A practical guide for employers — covering work permits, Saudisation quotas, employment contracts, benefits mandated by law, and end-of-service entitlements.
Saudi Arabia's Labour Law (Royal Decree M/51) governs all employment relationships. The Ministry of Human Resources and Social Development (MHRSD) and the Qiwa digital platform are your primary touchpoints for compliance.
All employment contracts must be in writing, registered on the Qiwa platform, and available in Arabic. Bilingual contracts are accepted. Key required clauses:
Every private sector company must employ a minimum percentage of Saudi nationals. The required percentage varies by industry and company size. Companies are classified into zones:
To hire an expatriate, the employer must hold a valid work permit (block visa quota) from the Ministry of Human Resources. Steps:
Saudi Labour Law mandates end-of-service gratuity paid to all employees (Saudi and expat) who complete 2+ years of service. Calculated on final basic salary only (housing, transport, and all allowances excluded):
Resignation payout fractions (Article 84): The full calculated EOSG above is subject to reduction on resignation:
Beyond salary, Saudi law requires employers to provide:
Dismissal without cause requires compensation. Saudi Labour Law protections:
Saudi Arabia's Wage Protection System (WPS) is a mandatory electronic salary monitoring system. All private sector employers must pay salaries through WPS-approved channels.
WPS requires salaries to be paid directly to employees' Saudi bank accounts — cash salary payments do not count as WPS-compliant. The system automatically monitors payment dates; delays trigger MHRSD notifications and can result in a ban on new work permits.
Payroll deadlines: salaries must be paid within 7 days of the due date specified in the employment contract. Monthly payroll is standard; bi-monthly is less common but permitted.
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The information on this page is drawn from official Saudi government bodies and regulatory authorities. Regulations change frequently — verify current requirements directly with the relevant authority before making any legal, financial, or business decisions.