Saudi Arabia Employment Guide 2026 — Labour Law

Saudi Arabia continues to transform its economy under Vision 2030, creating new opportunities for employers and workers across construction, technology, healthcare, finance, tourism, retail, and other industries. Understanding Saudi labor law is essential for businesses hiring employees and for professionals planning their careers in the Kingdom. This guide explains key Saudi Arabia employment rules for 2026, including contracts, working hours, leave, Saudization, payroll, GOSI, termination, and end-of-service benefits.

Why Hire in Saudi Arabia

Saudi Arabia remains a major destination for investment and employment, with Vision 2030 driving growth in infrastructure, tourism, technology, manufacturing, healthcare, finance, and other sectors. This expansion is creating more opportunities for skilled professionals across established and emerging industries.

The growth of the private sector also makes understanding Saudi Arabia labor law important for employers and employees. Saudi Arabia is also digitizing employment services through platforms such as Qiwa and Mudad, helping businesses manage employment contracts, payroll software, wage protection, and other HR processes more efficiently.

Business Setup

Foreign companies can establish a presence in Saudi Arabia subject to applicable investment, licensing, ownership, and company laws. Businesses planning to hire in Saudi Arabia should complete the required registrations before hiring.

Hiring & Saudization (Nitaqat)

The Nitaqat program requires eligible private-sector establishments to meet applicable Saudization requirements. Classification depends on factors such as business activity, workforce size, and the relevant Nitaqat rules.

Establishments can fall into classifications such as Platinum, High Green, Low Green, Yellow or Red. The exact Saudization percentage is not one universal figure for every employer.

Employers should follow the applicable Nitaqat rules for their activity and establishment rather than applying one universal Saudization percentage. This is especially important for recruitment companies in Saudi Arabia, where workforce composition and activity classification can affect compliance.

Expat work visas: Expatriate workers generally need appropriate work authorization and residence documentation, with requirements varying by individual circumstances. Professionals considering online jobs in Saudi Arabia should also ensure their work arrangement complies with applicable employment, immigration, and contractual requirements.

Employment Contracts

Employment contracts are an important part of Saudi Arabia employment law. Employers must document employment relationships under applicable Labor Law requirements, with Qiwa providing the electronic platform for contract documentation.

Key requirements include:

• Contracts should specify the employer, employee, wage, benefits, job, workplace, start date, duration where applicable, and rights and obligations.
• Probation must be stated in the contract and is generally up to 90 days, extendable to 180 days where legally permitted.
• Fixed-term and indefinite contracts are recognized, with specific rules applying to non-Saudi workers under Article 37.
• Contract amendments should be properly documented through Qiwa.

Employers should not rely on an unsupported 90-day registration rule. They should follow current Qiwa requirements and keep employee, wage, and contract information accurate. In 2026, Qiwa documentation became particularly important because electronically documented Saudi contracts are linked to Nitaqat calculations, making accurate records essential for Saudi labor law compliance.

Leave & Benefits

Annual Leave

Employees are entitled to at least 21 days of fully paid annual leave for each year of service. This increases to at least 30 days after five consecutive years of service with the employer.

Employers should maintain accurate leave records and settle accrued unused leave when the employment relationship ends, in accordance with applicable rules. This is an important part of managing Saudi Arabia employment law compliance.

Sick Leave

Eligible employees can receive up to 120 days of sick leave during the applicable one-year period:

• First 30 days: full pay
• Next 60 days: 75% of pay
• Final 30 days: unpaid

Employers should maintain medical and leave records in accordance with the applicable requirements.

Maternity Leave

Under current Saudi labor law, working women are entitled to 12 weeks of fully paid maternity leave, including six mandatory weeks after childbirth. The remaining six weeks may be taken according to statutory rules, including up to four weeks before the expected delivery date.

Additional leave may be available in certain cases involving a sick child or a child with special needs, subject to applicable requirements.

Childbirth Leave

A worker is entitled to three days of fully paid leave for the birth of a child, subject to the applicable timing requirements.

Hajj Leave

A worker may receive 10 to 15 days of paid leave, including Eid Al-Adha leave, to perform Hajj once during their service if they have not performed Hajj previously and have completed at least two consecutive years with the employer.

The entitlement should not be described as paid only for Saudi nationals and unpaid for expatriates. The statutory provision applies to eligible workers according to the relevant conditions.

Bereavement and Other Family Leave

Under current Saudi labor law, employees generally receive 5 days of paid leave for marriage or the death of a spouse, ascendant, or descendant. They may also receive 3 days for the birth of a child or the death of a sibling. Additional rules apply in certain cases involving the death of a husband.

Working Hours

Under Saudi Arabia labor law, standard working hours are generally 8 hours per day or 48 hours per week, reduced to 6 hours per day or 36 hours per week for Muslim employees during Ramadan. Friday is generally the weekly rest day, subject to permitted exceptions.

Overtime is generally paid at the hourly wage plus 50% of the basic hourly wage. Employees using job portals in Saudi Arabia can use these rules to understand working arrangements better when comparing employment opportunities.

Payroll & GOSI

Saudi Arabia's Wage Protection System requires employers to comply with electronic salary payment and reporting requirements, with Mudad supporting payroll and WPS processes. Employers should ensure that salary payments, contracts, and payroll records are accurate and compliant with applicable Saudi labor law requirements.

GOSI Contributions

GOSI contributions depend on the employee's nationality and, for Saudi nationals, the applicable social insurance system and registration date.

For 2026, employers need to distinguish between employees covered by the previous system and eligible Saudi employees covered by the new Social Insurance Law with phased contribution increases.

The new Social Insurance system applies to eligible new entrants with phased annuity increases. From 1 July 2026, the Annuities contribution is 10% for both employee and employer; including SANED and Occupational Hazards, total contributions are 10.75% for employees and 12.75% for employers. Under the previous system, Saudi employees generally contribute 9.75%, while employers contribute 11.75%. For non-Saudi employees, employers generally pay 2% for Occupational Hazards.

GOSI contributions are based on the applicable contributory wage and employee category, so employers should verify the registered wage and applicable rules rather than assume allowances. Companies managing Saudi Arabia labor law payroll requirements should review GOSI calculations whenever salary, employment status, or insurance coverage changes.

Termination & End-of-Service Benefits (EOSB)

Saudi Labor Law provides statutory rules governing termination and end-of-service benefits. Calculating EOSB is particularly important because the amount depends on the employee's length of service and, in resignation cases, the circumstances under which the employment relationship ends.

Under Article 84, the standard EOSB is calculated as:

• Half a month's wage for each of the first five years of service
• One month's wage for each subsequent year
• Fractions of a year are calculated proportionately.
• The employee's last wage is the basis for calculation.

This is the foundation of Saudi labor law for end-of-service benefits.

The key point is that the resignation percentages apply to the Article 84 award. They should not be written as “1/3 month per year” or “2/3 month per year.” HRSD confirms that Article 84 provides half a month's wage for each of the first five years and one month's wage for each following year, while Article 85 applies the resignation percentages to that award.

For example, an employee with eight years of service would first receive an Article 84 calculation based on:

• Half a month's wage × first five years
• One month's wage × remaining three years

If the employee resigns after more than five but less than ten years, the employee would then receive two-thirds of that Article 84 award.

Article 87 also provides full EOSB in specified circumstances, including leaving work because of force majeure and qualifying cases where a female employee ends the contract within six months of marriage or three months of childbirth.

Employers should therefore calculate EOSB based on the actual termination circumstances rather than applying a single formula to every employee.

Notice Periods (KSA Labor Law)

Notice requirements under KSA End Of Service depend on the contract, salary-payment method, and party ending the employment:

• Indefinite contract, monthly salary: Employee — 30 days' written notice; Employer — 60 days' written notice.
• Indefinite contract, non-monthly salary: Generally, 30 days' written notice.
• Fixed-term contract: Usually ends on the agreed expiry date; early termination and compensation depend on applicable law and circumstances.
• Probation: Termination is permitted during a valid probation period subject to statutory conditions.
• Immediate dismissal: Article 80 permits dismissal without notice or compensation in specified circumstances.

If the required notice is not provided, compensation may apply for the notice period. For unlawful termination, Article 77 provides separate compensation rules, generally 15 days' wages per year for an indefinite contract or wages for the remaining term of a fixed-term contract, subject to the statutory minimum. These rules are important when understanding Saudi Arabia employment law, as termination compensation and EOSB are separate matters.

Compliance Checklist

Employers should regularly review the following areas to support compliance with Saudi labor law:

• Employment contracts are properly documented through Qiwa.
• Applicable 2026 Qiwa documentation requirements are met.
• Saudi employees' documented contracts are correctly reflected for Nitaqat calculations.
• GOSI registration and contributions are correctly calculated.
• Payroll and salary transfers comply with Mudad/WPS requirements.
• Applicable Saudization/Nitaqat targets are monitored.
• Expatriate work permits and residence documents remain valid.
• Leave and attendance records are maintained accurately.
• Working hours and Ramadan rules are correctly applied.
• Overtime is calculated using the statutory formula.
• EOSB is calculated under Articles 84, 85 and 87, where applicable.
• Correct notice periods are applied.
• Final wages and employment entitlements are settled within the statutory timeframe.

Under Article 88, employers generally must settle an employee's wages and entitlements within one week when the employer ends the employment relationship, or within two weeks when the employee terminates it. For businesses and workers in Saudi Arabia, following these requirements helps reduce compliance risks and supports clearer employment practices.