Hiring in Saudi Arabia

A foreign company can hire in Saudi Arabia through its own employing entity, a properly structured employer of record arrangement with a licensed local provider, or a genuine independent contractor engagement. Employees work under an employer's management or supervision; contractors deliver work without being subordinate to the client. 4dev.com is a global contractor platform working with contractors in Saudi Arabia.

Three ways to hire in Saudi Arabia

Who directs the work determines whether the relationship calls for employment or an independent service contract. For employment, check who can lawfully employ or supply the worker.

Route	Legal employer	What you pay on top of salary	How you end it
Your own entity	Your Saudi employing entity	Employer GOSI is 12.75% only for a Saudi worker in the new contribution cohort. The rate differs for existing-cohort Saudis and ordinary non-GCC non-Saudis; health insurance and, where relevant, work-permit, residence and recruitment costs are variable.	For an indefinite monthly-paid contract, 30–60 days means at least 30 days' written notice from the employee or 60 days from the employer. Fixed-term contracts need their own analysis.
Employer of record	A licensed Saudi labour-service provider retains the employment relationship.	Employment costs depend on the worker's profile and required coverage. Provider pricing is not a statutory amount and is not included here.	The client ends its service arrangement; the provider remains responsible for the employment relationship under the applicable documents.
Contractor	The contractor supplies an independent service rather than becoming the client's employee.	The service fee follows the contract. It is not an employee wage calculation and does not carry a quoted employer GOSI rate.	The service contract sets the exit terms; the employee notice rule does not set contractor terms.

The 12.75% employer rate applies to a Saudi entrant with no contribution period before 3 July 2024. It covers one payroll component; variable mandatory health insurance, relevant work authorisation and recruitment costs, future end-of-service liability, and any provider charges sit outside it.

A labour-supply arrangement needs more than a company registration: the provider needs a licence for the activity, and the beneficiary establishment must have the required commercial registration or activity licence. For each assigned non-Saudi worker, the arrangement needs a documented service contract, beneficiary acceptance and an individual Ajeer permit; the provider keeps the original employment obligations. A foreign company without a qualifying Saudi establishment cannot assume it can use the beneficiary route.

Saudi labour market: salary benchmarks and offer components

The national wage average and the software-engineer survey measure different groups. Use the role and population that match the hire.

Salary reference points

All paid employees across Saudi Arabia	SAR 5,795 / month — Q4 2025 average	Gulf Labour Markets and Migration
Saudi nationals	SAR 11,103 per month — Q4 2025 average	Gulf Labour Markets and Migration
Non-Saudis	SAR 4,131 per month — Q4 2025 average	Gulf Labour Markets and Migration
Saudi software engineer	SAR 25,000–35,000 per month; SAR 30,000 average — 2025 role survey	Robert Walters
Saudi senior software engineer	SAR 30,000–40,000 per month; SAR 35,000 average — 2025 role survey	Robert Walters

The first three rows are national Q4 2025 averages for paid employees, split by nationality; the last two are 2025 software-engineer role-survey figures. There is no comparable pay benchmark here for Riyadh, Jeddah or the Eastern Province, so the figures cannot support a city premium.

What goes into the offer

Set out basic pay and any cash housing allowance separately: together they form the contribution wage base in the new GOSI system. Employers also pay mandatory health-insurance premiums for employees and eligible dependants, including during probation. Transport and any bonus need their own contract terms; there is no mandated thirteenth or fourteenth monthly salary, and the available evidence does not support a standard allowance or bonus amount.

The survey does not split its role figures into basic pay, housing, insurance or other offer components. Its salary bands can inform an offer, but they do not establish a complete employee-cost budget.

Registering as an employer, step by step

Direct hiring requires an employing entity and employment records before work starts. If another company supplies personnel, check its licence and the assignment documents too.

Step	What happens	Takes
Establish the employing entity	A foreign company using the formation route applies through the Saudi Business Center on the basis of a Ministry of Investment investment licence.	Not verified
Check the labour-service route, if personnel will be supplied	Recruitment, placement and labour supply require an MHRSD licence. A provider's licence only covers its authorised activities, and an ordinary company registration does not replace it.	Not verified
Document the employment contract in Qiwa	Saudi and non-Saudi employment contracts are documented in Qiwa. Once documented, the contract data synchronise automatically with GOSI; a Saudi employee needs that electronic documentation to count in Nitaqat.	Electronic and immediate once the employer creates the request and the employee accepts; an unanswered request cancels after 10 days.
Obtain work authorisation for a non-Saudi employee	The worker needs an MHRSD work permit, a contract with an accountable employer, and a profession matching the permit.	Not verified
Arrange health coverage	The employer pays the mandatory health-insurance premium for the employee and eligible dependants.	Not verified

Check the provider and assignment records

For an Ajeer assignment between qualifying establishments, the beneficiary needs commercial registration or the required activity licence. Each non-Saudi assignment also needs a documented service contract, beneficiary acceptance and an individual permit. Check that the provider's licence covers labour supply: an ordinary company registration does not. The provider retains responsibility for the employment relationship; the service agreement does not transfer those obligations to the beneficiary.

Qiwa's confirmed service timing covers that step alone. Total hiring duration: not verified.

Hiring and onboarding: match the contract, occupation and permit

The work permit, contract and responsible legal employer must align before a non-Saudi employee starts.

Legal limits before the start date

A non-Saudi employee needs an MHRSD work permit and a contract with an employer that bears responsibility for them. The worker cannot be employed in a profession other than the one on that permit or work for another employer outside the legal procedures. The employment contract must be written and fixed term; where it does not state a duration, it is treated as one year from the actual start date and renews for an equivalent term if work continues.

Qiwa documentation is required for Saudi and non-Saudi employment contracts, and a Saudi employee counts in Nitaqat only after electronic documentation there. A licensed Ajeer provider arrangement is separate from direct hiring: it requires a qualifying beneficiary, documented service contract, acceptance and an individual permit for each assigned non-Saudi worker.

Onboarding checklist

Before the first day of work, confirm:

• the responsible legal employer and, where relevant, the provider's licence scope and the beneficiary's eligibility;
• the non-Saudi worker's permit, permitted profession and written fixed-term employment contract;
• Qiwa documentation and the employee's acceptance, including the Nitaqat counting condition for a Saudi worker;
• the worker's GOSI contribution history and the recorded contribution wage, including basic pay and cash housing allowance;
• mandatory health coverage for the employee and eligible dependants; and
• for a non-Saudi Ajeer assignment, the service contract, beneficiary acceptance and individual permit.

Minimum wage and the SAR 4,000 Nitaqat threshold

Saudi Arabia has No general minimum wage for private-sector employees; SAR 4,000 is a Nitaqat localisation-counting threshold for Saudi employees, not a general statutory wage floor.

How Nitaqat counting works

Saudi employee paid below SAR 3,000 monthly	Does not count in Nitaqat	MHRSD Decision 61706
Saudi employee paid exactly SAR 3,000 monthly	Counts as half a worker in Nitaqat	MHRSD Decision 61706
Saudi employee paid above SAR 3,000 and below SAR 4,000 monthly	Counts as half a worker in Nitaqat	MHRSD Decision 61706
Saudi employee paid SAR 4,000 or more monthly	Counts as one worker in Nitaqat	MHRSD Nitaqat guidance
Saudi employment contract	Must be documented electronically in Qiwa for the employee to count in Nitaqat	MHRSD Qiwa documentation notice

Nitaqat counts Saudi nationals; it sets no pay rule for non-Saudis, contractors or service fees. A company's Nitaqat status can affect access to available visa quotas and work-permit renewals for foreign workers, so the counting rule can affect hiring capacity.

Taxes and contributions: the worker's GOSI history matters

The income-tax rate is 0% on employment income. Employer GOSI contributions depend on the worker's nationality and contribution history.

Which GOSI branch applies?

Worker profile	Employer GOSI	Current components
Saudi employee in the new contribution cohort	12.75%	10% pension, 2% occupational hazards and 0.75% SANED
Saudi employee outside the new contribution cohort	11.75%	9% pension, 2% occupational hazards and 0.75% SANED
Ordinary non-GCC non-Saudi employee outside a reciprocal regime	2%	Occupational hazards only

The new cohort covers entrants with no pension or social-insurance contribution period before 3 July 2024. Its 12.75% employer rate includes the current 10% pension component. That component is scheduled to rise to 10.5% on 1 July 2027 and 11% on 1 July 2028; use the rate for the worker's cohort and the relevant period.

The contribution wage includes basic pay and cash housing allowance and is capped at SAR 45,000 per month under the new system. Apply the worker's branch to that contribution wage, rather than to an undifferentiated compensation package.

What an employee actually costs you

At the same assumed SAR 5,795 monthly basic-plus-housing wage, employer GOSI differs by worker profile. The figure comes from the national all-worker average and serves only as an illustration; the comparison does not represent observed wages by nationality or complete employment budgets.

Profile in the illustration	Gross monthly	Employer GOSI	Gross plus GOSI monthly	Gross plus GOSI annual
New-cohort Saudi	SAR 5,795.00	SAR 738.86	SAR 6,533.86	SAR 78,406.32
Existing-cohort Saudi	SAR 5,795.00	SAR 680.91	SAR 6,475.91	SAR 77,710.92
Ordinary non-GCC non-Saudi	SAR 5,795.00	SAR 115.90	SAR 5,910.90	SAR 70,930.80

The senior-software-engineer illustration uses a different wage and worker profile. It is separate from the same-wage comparison above.

Separate role illustration	Gross monthly	Employer GOSI	Gross plus GOSI monthly	Gross plus GOSI annual
Senior software engineer — ordinary non-GCC non-Saudi	SAR 35,000.00	SAR 700.00	SAR 35,700.00	SAR 428,400.00

All four results are payroll subtotals. They exclude variable mandatory health insurance, relevant work-permit, residence and recruitment charges, future end-of-service liability, and any optional benefit or provider cost.

Working time and overtime, including Ramadan

Ordinary work is capped at eight actual hours a day or 48 hours a week, with shorter limits for Muslim workers during Ramadan.

The statutory limits

Ordinary work	Eight actual hours a day where the daily measure is used, or 48 hours a week where the weekly measure is used	MHRSD working conditions
Muslim workers during Ramadan	Six actual hours a day or 36 hours a week	MHRSD working conditions
Overtime	Hourly wage plus 50% of the basic hourly wage	MHRSD working conditions
Compensatory leave	Paid leave can replace cash overtime only with the employee's consent	MHRSD working conditions

The shorter Ramadan limit applies to Muslim workers. For overtime, add 50% of the basic hourly wage to the hourly wage; applying a single multiplier to all pay would change the calculation. Paid compensatory leave requires the employee's consent.

Leave, sick pay and parental leave

Annual leave is 21–30 days, depending on service. Public holidays, sickness and family leave follow separate rules.

Annual leave and public holidays

Annual leave	21–30 days — at least 21 paid days a year, increasing to at least 30 after five continuous years with the employer	MHRSD working conditions
Public holidays	10 baseline days: four Eid al-Fitr days, four Eid al-Adha days, one National Day and one Founding Day	MHRSD holidays and leaves; MHRSD Founding Day 2026 notice
Eid al-Fitr	Four days, starting on the day after 29 Ramadan under the Umm al-Qura calendar	MHRSD holidays and leaves
Eid al-Adha	Four days, starting on Arafat Day	MHRSD holidays and leaves
Founding Day	One day; in 2026, the private-sector holiday fell on 22 February	MHRSD Founding Day 2026 notice

The Eid dates follow the relevant calendar, so the 10-day baseline describes the statutory components rather than a fixed set of Gregorian dates each year.

Sick and family leave

Certified sickness within one leave year	First 30 days at full pay; next 60 days at three-quarters pay; then 30 days unpaid	MHRSD Labour Law, Article 117
Maternity leave	12 weeks at full pay; the six weeks after birth are mandatory	MHRSD Article 151
Birth of a child	Three fully paid days, taken within seven days of the birth	MHRSD working conditions

The sick-leave sequence applies within one leave year when sickness is established. The middle 60 days are paid at three-quarters of wage; the first 30 days are paid in full.

Termination: whose notice, which contract, which award?

For an indefinite monthly-paid contract ended for a valid reason, notice depends on who ends it; the end-of-service award follows a separate calculation.

Notice for an indefinite monthly-paid contract

Ending party	Minimum written notice	When this rule applies
Employee	30 days	Employee ends an indefinite monthly-paid contract for a valid reason
Employer	60 days	Employer ends an indefinite monthly-paid contract for a valid reason

This is the 30–60 days rule for that contract type and pay cycle. It is not a general notice rule for every fixed-term contract, so the fixed-term agreement and the reason for ending it need separate review.

Probation and the end-of-service award

Probation applies only when the contract says so expressly and can last up to 180 days in total; either party may end the contract during that period. That route is separate from the notice table above.

The end-of-service award accrues at half a month's last wage for each of the first five years of service and one month's wage for each subsequent year, including proportional fractions of a year. On resignation, the award is one-third after two to five years of service, two-thirds after more than five but fewer than ten years, and full after ten years. Notice, the reason for ending the contract and the award calculation are separate questions; do not treat the full accrual formula as every resignation payout.

Recent changes to Saudi hiring rules

• 19 February 2025 — Labour Law amendments took effect. For hiring documents, reflect the 12-week paid maternity entitlement and the written fixed-term rule for non-Saudi employees, including the default one-year term where the duration is omitted.
• 25 January 2026 — Ajeer service outsourcing rules took effect. For a non-Saudi assignment between establishments, check the provider's licence, the beneficiary's qualifying establishment status, the documented service contract and the individual permit rather than relying on a general company registration.
• 15 April 2026 — Qiwa documentation became a Nitaqat counting condition for Saudi employees. Build electronic contract documentation and employee acceptance into the onboarding sequence before relying on the worker in a localisation calculation.
• 30 June 2026 — Engineering-professions localisation enforcement began. Check whether the proposed occupation is covered by the applicable procedural guidance before making an engineering hire or workforce plan.
• 1 July 2026 — New-cohort Saudi pension contributions reached 10% for each side. Use the worker's contribution history to identify the applicable GOSI branch. The new-cohort pension rate is scheduled to rise to 10.5% on 1 July 2027 and 11% on 1 July 2028, so distinguish scheduled rates from the current rate.

What a mistake costs and who pays

An uninsured employee, unlicensed labour supply and a missing work permit create different exposures for different parties.

Party	Risk	Amount
Employer	Failing to insure a covered employee and eligible dependants	Unpaid premiums, plus a fine of up to the annual premium for each individual; recruitment restrictions may also apply
Unlicensed recruitment or labour-service provider	Carrying on recruitment or labour supply without the required licence	SAR 200,000–500,000 under Article 229 bis
Unlicensed recruitment or labour-service provider	Repeated breach under the separate 2026 enforcement notice	SAR 200,000 first violation, SAR 220,000 second, SAR 250,000 third
Accountable employer or provider	A non-Saudi worker lacks the required permit, works in the wrong profession, or works for another employer outside legal procedures	Amount not verified
Provider and beneficiary in an Ajeer arrangement	The beneficiary does not qualify, the assignment lacks the required contract, acceptance or individual permit, or the parties treat beneficiary use as a transfer of the provider's employment obligations	Amount not verified
Employer	End-of-service award when due	Half a month's last wage for each of the first five service years, then one month's wage for each later year, subject to the applicable resignation rules

Payroll errors and worker classification require separate checks. The GOSI branch must match contribution history and nationality; applying the new-cohort Saudi rate to everyone produces the wrong subtotal. A contractor must provide work without subordination to the client; employer-like management or supervision calls for an employment route. The statutory fine for unlicensed labour supply addresses a different breach.

Questions people actually ask

Is SAR 4,000 the minimum wage in Saudi Arabia?

No. Saudi Arabia has no general statutory minimum wage for private-sector employees; SAR 4,000 is the monthly level at which a Saudi employee counts as one worker for Nitaqat, rather than a universal pay floor. Nitaqat is a localisation-counting system, and a Saudi employment contract also needs electronic Qiwa documentation for that count.

Can a foreign company hire without a Saudi entity?

It cannot simply put a non-Saudi worker in Saudi Arabia on a foreign payroll: the worker needs an MHRSD work permit and a contract with an employer that bears responsibility for them. A properly structured employer of record arrangement uses a licensed local provider; an Ajeer labour-supply route also requires a qualifying beneficiary establishment, a documented service contract, acceptance and an individual permit for each assigned non-Saudi worker.

How much does it cost to hire an employee?

At an assumed SAR 5,795 monthly basic-plus-housing wage, employer GOSI is SAR 738.86 for a new-cohort Saudi, SAR 680.91 for an existing-cohort Saudi and SAR 115.90 for an ordinary non-GCC non-Saudi. Those produce monthly payroll subtotals of SAR 6,533.86, SAR 6,475.91 and SAR 5,910.90 respectively; they exclude variable mandatory health insurance, applicable work-permit, residence and recruitment costs, and future end-of-service liability.

How can a foreign worker get hired in Saudi Arabia?

The employment route needs an MHRSD work permit, a responsible employer and a written fixed-term contract. The worker must work in the profession shown on the permit and cannot work for another employer outside the legal procedures; the employer bears the relevant recruitment, residence and work-permit costs and renewals, subject to the stated statutory exceptions.

What are standard working hours in Saudi Arabia?

Ordinary work is limited to eight actual hours a day or 48 hours a week, depending on which measure the employer uses. For Muslim workers during Ramadan, the limit is six actual hours a day or 36 hours a week. Overtime pays the hourly wage plus 50% of the basic hourly wage, unless the employee agrees to paid compensatory leave.

Can I resign during a contract?

For an indefinite monthly-paid contract ended for a valid reason, an employee gives at least 30 days' written notice; an employer gives at least 60 days. A fixed-term contract requires its own review. Where the employee resigns, the end-of-service award is one-third after two to five years, two-thirds after more than five but fewer than ten years, and full after ten years.

When is an independent-contractor route appropriate?

It fits a genuine independent service relationship: the contractor delivers work without being subordinate to or acting as agent for the client. Where the client manages or supervises the worker as an employer, use an employment route rather than calling the arrangement a contractor engagement; the Saudi Arabia contractor guide explains that distinction in more detail.

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