How to Hire in Saudi Arabia Legally: A Step-by-Step Guide

From Qiwa contracts to Saudization quotas, here’s what companies need to follow to hire legally in Saudi Arabia. A detailed guide based on updated amendments in Labor Laws in 2025.

Employers in Saudi Arabia are increasingly required to navigate a more digital governed recruitment process. In 2025, the Ministry of Human Resources and Social Development (MHRSD) introduced several updates that require companies to use platforms like Qiwa for posting vacancies, verifying candidate eligibility, and finalizing employment contracts. These changes apply across sectors and cover both Saudi nationals and expatriate hires.

Let us look at the updated legal procedures that businesses must follow to hire lawfully in the Kingdom.

Advertising and recruitment under Saudi labor law

From May 1, 2025, companies need to follow new recruitment guidelines that created standards on how jobs are advertised and candidates are interviewed. All job openings now should be as per the Saudi Standard Classification of Occupations and published only on authorized channels like official digital platforms, company websites, licensed job fairs, or approved social media accounts.

Each advertisement has to clearly state the job role, qualifications, organizational background, working hours, compensation details, benefits, and a specific application deadline. Interviews must be scheduled with a minimum of three working days’ notice and held in venues that meet occupational health and safety standards.

Every interview panel should include at least two Saudi nationals, one of whom must be a human resources professional. And employers must notify selected candidates within 30 days of the interview.

The regulations prohibit discriminatory hiring practices. Employers cannot discriminate based on gender, race, age, disability, or marital status. Ministerial Resolution No. 398608 makes it compulsory to have equal pay for equal work.

Saudization and Nitaqat compliance

The companies operating in Saudi Arabia have to meet Saudization targets under the Nitaqat program. It classifies firms based on their employment of Saudi nationals:

• Platinum: 26.52 percent or more;
• High Green: Strong compliance level;
• Medium Green: Satisfactory compliance;
• Low Green: Minimum compliance;
• Red: Non-compliant and subject to penalties.

In 2025, Saudi Arabia has updated Saudization ratios that apply to 269 professions. For example, the quota has become 55 percent for pharmacy (65 percent for hospitals, 35 percent for community pharmacies), 45 percent for dentistry (rising to 55 percent in 2026), 30 percent for engineering, and 40 percent for accounting (increasing by 10 percent annually until 2028).

Its compliance is strictly important because non-compliance can lead to restrictions on work visa issuance, renewal refusals, penalties, and loss of eligibility for government contracts.

Drafting employment contracts via Qiwa platform

All the employment contracts in Saudi Arabia must be registered and processed through the Qiwa digital platform. This requirement applies to both local and foreign hirings. The contract details should include these items:

• Full names, addresses, and ID numbers of both the employer and employee;
• Job title and work location;
• Duration and type of contract (fixed or indefinite);
• Compensation, working hours, overtime pay, leave benefits;
• Housing and transportation details; and
• Termination clauses.

If a firm is hiring expat employees, they have to be offered fixed term contracts. And if no term is specified, the contract is considered valid for one year. But the contracts cannot exceed four years for foreign nationals. In contrast, Saudi nationals can be employed under indefinite contracts and can be terminated by either party with proper notice, subject to termination with appropriate notice.

Qiwa Platform Requirements:

• Register on the Qiwa platform;
• Enter complete employee and employer information;
• Create contract with mandatory and optional clauses; and
• Employee acceptance or rejection (unlimited revisions possible).

Once created on Qiwa, contracts are to be reviewed and digitally accepted by the employee. The firm can make revisions to it before its final acceptance, after which the system will notify the concerned government authorities.

Temporary work visas for short term hiring

Saudi Arabia has a framework for short-term hiring through the Temporary Work Visa. This visa allows companies to engage foreign workers for limited assignments without the need for a residence permit (Iqama).

It is valid for an initial period of six months and can be extended once for another six months. It permits multiple entries and is issued via the Qiwa platform. The application fee for this visa is SAR 1,000 (US$ 266.5).

To be eligible to sponsor such workers, employers need to meet the following conditions:

• Hold a valid Commercial Registration;
• Be compliant with the wage protection system;
• Maintain a Nitaqat rating of medium Green or higher.

But please note, since April 28, 2025, temporary work visas have not been issued and authorities have not yet announced when or if the service will resume.

Revised probationary period regulations

Saudi labor law has updated the duration of probationary periods in 2025. Now employers may set a probationary period of up to 180 days, up from the previous limit of 90 days. During this period, either the employer or the employee may terminate the employment contract without notice or compensation.

But the terms on probation, including the right to terminate, need to be included in the employment contract at the time of hiring. The extended period gives both parties more time to assess suitability while maintaining legal clarity.

Skill based employee classification system

Saudi Arabia’s updated work permit classification system, introduced in July 2025, assigns employees into three skill-based categories. This system determines work eligibility based on education, age, experience, and salary, and is tied to professional licensing and verification programs.

The categories are namely:

• High-skilled: Includes managers, specialists, and technicians (occupational groups 1 to 3). These roles require professional certification and minimum salary thresholds.
• Skilled: Covers mid-level roles (groups 4 to 8), and needs verified qualifications and participation in a skills verification program.
• Basic: Covers manual roles (group 9) and restricted to workers under 60 years of age.

The classification framework intends to support labor market transparency and ensure that permits are issued based on verified qualifications.

Termination and resignation process

The Kingdom prescribes strict grounds for contract termination under Articles 74 and 80 of the Labor Law.

Article 74 permits termination in the following cases:

• Mutual agreement between employer and employee;
• Expiry of the employment contract;
• Retirement at age 60 for men and 55 for women;
• Force majeure events;
• Permanent closure of the business; and
• Employer’s bankruptcy (added in 2025).

Article 80 allows termination without notice in more serious situations, such as:

• Physical assault on the employer or a supervisor;
• Failure to perform essential job duties;
• Misconduct involving dishonesty or breach of trust;
• Intentional harm to the employer’s property;
• Use of falsified documents to secure employment;
• Being absent for more than 20 non-consecutive days in a year or 15 consecutive days without justification;
• Exploiting the job for personal gain without approval; and
• Disclosure of trade secrets that result in harm.

Notice periods and resignation process

The amendments to Labor Law in 2025 also revised notice periods based on employee type:

Monthly-paid employees:

• Must provide 30 days’ written notice to resign; and
• Employers must provide 60 days’ notice to terminate.

Other employees:

• Both resignation and termination require 30 days’ notice.

Employee resignation should be formally submitted in writing and should be unconditional. Employers get 30 days to respond and if no response is provided, the resignation is automatically accepted. Employees can also withdraw their resignation within 7 days of submission, if the employer has not accepted it already.

In cases when the employer needs extra time to process the resignation, they may delay acceptance by up to 60 days, but only with a written explanation.

End-of-service benefit and employee exit settlements

Saudi labor law specifies how end-of-service benefits are calculated, based on the reason for separation and length of service. Gratuity entitlements differ between voluntary resignation and employer-initiated termination, with calculations based on the employee’s basic salary.

Gratuity for resignation under Article 85 is determined as follows:

• Less than 2 years of service: No gratuity is payable;
• Between 2 and 5 years: One-third of the total gratuity amount;
• Between 5 and 10 years: Two-thirds of the gratuity; and
• 10 years or more: Full gratuity is due.

For employee termination, the rules differ:

• Less than 1 year of service: No gratuity is owed;
• Between 1 and 5 years: Entitlement is half a month’s basic salary for each year of service; and
• More than 5 years: One full month’s basic salary for each completed year.

In standard cases, the gratuity formula is:

• For the first 5 years: Half a month’s basic salary per year; and
• Beyond 5 years: One month’s basic salary per year.

Final exit procedures and settlement obligations

Before issuing a final exit visa, employers must complete a series of administrative and financial steps. Final exit visa is the permit for expat workers to leave the country permanently. The visa process can only begin if the employee’s Iqama (residency permit) is valid for at least 30 days and there are no unresolved penalties or violations on record.

Exit visa requirements:

• Initiated by the employer through an official government platform;
• No outstanding fines, traffic violations, or other legal holds; and
• All dues to the employee are cleared.

Final settlement for employee should include:

• End-of-service gratuity;
• Compensation for unused annual leave;
• Unpaid salary and any approved overtime;
• Any additional amounts or benefits agreed upon in the employment contract; and
• Return of the employee’s personal documents (passport, certificates, etc.).

Labor compliance, welfare obligations, and penalty

For wage disbursement

Under the Wage Protection System (WPS), employers need to ensure that all salaries are transferred through banks authorized by the Saudi Central Bank (SAMA). If the payments are delayed or inconsistent it can invite penalties of SAR 300 (US$80) per affected worker.

For safety and welfare

Saudi law has seasonal occupational safety measures to protect workers from extreme conditions. Between June 15 and September 15, outdoor work is prohibited from 12:00 p.m. to 3:00 a.m. Its violations can lead to fines ranging from SAR 1,500 (US$400) to SAR 5,000 (US$1,332.9), depending on the severity and frequency of violation.

Employers are also required to provide either company-arranged or financially compensated housing and transportation. This rule became effective in 2025 and applies across all sectors.

The Labor law amendments in 2025 have expanded employee leave benefits and revised penalties too:

• Maternity leave: 12 weeks, with at least 6 weeks taken post-delivery;
• Paternity leave: 3 days, to be used within 7 days of childbirth; and
• Bereavement leave: 3 days, applicable on the death of a sibling.

This shows that Saudi Arabia is bringing its labor welfare rights and duties to the globally accepted standards. For regulatory violations, firms can now attract monetary penalties, depending on the nature of the breach:

• SAR 200,000 (US$53,316) to SAR 250,000 (US$66,645) for providing labour services without valid licensing;
• SAR 10,000 (US$2,665.8) per worker for hiring practices that violate Saudi labour law; and
• SAR 300 (US$80) per worker for late or withheld salary payments.

Together, these compliance expectations and enforcement tools can strengthen the integrity of Saudi Arabia’s labor environment and at the same time safeguarding workers’ rights.

You may find interesting: Saudi Arabia Revises Labor Law Penalties to Strengthen Workplace Compliance 

In short

Hiring legally in Saudi Arabia is not just about filling vacancy. Employers must navigate multiple approvals, submit digital documentation, and meet Saudization requirements throughout the process. Companies should also remain updated on procedural changes to avoid delays or penalties.

As Saudi Arabia continues refining its labor regulations, businesses can take professional help to deal with changing business and hiring practices.

(US$1 = SAR 3.75)

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