At a Glance: Saudi Labor Law 2026
Saudi Arabia’s labor law, formally issued under Royal Decree M/51, governs all employment relationships in the Kingdom. The most recent amendments, passed in 2024 and enforced from 2025 onward, affect 38 articles of the law, delete 7, and introduce 2 new ones. Key facts for 2026:
- Minimum age: 21 for males, 22 for females. Individuals under 15 cannot enter a workplace.
- Working hours: 8 hours per day, 48 per week. Reduced to 6 hours per day during Ramadan.
- Maternity leave: Extended from 10 weeks to 14 weeks.
- Probation period: Up to 180 days (previously 90 days).
- Termination notice (fixed contract): 30 days from the employee, 60 days from the employer.
- End-of-service: Half a month’s salary per year for the first 5 years, then one full month per year.
- Saudization (Nitaqat): Businesses with over 100 employees must maintain at least 30% Saudi nationals.
- Digital contracts: All employment contracts must now be registered electronically via the Qiwa platform.
- Wage Protection: Employers must comply with the Wage Protection System (WPS) for timely monthly salary payments.
- Expatriate contracts: If no duration is specified, the contract defaults to 1 year from the start date, with automatic annual renewal.
The labor laws of the Kingdom of Saudi Arabia (KSA) set out the rules and regulations that govern every employment relationship within the country. Originally issued by Royal Decree M/51 in September 2005, the law has been amended multiple times, with the most significant recent changes arriving in 2024.
These amendments support Saudi Arabia’s Vision 2030 by modernizing the labor market, strengthening worker protections, and expanding the use of digital HR infrastructure. For both employers and employees operating in KSA, understanding these changes is no longer optional — non-compliance carries financial penalties and can result in the non-renewal of work permits.
This guide covers everything you need to know about Saudi labor law in 2026: what has changed, what remains the same, and what it means for your business or career.
What Is New in Saudi Labor Law in 2026
Beyond the 2024 amendments to the core labor law, 2026 has brought additional enforcement measures and sector-specific updates:
1. Digital Employment Contracts via Qiwa
All employment contracts in Saudi Arabia must now be digitally documented through the Qiwa platform, the Ministry of Human Resources and Social Development’s (MHRSD) official digital portal. Contracts not registered on Qiwa are not legally enforceable, exposing employers to significant compliance risk.
2. Domestic Workers: Electronic Salary Payments
A significant 2026 update for domestic workers is the mandatory shift to electronic salary payments. Cash payments to domestic workers are now prohibited. Employers must pay salaries through a traceable electronic method registered under the Wage Protection System.
3. Wage Protection System (WPS) and GOSI Integration
The Wage Protection System (WPS) mandates that all employees receive their salaries on time and through verified channels. In 2026, WPS is now strictly integrated with GOSI (General Organization for Social Insurance), meaning salary delays or irregularities can directly affect an employer’s GOSI compliance status.
4. First-Violation Settlement Mechanism
In January 2026, the MHRSD issued a decision establishing a formal settlement mechanism for first-time Labor Law violations. Employers who commit a violation for the first time may be offered a structured settlement process rather than immediate penalties, provided they rectify the issue within the defined timeframe. Repeat violations still carry full penalties.
5. Updated Saudization Quotas by Sector
Saudization targets have been updated for specific sectors. Marketing roles now require 60% Saudi nationals, while private-sector dental professionals must meet a 55% Saudization quota. Employers in these sectors should review their current workforce composition immediately.
Vision 2030 and Its Role in Shaping KSA Labor Law
Vision 2030 is Saudi Arabia’s national strategy to reduce dependence on oil, diversify the economy, and improve the quality of life for its citizens. Labor law reforms are a direct instrument of this vision, aimed at attracting foreign investment, increasing Saudi workforce participation, and building a more structured, professional employment environment.
The Vision Realization Programs driving these changes include:
- Fiscal Sustainability Program
- Public Investment Fund Program
- Financial Sector Development Program
- Human Capability Development Program
- National Industrial Development and Logistics Program
Core strategic goals include expanding private sector partnerships, developing the skills of Saudi nationals, and positioning the Kingdom as a global economic hub connecting Asia, Europe, and Africa.
Minimum Working Age Under Saudi Labor Law
Saudi Arabia enforces strict age limits for employment under Royal Decree M/51, applying to all workers regardless of nationality:
| Age Group | Employment Status |
|---|---|
| Under 15 | Cannot work or enter a workplace in any capacity |
| 15 to 17 (Minors) | May work in limited roles; prohibited from hazardous work |
| 18 to 20 | May work in general roles; adult protections apply |
| 21 and above (Males) | Minimum age for standard employment |
| 22 and above (Females) | Minimum age for standard employment |
Any employee under the age of 18 is classified as a minor and cannot be assigned to roles that endanger their health, safety, or moral wellbeing. This applies regardless of the employer’s size, sector, or the nationality of the worker.
Working Hours, Overtime, and Leave Entitlements
Standard Working Hours
- Daily maximum: 8 hours per day
- Weekly maximum: 48 hours per week
- During Ramadan: Reduced to 6 hours per day and 36 hours per week for Muslim employees
Rest Periods
Employees are entitled to a minimum 30-minute break after every 5 consecutive hours of work. This break may be used for rest, prayer, or meals.
Overtime Pay
Any hours worked beyond the standard limit qualify as overtime. Overtime must be compensated at 1.5 times the regular hourly wage. With mutual written agreement, employers and employees may substitute overtime pay for equivalent paid time off.
Weekly Rest Day
All employees are entitled to one full day of rest per week. Friday is the official weekly rest day in Saudi Arabia, though businesses may designate an alternative day by prior arrangement.
Annual Leave
| Length of Service | Annual Leave Entitlement |
|---|---|
| 1 to 5 years | 21 days of paid leave per year |
| Over 5 years | 30 days of paid leave per year |
Sick Leave
Employees may take up to 30 days of fully paid sick leave per year with a valid medical certificate. An additional 60 days may follow at reduced pay, typically ranging from one-third to three-quarters of the regular salary, depending on the employment contract and applicable regulations.
Maternity Leave
Maternity leave has been extended from 10 weeks to 14 weeks under the 2024 amendments. All female employees are entitled to this regardless of their role, salary, or nationality.
Paternity Leave
Male employees are entitled to 3 days of paid paternity leave following the birth of a child.
Bereavement Leave
3 days of paid bereavement leave are provided in the event of the death of a spouse or a relative.
Public Holidays
Employees are entitled to paid leave on all 5 officially recognized public holidays in the Kingdom.
Hajj Leave
Muslim employees who have completed a minimum of 2 years of continuous service with the same employer are entitled to 10 to 15 days of paid leave to perform the Hajj pilgrimage. This entitlement applies once per employment tenure.
Read our blog on Leaves in Saudi Arabia
Saudization (Nitaqat): 2026 Rules and Quotas
Saudization, locally known as Nitaqat, requires businesses operating in Saudi Arabia to employ a set proportion of Saudi nationals within their workforce. The 2024 amendments reinforced this policy and the 2026 sector-specific updates have tightened requirements further.
How Saudization Quotas Are Determined
Each business’s quota depends on three factors:
- The classification and type of the business
- The total size of the workforce
- The current percentage of Saudi nationals already employed
Current General Saudization Requirements
| Business Size | Saudization Requirement |
|---|---|
| 5 or fewer employees | At least 1 Saudi national |
| International companies | A Saudi national must hold a role alongside the general manager |
| More than 100 employees | Minimum 30% Saudi nationals in the workforce |
2026 Sector-Specific Quotas
| Sector | Saudization Target |
|---|---|
| Marketing roles | 60% |
| Private-sector dental professionals | 55% |
Non-compliance with Saudization requirements gives the Ministry grounds to refuse renewal of an employer’s work permit under the updated Article 35.
Digital Contracts and the Qiwa Platform
One of the most operationally significant changes for employers in 2026 is the mandatory digital registration of all employment contracts through the Qiwa platform. Qiwa is the MHRSD’s official digital HR portal for both private sector employers and their workers.
What this means in practice:
- All new employment contracts must be created and signed digitally via Qiwa
- Existing paper contracts that have not been digitally registered are at risk of being deemed unenforceable
- Both the employer and the employee must have verified Qiwa accounts for the contract registration to be valid
- The Qiwa platform also handles work permit renewals, employee transfers, and labor dispute filings
Employers managing large expatriate workforces should prioritize migrating all employment documentation to Qiwa to avoid compliance issues.
Probation Period
If a probation period applies to a new employee, it must be explicitly stated in the employment contract. The maximum duration of any probation period is 180 days, up from the previous 90-day limit.
Under the old law, extending probation beyond 90 days required a separate written agreement. The new 180-day cap consolidates this into a single contractual provision, giving employers more time to assess a new hire’s performance before the full protections of a permanent contract apply.
Termination of Employment
Grounds for Termination
Under Saudi labor law, an employment contract may be terminated in the following circumstances:
- Contract expiry: The agreement ends on its stated date unless explicitly renewed
- Mutual consent: Both parties agree in writing to terminate the contract early
- Bankruptcy: A new provision introduced in the 2024 amendments allows for termination upon the issuance of a final court bankruptcy order
- Disciplinary grounds: Subject to the procedures outlined in the labor law and internal HR policies
Notice Periods
| Contract Type | Employee Notice | Employer Notice |
|---|---|---|
| Fixed-term | 30 days | 60 days |
| Indefinite | 15 days | 30 days |
January 2026 Settlement Mechanism
For first-time violations of the Labor Law, the MHRSD introduced a formal settlement pathway in January 2026. Employers committing a violation for the first time may apply for a structured settlement instead of receiving an immediate penalty, provided the issue is corrected within the specified timeframe. This does not apply to repeat violations.
Renewal of Employer’s Work Permit
Previously, the Ministry could only refuse to renew a work permit if the employer violated Saudization requirements. The amendment to Article 35 expands this — the Ministry may now refuse renewal for any violation of the broader Regulations, not just Saudization.
Critically, the new rules protect workers in cases of non-renewal. A worker’s services may be transferred to another employer without the consent of the non-compliant original employer, ensuring the worker is not penalized for their employer’s violations.
Regulations for Non-Saudi and Expatriate Workers
Contract Duration
If a non-Saudi worker’s contract does not specify a duration, the contract is now treated as a 1-year agreement from the date the worker begins their duties. At the end of that year, if employment continues, the contract automatically renews for another 1-year term.
This replaces the previous rule, which tied the contract duration to the validity of the work permit.
Scope of Work
Employers cannot deploy non-Saudi workers in any role other than the one listed on their work permit. Expatriate employees cannot change their profession without following the formal legal process through the MHRSD.
Iqama and Residency
For expatriates, the iqama (residency permit) must remain valid for the duration of employment. Work permits and iqama renewals are tied to employer compliance, including Saudization adherence and Qiwa registration. Iqama violations can result in fines for both the employer and the employee.
Domestic Workers: 2026 Updates
Domestic workers in Saudi Arabia are covered by separate domestic worker regulations but remain subject to many provisions of the broader labor framework. Key 2026 updates for domestic workers:
- Electronic salary payments are mandatory. Cash payment of wages to domestic workers is now prohibited.
- All payments must go through a traceable electronic channel registered under the Wage Protection System.
- Domestic helper salaries vary depending on the worker’s nationality, experience, and the terms of the employment contract. General market rates in 2026 range from SAR 400 to SAR 1,500 per month depending on the role and arrangement.
Employers of domestic workers who fail to comply with the electronic payment requirement face penalties under the updated WPS enforcement framework.
Training and Development Obligations
Before the 2024 amendment, employers were required to “prepare” their Saudi employees to eventually replace non-Saudi workers, and were required to maintain a formal list of those replacements.
The new amendment replaces “prepare” with “develop a policy to train and qualify,” reflecting a more structured approach to workforce development. The requirement to keep a replacement list has been removed, with the Regulations now governing the relevant provisions.
End-of-Service Gratuity
All qualifying employees are entitled to an end-of-service gratuity calculated as follows:
| Service Period | Gratuity Rate |
|---|---|
| First 5 years | Half a month’s salary per year of service |
| Beyond 5 years | One full month’s salary per year of service |
The calculation applies to the final basic salary and must be paid upon termination, resignation, or contract expiry, subject to the conditions defined in the law.
Women’s Employment in Saudi Arabia
Saudi Arabia has expanded employment opportunities for women significantly as part of Vision 2030. Key protections for female employees under the 2026 labor law framework include:
- Minimum working age of 22 years
- Entitled to 14 weeks of paid maternity leave
- Cannot be assigned to roles that endanger their health, safety, or moral wellbeing
- Entitled to the same annual leave, sick leave, and overtime protections as male employees
- Dress code guidelines apply for workplace environments
The government’s target is to raise female labor force participation substantially, and recent Saudization quota updates in sectors such as healthcare and education actively promote female hiring.
Frequently Asked Questions
What is Royal Decree M/51? Royal Decree M/51 is the official legal designation of the Saudi Labor Law, first issued in September 2005. It governs all employment relationships in the private sector in the Kingdom of Saudi Arabia and has been amended multiple times, most recently in 2024.
What are the new Saudization rules for 2026? The 2026 updates include sector-specific quotas — marketing roles now require 60% Saudi nationals and private-sector dental roles require 55%. The general quota of 30% for businesses with more than 100 employees remains in place. Non-compliance can result in work permit non-renewal.
What are the new rules for foreign workers in Saudi Arabia? Expatriate workers must have their contracts registered digitally via Qiwa. If no contract duration is specified, the default term is 1 year from the start date with automatic annual renewal. Employers cannot assign expatriates to roles outside their work permit designation.
What are the new iqama rules in Saudi Arabia? Iqama renewals are tied to employer compliance with Saudization requirements and Qiwa registration. In 2026, iqama violations attract fines for both the employer and the employee. Workers whose employer’s work permit is not renewed can have their iqama transferred to a new employer without the original employer’s consent.
How does the Qiwa platform affect employers? All employment contracts must be digitally registered on Qiwa. Contracts not on the platform are not legally enforceable. Employers must also use Qiwa for work permit renewals and employee transfers.
What is the Wage Protection System (WPS)? The WPS is an electronic salary monitoring system that ensures employees are paid on time through verified channels. In 2026, WPS is integrated with GOSI. Non-compliance affects both the employer’s GOSI status and their ability to renew work permits.
Conclusion
Saudi labor law in 2026 combines long-standing regulations under Royal Decree M/51 with meaningful recent amendments that are changing how employment relationships are managed across the Kingdom. The shift to digital contracts via Qiwa, updated Saudization sector quotas, and tighter Wage Protection System enforcement mean that staying compliant now requires more structured HR systems than before.
Whether you are an employer navigating Saudization requirements or an employee seeking clarity on your rights around leave, overtime, or end-of-service gratuity, a clear understanding of the current framework is essential.
If you need support with HR operations, employment contracts, or labor law compliance in Saudi Arabia, HRSG can help. Our cloud-based HRMS platform, Octofy, provides AI-powered HR and payroll solutions, tailored talent consulting, and workforce management tools designed for businesses operating in the GCC.
