat compliance requirements.

Under the Nitaqat scheme, a Saudi employee must be paid a minimum amount to count towards the company's quota. For Saudisation purposes, a Saudi employee earning SAR 4,000 or more per month is counted as one full employee toward Nitaqat requirements. Employees earning between SAR 3,000 and SAR 4,000 count as half an employee, while employees earning less than SAR 3,000 are not counted toward Saudisation targets.

The list of occupations reserved exclusively for Saudi nationals continues to expand. In addition to longstanding restrictions in areas such as human resources, retail, hospitality, tourism, healthcare, and administrative functions, recent localisation initiatives have introduced additional restrictions across professions including HR, marketing, public relations, procurement, administration, accounting, and other professional services. Employers should verify current localisation requirements for their sector before hiring.

Companies or individuals that recruit Saudi nationals to work abroad or foreign nationals to work in Saudi Arabia must obtain a license from the Ministry of Human Resource and Social Development.

Hiring foreign nationals

According to the labour law, work is a fundamental right granted to Saudi citizens. Non-Saudi individuals can engage in employment under specific conditions outlined in the Law. Saudi nationals typically receive priority in employment, and certain positions are exclusively reserved for them. Foreign nationals (excluding citizens of Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates, who are all GCC nationals with reciprocal treatment) require a valid residence/work permit to work in Saudi Arabia. Such permits are exclusively granted to workers who have an employment contract with a Saudi Arabian employer and fall under their responsibility.

Saudi Arabia has implemented significant labour mobility reforms and moved away from the traditional sponsorship model. Employment relationships are now increasingly governed through digital employment contracts and labour mobility services available through the Qiwa platform. Eligible employees can transfer between employers without requiring a traditional no-objection certificate, subject to applicable labour law requirements and contractual obligations.

Non-Saudi employees must have a written, fixed-term employment contract. Under the 2025 amendments to the Labour Law, if the contract does not specify its duration, the term is deemed to be one year from the employee's actual start date. If the employment relationship continues after the term ends, the contract is deemed automatically renewed for an equivalent period.

Foreign nationals must work in accordance with the profession and authorisations reflected in their employment and immigration records. Labour mobility rules have expanded significantly in recent years, allowing eligible employees to transfer employment under defined regulatory conditions without requiring approval from a previous employer.

Employers are responsible for providing mandatory medical insurance to their foreign employees through the Council of Cooperative Health Insurance (CCHI) framework. Employers are explicitly prohibited from retaining an employee's passport or Iqama at any time. Violations carry a fine of SAR 3,000 per affected worker

Employers of foreign nationals are responsible for all recruitment costs, including work visas, residence permits, their renewal, and return tickets to the employee's home country upon employment termination. Moreover, employers face higher "expat fees" if they employ more foreign nationals than Saudi citizens.

Exit, re-entry, and labour mobility processes have been substantially modernised through Saudi Arabia’s labour reforms and digital government platforms. Eligible foreign employees can access labour mobility and travel services directly through approved government systems, subject to applicable immigration requirements.

The labour law doesn't apply to non-Saudi nationals performing specific tasks for two months or less.

Discrimination laws

Employees are prohibited from discriminating in recruitment and advertising job positions based on sex, disability, or age.

The Labour Law amendments that entered into force in February 2025 expanded employer obligations relating to equal treatment and equal opportunity. Employers are expressly prohibited from practices that undermine equal treatment in employment, recruitment, promotion, compensation, or workplace opportunities on the basis of protected characteristics.

Employers who violate anti-discrimination provisions may face fines under the Ministry's updated penalty schedule (last revised February 2026). Fines vary based on the specific violation type, its severity, and whether it is a repeated offence. Employees who report violations may be entitled to a share of any fine imposed on the employer under the applicable regulations.

Individuals might have the option to file claims of unlawful discrimination in the Labour Court or civil courts to seek damages, although there is limited evidence of this occurrence. The prohibition of workplace discrimination is well-established in Saudi labour law, having been introduced in 2019 and materially expanded under the 2025 amendments. In case of a discriminatory dismissal, an employee could potentially claim compensation in the Labour Court on the grounds that it is an invalid reason for termination. 

Employment contracts

An employment contract is defined by the labour law as a contract between an employer and an employee. The employee agrees to work under the management or supervision of the employer for a wage. An employer is any natural or corporate person employing one or more workers for a wage, while an employee is any natural person working for an employer under its management or supervision for a wage, even if they are not under its direct control.

In general, an employment contract should be in writing and in duplicate, with each party retaining a copy. However, if there is no written contract, the employee can still establish the existence of a contract and their entitlements using any necessary proof. Certain contracts, such as those of foreign nationals and part-time workers, must always be in writing.

Employment contracts and related records must be in Arabic, as outlined by regulations. If any other language is used alongside Arabic, the Arabic text takes precedence. Under the 2025 amendments, all employment contracts must be documented electronically through the Ministry of Human Resources and Social Development's Qiwa platform. Only electronic contracts registered on Qiwa are formally recognised by MHRSD, though employees may still prove their employment relationship through paper contracts or other evidence if the employer fails to register the contract electronically. Social insurance registration remains the responsibility of the GOSI through a separate portal.

Trade unions

Although trade unions are neither explicitly prohibited nor recognised by the labour law in Saudi Arabia, employees do not possess the right to form or join independent trade unions or partake in their activities. The sole authorised form of employee representation comes in the shape of a labour committee. A Governmental Decree and Resolution allow the formation of such a committee on a voluntary basis in workplaces with over 100 Saudi nationals as employees.

The establishment of a committee must receive approval from the Ministry of Human Resource and Social Development. The committee consists of three to nine members, depending on the size of the workforce, elected by the Saudi national employees. Meetings are attended by representatives from both the employer and the Ministry. The primary responsibilities of the committee encompass making recommendations to company management on various aspects, including the enhancement of working conditions, productivity, health and safety standards, management and technical training programs, and social and cultural facilities. The committee is also entrusted with deciding how disciplinary fines imposed on employees are utilised.

The employer is obliged to provide the necessary resources, time off, and information to the labour committee. The Ministry holds the authority to dissolve committees if they infringe regulations or pose a threat to public security. Furthermore, labour committees are represented on the National Committee of Labour Committees, established to express workers' viewpoints on certain issues and represent them in international forums such as the International Labour Organisation.

Health and safety

The labour law mandates employers to prioritise employee safety and well-being. This involves taking necessary precautions to protect against hazards, occupational diseases, and machinery risks. Employers must adhere to government-issued safety rules, measures, and standards.

Specific obligations include maintaining a clean and hygienic workplace, displaying instructions on work safety in Arabic or other languages understood by employees, informing employees about job hazards, providing and training employees in the use of personal protective equipment, ensuring adequate lighting and water supply, taking fire safety precautions, providing first-aid facilities, arranging regular medical examinations for employees exposed to occupational diseases, offering preventive and therapeutic healthcare, and reporting occupational injuries and diseases.

Employers are prohibited from charging employees for occupational health and safety measures. They are also accountable for emergencies and accidents occurring to authorised individuals on the premises due to their negligence, with a duty to compensate for any resulting damage or harm.

Various additional requirements apply to high-risk workplaces. These workplaces involve the production, preparation, disposal, handling, use, or storage of certain quantities of hazardous substances. Hazardous substances refer to materials or mixtures that present a hazard due to their chemical, physical, or toxic properties. These rules focus on protection against major hazards, the duties of employers, arrangements for safeguarding the public and the environment, the rights and responsibilities of employees, and measures to prevent major accidents, minimise the risks, and mitigate their impacts.

To ensure employee safety, employers must inform workers of the hazards associated with their work before they begin their tasks. They must also provide the necessary personal protective equipment, train employees on its use, and enforce its use. Adequate lighting, potable and washing water, fire protection precautions, and functional safety exits are crucial. Employers must display detailed fire prevention instructions prominently in the workplace. First-aid cabinets with essential medications and supplies should be readily available. Employees exposed to occupational diseases require comprehensive medical examinations at least once a year, following official standards. Employers should also provide employees with preventive and therapeutic healthcare. Any occupational injuries and diseases must be reported promptly.

It's important to note that employers cannot charge employees or deduct any amount from their wages for providing protective occupational health and safety measures. Employers bear responsibility for emergencies and accidents that may affect individuals who enter the workplace due to official duties, with the employer's approval or that of its agents. If such emergencies and accidents result from the employer's negligence in taking the necessary technical precautions, compensation for the damage and harm suffered should be provided. 

An employee has the right to resign without giving notice in the presence of a serious workplace hazard that jeopardises their safety or health and when the employer is aware of it but fails to address the issue.

Moreover, employees are not obliged to comply with any instructions from the employer that might expose them to undue hazards.

In workplaces where a labour committee is established, the committee has the authority to provide suggestions to the employer regarding the enhancement of health and safety standards.

Employee benefits

Mandatory benefits

Statutory benefits in Saudi Arabia include a shortened workday of six hours for Muslim employees during the period of Ramadan, 21 paid leave days and leave for public holidays.

Supplementary benefits

To attract top talent to your business, it’s important to have a strong benefit management plan. It’s customary for employers in Saudi Arabia to offer the following supplementary benefits:

• Additional health insurance
• Transportation allowances
• Plane tickets to go home during annual leave
• Housing allowances
• Remuneration for educational training costs
• Work mobile phones
• Retirement plans

Types of leave available

Annual leave

Employers are required by law to provide 21 days of paid annual leave per year. Once an employee has worked for the company for five consecutive years, the leave must increase to 30 days.

All annual leave should be granted in full at the start of the year. However, employees will need to ask for permission before taking time off. All leave has to be taken in the year it was granted and employees are not allowed to forgo time off or receive any compensation in its place.

Sick leave

Employees whose illness is supported by appropriate medical documentation are entitled to up to 120 days of sick leave within a single year. The first 30 days are paid at full salary, the following 60 days are paid at 75% of salary, and the final 30 days are unpaid. Employers may not terminate an employee due to illness before the employee has exhausted their statutory sick leave entitlement.

Maternity and paternity leave

Following Labour Law amendments that took effect in February 2025, female employees are entitled to 12 weeks of fully paid maternity leave. At least six weeks must be taken immediately after childbirth, while the remaining six weeks may be used before or after delivery. Up to four weeks may be taken before the expected delivery date. Additional unpaid leave may be available in cases of delayed childbirth.

Female employees returning from maternity leave remain entitled to paid nursing breaks in accordance with the Labour Law.

Employers must provide medical coverage and benefits in accordance with applicable legal requirements and insurance obligations.

New fathers are entitled to three days of paid paternity leave. The leave must be taken within seven days of the child’s birth.

Under the new Social Insurance Law that came into force in July 2024, GOSI now funds maternity leave payments for insured female employees, both Saudi and non-Saudi, rather than the employer.

Eligibility requires at least 12 months of GOSI contributions within the 36 months preceding childbirth. GOSI funds up to three months of maternity compensation, extended by an additional month if the child is born with an illness or disability requiring continuous care.

Hajj leave

Employees who have not previously performed Hajj are entitled to paid Hajj leave of between 10 and 15 days, including the Eid al-Adha holiday period. To qualify, employees must have completed at least two consecutive years of service with their employer. Employers may determine how many employees are granted Hajj leave each year based on operational requirements.

Student leave

Employers must allow paid leave to all student workers on examination days on the condition that the employees are not repeating a school year. If a staff member does need to repeat a schooling year, they are entitled to unpaid leave on examination days.

Marriage leave

Employees are entitled to five days of paid leave upon marriage.

Bereavement leave

Employees are entitled to five days of paid leave upon the death of a spouse, parent, or child. Since the 2025 Labour Law amendments, employees are also entitled to three days of paid leave upon the death of a sibling.

A Muslim female employee whose husband dies is entitled to a paid leave period of four months and ten days (Iddah leave). A non-Muslim female employee is entitled to 15 days of paid leave upon the death of her husband.

Public holidays

Saudi Arabia observes the following statutory public holidays:

• Founding Day — 22 February (1 day)

• Eid al-Fitr — 4-day holiday period starting the day after 29 Ramadan

• Eid al-Adha — 4-day holiday period starting on Arafat Day (9 Dhul Hijjah)

• Saudi National Day — 23 September (1 day)

Flag Day is observed annually on 11 March but is not currently a statutory paid public holiday. Islamic holiday dates depend on moon-sighting confirmation and may shift by 1–2 days.

Attracting talent

Saudi Arabia remains one of the world’s largest economies and a member of the G20. Under Vision 2030, the Kingdom continues to diversify beyond oil through major investments in technology, manufacturing, tourism, logistics, renewable energy, healthcare, and advanced industries. Non-oil sectors now account for more than half of GDP, creating significant opportunities for employers seeking skilled local and international talent.

To differentiate your company from others in Saudi Arabia, consider building an employee benefit program that enables your employees to grow within their careers as well as achieve a good work-life balance.

Career development opportunities

Employees who are high performers often seek ways to learn new skills and will be attracted to companies that offer opportunities for career development. You could offer training, professional development plans or one-to-one mentoring programs.

No matter how you choose to build these opportunities into your benefits package, it’s important to focus on offering prospective employees a clear vision of their professional pathway and how they might grow within your organisation.

Introduce policies that promote a strong work-life balance

Work-life balance is an essential construct of the quality of work-life for employees. When work begins to interfere with home life, it can have a detrimental effect on both morale and productivity.

Where possible, companies should provide flexible working conditions that enable their employees to stabilise their work-life balance, whether that’s through flexible working hours or remote and hybrid work environments.

Hiring best practices

Hiring staff in Saudi Arabia is similar to hiring a new employee in your home country. However, there are a few differences to consider and adjust your practices accordingly:

Use the local language and currency

When hiring locally, it's important to provide communications in Arabic, especially contracts and offer letters. Additionally, express monetary amounts in Saudi riyals instead of your home country’s currency.

Leverage word-of-mouth

Many Saudi Arabian companies rely on personal recommendations to fill open positions. If you work with an employer of record, utilise your connections to recruit talented individuals and even passive candidates who might not be actively searching for a job. Online advertisements and social media job postings can also be effective if you have limited in-country personal connections.

Research your location

Saudi Arabia is administratively divided into 13 provinces (regions), though it is often described culturally by its four historical regions: Hejaz, Najd, Al-Ahsa (Eastern), and Asir (Southern).

Labour law and employment regulations apply uniformly across the Kingdom, but cultural customs, business practices, and local expectations can vary by region. It is advisable to understand the local business culture of your chosen city before finalising your hiring practices.

Prepare for a limited pool of Saudi national applicants

Due to the ongoing Saudisation strategy under Vision 2030, more than 2.5 million Saudis are now employed in the private sector, and unemployment among Saudi nationals has fallen to historic lows.

Under the Nitaqat 2026–2028 framework, the Kingdom is targeting an additional 340,000 Saudi private-sector jobs, meaning employers should expect a growing pool of qualified Saudi candidates.

However, many Saudi nationals still show a strong preference for the public sector, so expatriate candidates continue to make up a significant share of private-sector applicants.

Expect to hire in-country expats

Businesses have the option to sponsor work visas and work and residence permits, known as iqamas, for new expatriates. However, this process often involves substantial costs.

Alternatively, you may find it more convenient to recruit international employees who already possess valid work permits and visas.

Hiring remote employees

While hiring remote teams for international operations, it's important to consider a few best practices:

Prioritise building an appealing company

Remember that hiring is a two-way process. Just as you evaluate candidates, they are assessing your organisation. Ensure a supportive work culture and attractive benefits to attract talented individuals.

Look for long-term partners

Your new hires will not only be employees but also valuable partners and educators in cross-cultural norms. They can also facilitate new business partnerships. Use targeted questions during the hiring process to identify candidates who will contribute to long-term growth.

Aim for in-person interactions

Although remote interviewing and hiring might be necessary due to time and distance constraints, try to send higher-level executives to meet new employees during onboarding and training. This demonstrates your commitment and appreciation towards new hires.

Remember, keeping these best practices in mind will help you hire and retain the right local talent for your international operations.

The onboarding process for new hires

When onboarding new hires in Saudi Arabia, it is crucial to go beyond the basics. In addition to providing a tour of the office and introducing the team, the orientation should cover essential aspects such as company culture, values, and expectations. Since personal relationships hold great significance in Saudi Arabia, it is imperative that the onboarding process allows for ample interaction between the new employee and their colleagues.

Regarding paperwork, employers must provide employees with a written employment contract and ensure that the contract is properly authenticated through the Qiwa platform in accordance with Ministry of Human Resources and Social Development requirements.

Termination of employment

Notice periods

Under Saudi Arabia's Labor Law, there are two types of contracts: fixed-term contracts and indefinite (open) contracts. A fixed-term contract typically includes a predetermined notice period stated in the employment contract; if this is not the case, the contract will expire once it reaches the end of its term without notice.

Under the Labour Law amendments effective from February 2025, notice requirements for indefinite contracts differ depending on which party initiates termination. Employers must provide at least 60 days’ notice to employees paid on a monthly basis, while employees are generally required to provide 30 days’ notice when resigning. Different notice requirements may apply to employees who are not paid monthly.

Employees are entitled to resign due to misconduct by their employer without providing any notice under Article 81 of the Saudi Labor Law. Employers can also terminate a contract without notice if the termination is due to misconduct.

Probationary periods

Under current Saudi Labour Law, probationary periods may last for up to 180 days if specified in the employment contract. The parties may also agree in the contract to waive the probationary period entirely.

During probation, either party may terminate the employment relationship in accordance with the terms of the contract and applicable labour law provisions.

Severance pay

Employees in Saudi Arabia are entitled to End-of-Service awards following the below formula:

• 15 days of pay for each of the first five years of employment
• A full month of pay for each year of service after that

End-of-service benefits are calculated based on the employee’s final actual wage, including fixed allowances such as housing and transport allowances where applicable.

Employees who resign may be entitled to a reduced end-of-service award depending on their length of service, while employees terminated by the employer without lawful cause are generally entitled to the full statutory benefit.

Employers must also comply with statutory deadlines for settling end-of-service payments following termination.

What are my options for hiring?

If you’re looking to expand your business to Saudi Arabia, a company like Airswift can help you get started. We offer employment solutions designed to ensure you stay compliant across all local requirements, including tax, payroll, termination procedures and working hour obligations.

Our in-country teams have the expertise and knowledge necessary to save your organisation from unnecessary risk, freeing up your time to focus on the other prospects of international business growth.

Talent acquisition

Airswift can source and deliver the talent you need across a wide range of industries by leveraging our expertise and employee networks across Saudi Arabia, whether you want to hire contractors or permanent employees. 

Whether you want to hire for an urgent project, have remote hiring requirements or need to cover a staffing shortage, we are committed to finding a contractor to suit your needs. Our contract hire services are catered to organisations that need temporary hires to fulfil a range of requirements.

Finally, if you’re looking to hire employees that can grow with your company, we have professional search services that provide access to highly skilled job seekers who are ready for work. We also take care of all the administrative processes, from shortlisting candidates to screening and onboarding them.

Employer of record

We can help you hire employees without setting up a local entity. Working with an Employer of Record in Saudi Arabia allows you to get up and running in as little as 72 hours. Once your employee has been given the green light, we will take care of everything from onboarding and benefits management to tax filings and annual leave allowance.

*Although the information provided has been produced from sources believed to be reliable, no warranty, express or implied, is made regarding the accuracy, adequacy, completeness, legality or reliability of any information. For the latest information and specific queries regarding particular cases, please contact our team.