As of March 2024, the estimated population of Saudi Arabia is 36,947,025 people.
The currency in Saudi Arabia is the Saudi riyal (SAR). The currency symbol is ر.س.
Indefinite contracts are contracts made for more than 3 years. Fixed-term contracts convert into indefinite-term contracts upon their third renewal or if they are continued even after their expiry without explicit renewal. Foreign employees can only be employed under fixed-term contracts. Indefinite-term contracts are terminated by the mutual consent of both the employee and employer or at the initiative of either party based on a legitimate reason, which must be stated in a written notice addressed to the other party. From August 6, 2026, all indefinite-term contracts must be documented through the Qiwa platform to ensure legal enforceability.
For Saudi national employees, the Labor Law does not require the employment contract to be in writing. A contract is deemed to exist even if not written, in which case the employee alone may establish the contract and their entitlements arising from it by all methods of proof. Either party may at any time demand that the contract be put in writing. For non-Saudi employees, the employment contract must be in writing and must be of a fixed term. If the contract does not specify a duration, the duration of the work permit is deemed to be the duration of the contract. Regardless of the nationality of the employee, Arabic is the mandatory language for all written employment contracts. If the employer uses a foreign language alongside Arabic, the Arabic text shall prevail in all cases. Where a written contract exists, it must be prepared in duplicate, with 1 copy retained by each party. The contract must primarily include the name and location of the employer, the name, nationality, and identification of the worker, the agreed wage, including benefits and allowances, the type and location of work, the date of commencement of employment, and the duration of the contract if it is of a fixed term. Employers must authenticate employee contracts via the Qiwa Platform, from registering the contract, updating the details of professions, wages, and qualifications, to the end or termination of the contractual relationship.
Temporary work is defined as work considered by its nature to be part of the employer’s activities, requiring a specific period or relating to a specific job and ending with its completion. It must not exceed 90 days in either case. Temporary employment contracts that continue beyond 90 days will become indefinite-term employment contracts. Temporary employees are not entitled to end-of-service benefits. According to the Labor Law, these employees are subject to provisions on duties and disciplinary rules, maximum working hours, daily and weekly rest intervals, overtime work, official holidays, safety rules, occupational health, work injuries, compensation, and whatever is decided by the Minister of Labor.
The Labor Law of the Kingdom of Saudi Arabia provides that an employment contract can designate the first 180 days of employment as a probationary period. The probationary period cannot be extended. The probationary period must be explicitly stated in the employment contract and include leave that does not count toward the duration of the probationary period. An employee cannot be subject to more than 1 probationary period with the same employer in the same position or role. As an exception, the employee may be placed on another probationary period if it is for a different position or occupation, or at least 6 months have passed since the termination of the employee's relationship with the employer. The employee and employer can terminate the employment contract without any notice period during probation. Such termination does not entitle the employee to payment of severance or damages.
The maximum working hours are generally 8 per day or 48 per week, except during the holy month of Ramadan. During Ramadan, Muslim employees' working hours may not exceed 6 hours per day or 36 hours per week. Under exceptional circumstances, employees may be asked to work beyond normal hours, limited to 10 hours per day or 60 hours per week. Employees cannot be allowed to work for more than 5 hours continuously.
2026
2027
The minimum entitlement to paid annual leave is 21 days a year, increasing to 30 days a year after 5 years of service. The employer cannot forfeit the leave, nor can it be paid in lieu of leave. Employers decide the dates of the leave according to work requirements. They must inform their employees of the leave at least 30 days before. The employee has the right to request that their employer defer their entire annual leave or part thereof to the next year. If required by work conditions, an employer may postpone an employee's leave for up to 90 days after the end of the year, which is due with the employee's written approval. According to a new measure for mitigating the impact of COVID-19, the government has allowed employers to place employees on paid annual leave or unpaid leave (with the employee's agreement) to cope with a decrease in work.
According to the Kingdom of Saudi Arabia's Labor Law, the minimum entitlement to sick leave is 120 calendar days a year, implemented as follows: First 30 Days - fully paid Next 60 Days - 75% of the total wages Next 30 Days - unpaid Sick leave can be continuous or intermittent. An employer cannot terminate the worker's services on account of illness prior to allowing their sick leave. Sick leave may be combined with annual leave. If the sick leave days coincide with the annual leave days, the annual leave days are suspended until the end of the sick leave days. If weekly days off coincide with sick leave days, the worker may not be compensated for those days.
Under the Labor Law of Saudi Arabia, pregnant employees are entitled to 12 weeks of paid maternity leave, with at least 6 weeks of this leave to be taken after the birth of a child. The remaining 6 weeks of leave may be taken as the pregnant employee chooses, beginning as early as 4 weeks before the expected date of birth. If the remaining leave is less than 6 weeks due to a delay in the date of birth, the remaining period will be unpaid. The employee may extend the unpaid leave for 1 month in all cases. If an employee's child is born sick or with specific needs that require continuous attention, the employee is entitled to an additional 1 month of paid leave beginning after the end of the maternity leave period, and the employee may extend an additional month of unpaid leave. Employers are prohibited from dismissing or suspending an employee while she's on maternity leave or for 180 days before her maternity leave begins.
In the Kingdom of Saudi Arabia, male employees are entitled to a paid paternity leave of 3 days, which can be taken within 7 days of the child's birth. Employers have the right to request supporting documents.
According to the Kingdom of Saudi Arabia's Labor Law, during any probationary period, either the employer or employee has the right to terminate the employment contract without notice. Parties to indefinite employment contracts that pay a monthly salary may terminate the contract for a legitimate reason as follows: By the employee with 30 days' written notice to the employer before the termination date By the employer with 60 days' written notice to the employee before the termination date Parties to indefinite employment contracts that do not pay monthly salaries may terminate the contract for a legitimate reason with 30 days written notice to the other party before the termination date. Employees employed under fixed-term contracts may resign by submitting a 30-day notice to their employer.
Upon termination of the employment relationship, the employer is required to pay the employee an end-of-service benefit (EOSB). The EOSB is calculated as follows: Half a month's wage for each year of service during the first 5 years 1 full month's wage for each year of service beyond 5 years Partial years are calculated on a pro-rata basis If a female employee resigns within 6 months of her marriage or 3 months of her delivery date, full severance is paid irrespective of her years of work experience. The full final settlement, including the EOSB, must be paid within 1 week of the date the employment relationship ends, where the employer initiates termination or the contract expires, and within 2 weeks where the employee resigns.
Saudi Arabia's New Social Insurance Law unifies the public and private sector pension schemes, allowing Saudi employees to transfer between sectors without losing accrued contribution periods. For employees who began contributing before July 3, 2024 (existing system), insured employees are eligible for a retirement pension if they reach 60 years of age and have made at least 120 months of paid contributions. Early retirement may be taken at any age if the employee has made at least 300 monthly contributions. Some existing contributors are subject to a graduated retirement age rather than the standard 60 years. Whether this applies depends on the contributor's age and length of service as of July 3, 2025. The pension is 2.5% of the insured’s average monthly earnings during the last 2 years for each year of contributions after 2001. For contributions made before 2001, the pension is calculated as 2% of the average wage over the last 2 years per year of contributions. The maximum pension is 100% of the average salary. The minimum pension is SAR 1,983.75 (Saudi riyals) a month. For employees who began contributing on or after July 3, 2024 (new system), the retirement age is 65 years. A contributor may retire early (up to 120 months before the legal age of entitlement), provided they have ceased covered employment and completed at least 360 months of contributions. The pension is reduced by 3% for every 12 months preceding the legal age of entitlement. The old-age pension is calculated as 2.25% of the average contributory wage, multiplied by the number of contribution months, divided by 12. The average contributory wage is based on the highest contributory wages across 180 contribution months. The maximum pension is 100% of that average. The minimum pension for a contributor with 480 months of contributions is SAR 4,000 per month; the minimum for a contributor who has met the qualifying period but has fewer than 480 months of contributions is SAR 2,000 per month.
The Social Insurance framework in Saudi Arabia provides benefits to the survivors of a deceased insured member in cases of both occupational and non-occupational death. As of July 3, 2024, 2 systems operate in parallel. Contributors with any contribution period prior to that date remain governed by Social Insurance Law M/33, while new entrants to the workforce from that date, with no prior contributions, fall under Social Insurance Law M/273. Under M/33, survivors are eligible for benefits if the deceased was in covered employment, had at least 3 consecutive or 6 non-consecutive months of contributions, was receiving an old-age or disability pension, or died due to occupational reasons. Eligible survivors include spouses, children (subject to age and education conditions), parents, and certain extended family members such as grandchildren, siblings, and grandparents. Pensions are distributed equally among eligible family members and calculated based on the deceased’s entitlement: 100% for 3 or more survivors, 75% for two, and 50% for 1. If eligibility conditions are not met, a lump sum is paid based on the insured’s average earnings and contribution history. Under M/273, survivor benefits apply where the deceased contributor was in covered employment with at least 3 consecutive or 6 non-consecutive months of contributions following registration, was already receiving a pension, or had reached the qualifying contribution period. Eligible survivors are more narrowly defined, generally limited to the spouse, children (subject to age, education, or disability conditions), and dependent parents. Pensions are also distributed equally and calculated at 75% for 2 or more survivors and 50% for a single survivor. Where pension eligibility is not met, survivors receive a lump sum based on total contributions paid by the employer and the contributor, with a minimum equal to those contributions.
As of July 3, 2024, 2 systems operate in parallel. Contributors who had any contribution period prior to July 3, 2024, remain governed by the Social Insurance Law (M/33). New entrants to the workforce from July 3, 2024, with no prior contribution periods, are governed by the new Social Insurance Law (M/273). The system is divided into 2 main branches. The Occupational Hazards Branch covers work-related injuries and occupational diseases and applies to all workers regardless of nationality. The Annuities Branch, which includes non-occupational disability and retirement benefits, applies only to Saudi nationals. The non-occupational disability pension provides income support to insured persons assessed as having a non-occupational disability expected to last at least 6 months. To qualify, the insured person must have completed at least 12 consecutive monthly contributions or 18 non-consecutive monthly contributions, must be engaged in covered employment at the time the disability is established, and must be below the legal age of pension entitlement when the disability occurs. In the case of disability caused by an occupational hazard, employers must cover medical care expenses and provide monetary compensation (pension and lump-sum benefits), depending on the type and degree of disability. Where a non-Saudi worker is entitled to a monthly benefit for permanent total or partial disability, or where the family of a non-Saudi worker is entitled following death from a work injury, a lump sum is paid in lieu of the monthly benefit. The maximum contributory wage for the calculation of contributions and benefits is SAR 45,000 per month under both systems.
There is no personal income tax on income from employment in the Kingdom of Saudi Arabia. However, residents and non-resident non-Saudis who conduct a business or profession in the country are subject to tax. The tax year runs from January 1 to December 31. The tax rate for individuals' income obtained from taxable activities in Saudi Arabia is 20%. Dividends, interest, rent, payments made for technical and consulting services, flights, freight or marine shipping, international telephone services, and insurance or reinsurance premiums are taxed at 5%.
Foreign nationals who wish to work in Saudi Arabia must obtain work visas sponsored by their employers. There are 3 types of work visas in Saudi Arabia: seasonal work visas, permanent work visas, and temporary work visas. Temporary work visas are issued for up to 1 year, but allow the visa holder to stay for a period limited to 90 days. This period can be extended only once for a period of another 90 days. Permanent work visas are granted to workers with long-term employment contracts, while seasonal visas cannot exceed 4 months. To obtain a work visa, the employer must prove that no Saudi citizen could fill the position. Employers must apply for a work visa to the Ministry of Human Resources and Social Development. After receiving authorization from the Ministry, a work visa is issued by the Ministry of Foreign Affairs. Documents to be submitted include the employment contract, proof of qualifications, medical certificate, letter of sponsorship from the employer, Zakat Certificate, Company Registration, etc. In July 2025, Saudi Arabia introduced a new skill-based classification system for expatriate permits. Under this system, work permits are categorized into high-skilled, skilled, and basic levels, based on factors such as qualifications, experience, occupation, and wage levels. The change was rolled out in phases, beginning with the reclassification of existing foreign workers and then applying to new work permit applications as of August 3, 2025. In March 2021, the existing Saudi immigration regulations were amended as part of the Kingdom's Labor Reform Initiative. The reforms affect foreign workers in Saudi Arabia and aim to ease the strict "kafala" employer sponsorship system. The reforms allow foreign workers to change jobs by transferring their sponsorship from one employer to another and re-enter and exit the country without the consent of their employer.
