Saudi Labour Law Basics Every New Employer Must Know

New employers entering Saudi Arabia's private sector must follow a set of core labour rules that govern hiring, contracts, fees and worker protections. From documenting jobs digitally to paying salaries through approved channels, the framework has tightened further with updates taking effect in 2026.

All employment contracts must now be digitally documented through قوى, which employers also use for hiring, issuing contracts and processing expatriate transfers. Establishments were required to reach 90% contract documentation by 30 June 2026, and from 15 April 2026 only Qiwa-documented Saudi contracts count toward Saudization scoring.

Fees and payments to plan for

The expatriate work permit levy is either SAR 700 or SAR 800 depending on the establishment's Nitaqat balance — an annual total of SAR 8,400 or SAR 9,600. Work permit issuance or renewal costs SAR 650 while a domestic worker iqama renewal is SAR 600. Sponsorship transfer fees, paid by the new employer, rise with each move: SAR 2,000 for the first transfer, SAR 4,000 for the second, and SAR 6,000 for the third and beyond.

Salaries must be processed through the Wage Protection System via Mudad, and every worker must be registered with GOSI for social insurance. Standard working time is 8 hours a day or 48 hours a week.

Worker rights and mandatory transfers

Employers cannot force workers to hand over passports or iqamas, as withholding these documents is prohibited. In certain cases, a worker may transfer through Qiwa without the current employer's consent — including when salary is unpaid for three months, the employer fails to renew an iqama, the contract is breached, the establishment is in the Red Nitaqat band, or a fixed-term contract expires.

Employers should also note that the Ministry of Human Resources and Social Development issued an updated table of labour-law violations and penalties, effective 25 February 2026. Understanding these basics helps new businesses stay compliant and protects both employers and workers across the Kingdom.

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