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Saudi Arabia Hiring Guide

Hire compliantly in Saudi Arabia. Navigate GOSI contributions, mandatory Saudization quotas and a labor market where hiring expats and nationals follow fundamentally different rules.

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Capital

Riyadh

Language

Arabic

Average Salary

SAR 10,000

Payroll Cycle

Monthly

Employer Cost

2-12%

Paid Leave

21-30 days

Public Holidays

10-12 days

Tax Rates

No tax

Saudi Arabia Guides

Hiring guides covering regulations, contributions and costs specific to Saudi Arabia. Updated for 2026.

Minimum Wage in Saudi Arabia 2026: What Employers Pay

Saudi Arabia does not have a universal minimum wage. The SAR 4,000/month threshold applies only to Saudi nationals counted toward Saudization (Nitaqat) quotas, while foreign workers have no statutory minimum. This guide covers the full picture: Nitaqat salary rules, sector-specific minimums, GOSI contributions, the Wage Protection System, working hours, end-of-service gratuity, and what it means for companies hiring through an EOR.

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Best Employer of Record in Saudi Arabia

Saudi Arabia runs two parallel GOSI contribution systems since July 2024: one for existing subscribers and one for new labor market entrants. A provider applying a single rate to all employees will miscalculate contributions for one group or the other.

Our assessment of providers in Saudi Arabia evaluates Saudization compliance, GOSI accuracy, WPS integration and Qiwa contract registration.

Best EORs in Saudi Arabia

Before You Hire in Saudi Arabia

No personal income tax exists, but GOSI contributions differ by nationality. Saudi employees: employer pays 12%, employee pays 9.75% (pension 9% + SANED unemployment 0.75%). Expat employees: employer pays only 2% for occupational hazards. The employee pays nothing.
GOSI contribution rates are increasing annually for new entrants. Employees who entered the workforce after July 3, 2024 fall under a new system where employer and employee rates increase by 0.5% each year until 2028. In 2026, the new-system rate is 9.5% each (up from 9%).
Saudization (Nitaqat) quotas are enforced and non-negotiable. Every company must maintain a minimum percentage of Saudi nationals, determined by sector and company size. Falling below your quota blocks work visa issuance, contract renewals and access to government services.
All salaries must be paid through the Wage Protection System (WPS). Mudad enforces electronic salary transfers. Every payment is tracked. Late or missing salary payments trigger automatic alerts to MHRSD and can result in sanctions within days.
End-of-service gratuity is a significant deferred cost. Half a month’s salary per year for the first 5 years, then one full month per year thereafter. Women who resign within 3 months of childbirth or 6 months of marriage receive full gratuity regardless of tenure.

Why hire in Saudi Arabia

No income tax means gross equals take-home

No income tax, no employee social security for expats. A SAR 15,000 offer puts SAR 15,000 in an expat's bank account. For Saudi nationals, the 9.75% GOSI deduction is the only reduction.

Vision 2030 is building new sectors from scratch

NEOM, Red Sea tourism, the entertainment authority, the sports investment fund. Saudi Arabia is hiring internationally to staff industries that didn't exist 5 years ago. The demand is structurally driven, not cyclical.

Expat employment costs are among the lowest globally

For non-Saudi employees, the only mandatory costs are 2% GOSI for occupational hazards plus health insurance (~SAR 2,000-4,000/year). Total employer cost runs 4-6% above gross salary.

The Wage Protection System eliminates payment uncertainty

WPS via Mudad means every salary is electronically tracked and verifiable. For employees, it guarantees payment. For employers, it creates a compliance trail that protects against disputes. The system is strict but it removes ambiguity from the employer-employee relationship.

Key Employment Facts

Saudi Arabia has no personal income tax, which makes gross salary equal to near-net salary for employees, but employer costs vary dramatically between Saudi and expat hires.

Key Employment Facts
Minimum Wage (Saudi nationals)	SAR 4,000/month (private sector Saudization roles)
Probation Period	90 days (extendable to 180 by written agreement)
Standard Working Hours	48 hours/week (8 hours/day), 36 during Ramadan
Paid Annual Leave	21 days (30 days after 5 years)
Notice Period	60 days (indefinite contracts), 30 days (fixed-term)
13th Salary	Not statutory
Sick Leave	30 days full pay, 60 days at 75%, 30 days unpaid per year
Maternity Leave	10 weeks at full pay (employer-funded)

Good to Know: Working hours reduce from 8 to 6 hours per day during Ramadan for Muslim employees. This is mandatory and non-negotiable. Overtime during Ramadan is calculated on the reduced schedule. If your workforce includes both Muslim and non-Muslim employees, you need to manage two different schedules during the holy month.

What to Watch When Hiring in Saudi Arabia

Two parallel GOSI systems now coexist

Employees with contributions before July 3, 2024 stay on the old system (9% employer + 9% employee for annuities). New entrants fall under the new Social Insurance Law with rates starting at 9.5% in 2025 and increasing 0.5% annually to 11% by 2028. Your payroll must track which system applies per employee.

Saudization quotas block visas when you fall short

Nitaqat classifies companies into color bands (Platinum, Green, Yellow, Red) based on their Saudi national ratio. Red-band companies cannot issue new work visas, renew existing ones or access MHRSD services. A single expat hire that drops you below threshold can freeze your entire operation.

Health insurance is mandatory and employer-funded for expats

Under CCHI regulations, employers must provide health insurance covering the expat employee and their dependents. This is separate from GOSI and represents an additional per-employee cost of SAR 2,000-4,000+ annually depending on coverage level and family size.

End-of-service gratuity accrues from day one with no funding requirement

Unlike pension systems where contributions are paid monthly, ESG in Saudi Arabia is an unfunded liability that hits the employer's cash flow at termination. A 10-year employee earning SAR 15,000/month accrues approximately SAR 112,500 in gratuity. There is no monthly provisioning mechanism unless you set one up yourself.

Employer Costs and Employee Taxes in Saudi Arabia

Saudi Arabia's employer cost structure splits sharply between Saudi and expat employees. No income tax exists for either, but GOSI, insurance and Saudization fees create materially different cost profiles.

Employer Contributions (Saudi Arabia)
Employee Type	Contribution	Employer Rate
Saudi Employees	GOSI Annuities (pension)	9% (old system) / 9.5% (new system, 2025–26)
	GOSI Occupational Hazards	2%
	SANED (Unemployment, employer share)	1%
	Health Insurance (CCHI)	~SAR 2,000–4,000/year
	Total Employer Cost	~12–12.5% + insurance
Expat Employees	GOSI Occupational Hazards	2%
	Health Insurance (CCHI, employee + dependents)	~SAR 3,000–8,000/year
	Expatriate Levy (Nitaqat dependent)	SAR 400–800/month
	Total Employer Cost	~4–6% + insurance + levy

Employee Deductions
Deduction	Employee Rate
Income Tax	0% (no personal income tax)
GOSI Pension (Saudi, old system)	9%
GOSI Pension (Saudi, new system)	9.5% (2025-26, rising to 11%)
SANED Unemployment (Saudi)	0.75%
GOSI (Expat)	0%

Good to Know: The cost gap between hiring a Saudi national and an expat is significant but misleading if you ignore Saudization. A Saudi employee at SAR 10,000/month costs roughly SAR 11,200 in GOSI plus insurance. An expat at SAR 10,000 costs roughly SAR 10,600 in GOSI and insurance, but add the expatriate levy (SAR 400-800/month) and mandatory dependent health cover, and the gap narrows. Factor in that falling below your Saudization quota can freeze all visa processing, and the “cheaper expat” calculation often reverses.

Public Holidays in Saudi Arabia (2026)

Saudi Arabia observes approximately 10-12 paid public holiday days per year. The two Eid holidays follow the Hijri calendar and exact dates are confirmed by royal decree based on moon sighting.

Date	Holiday
February 22	Founding Day
March 19-22	Eid al-Fitr (confirmed, 4 days)
May 27-30	Eid al-Adha (approximate, 4 days)
September 23	Saudi National Day

Good to Know: Eid al-Fitr and Eid al-Adha are each typically 4 days, but the government frequently extends them to create longer breaks. Exact dates are announced shortly before each holiday based on lunar observation. Saudi National Day (September 23) and Founding Day (February 22) are fixed calendar dates. If a holiday falls on a weekend (Friday-Saturday), it is extended to the nearest working day. During Eid periods, most government services and many private businesses close entirely, which affects contract processing, visa issuance and banking.

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