Saudi Labour Law: A Starter Guide for New Employers

New employers in Saudi Arabia must follow a clear set of registration and compliance steps before hiring their first worker, covering business registration, social insurance, electronic contracts, and Saudisation. Understanding the basics early helps avoid fines and delays for both companies and employees.

The process begins with registering the business and obtaining a Commercial Registration (CR) through the Ministry of Commerce, then registering the establishment with the national address service. After the CR is issued, employers open an employer file with GOSI and must register each worker within 15 days of starting work. They also create and verify an establishment account on قوى using the authorised person’s National ID or Iqama along with نفاذ authentication.

قوى is the main platform for documenting employment contracts, managing work permits, monitoring Saudisation status, and submitting labour requests. Contracts must state the parties, job, place of work, wage, payment date, duration, and other legally required terms. Keeping contracts documented electronically on قوى is essential, as GOSI registration alone may not meet current documentation requirements.

Payroll, insurance and Saudisation

Employers must register Saudi and non-Saudi workers with GOSI, maintain accurate payroll records, and submit monthly payroll data through the Wage Protection System. Wages must be paid on time via a compliant bank process. Occupational-injury insurance for non-Saudi workers is generally 2% of the contributory wage and is paid by the employer, while Saudi GOSI rates depend on the applicable pension rules and should be verified in the GOSI account before processing payroll. Nitaqat and Saudisation quotas vary by activity, establishment size, and current ministry decisions.

For non-Saudi staff, the employer bears recruitment costs, Iqama issuance and renewal fees, work-permit and profession-change fees, exit/re-entry visa fees, delay fines, and the return ticket at the end of employment. Permit and Iqama validity should be tracked through قوى and مقيم/أبشر. Government fees vary by nationality, classification, profession, Saudisation band, and transaction type, so confirm amounts shown in قوى, مقيم, أبشر, or GOSI before paying. If a dispute reaches the courts, employment-related services are handled through ناجز.

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