Hiring in Saudi Arabia in 2025 requires more than just finding the right talent. Employers must follow strict legal requirements, digital procedures, and Saudization quotas to ensure they remain compliant. This becomes even more important for investors aiming for business setup in Saudi Arabia.
Recent amendments to the Labor Law and related regulations have made the process more structured, with higher penalties for violations. Below is a detailed description for companies to hire legally in the Kingdom.
Hiring in Saudi Arabia – A Compliance Guide
1. Advertising and Recruitment Rules
From May 1, 2025, job advertising in Saudi Arabia is regulated under updated recruitment guidelines. All vacancies must follow the Saudi Standard Classification of Occupations and be posted only on authorized channels such as:
- The Qiwa platform or other official government job portals
- Licensed company websites
- Approved job fairs
- Verified corporate social media accounts
Job postings must include details such as job title, required qualifications, company background, working hours, compensation, benefits, and a specific application deadline. Interviews must:
- Be scheduled with at least three working days’ notice
- Be held in venues that meet occupational health and safety standards
- Include at least two Saudi nationals on the panel, with one being an HR professional
- Result in notifying selected candidates within 30 days
Discrimination based on gender, race, age, disability, or marital status is prohibited, and equal pay for equal work is mandatory under Ministerial Resolution No. 398608.
2. Saudization and Nitaqat Compliance
The Nitaqat program classifies companies based on the percentage of Saudi nationals they employ:
- Platinum: 26.52% or more
- High Green: Strong compliance
- Medium Green: Satisfactory compliance
- Low Green: Minimum compliance
- Red: Non-compliant and subject to penalties
In 2025, quotas have been updated for 269 professions. Examples include:
- Pharmacy: 55% (65% for hospitals, 35% for community pharmacies)
- Dentistry: 45% (55% in 2026)
- Engineering: 30%
- Accounting: 40%, increasing 10% annually until 2028
Falling below the required quota can result in visa restrictions, refusal of renewals, fines, and disqualification from government contracts.
3. Drafting Employment Contracts via Qiwa
All employment contracts, for both Saudi nationals and expatriates, must be registered through the Qiwa platform. Each contract should state:
- Full names, addresses, and ID numbers of both parties
- Job title and location
- Contract type and duration
- Salary, working hours, leave, and overtime details
- Housing and transportation provisions
- Termination clauses
For expatriates, contracts must be fixed-term and cannot exceed four years. Saudi nationals can be employed under indefinite contracts. The Qiwa process includes:
- Registering on the platform
- Entering employer and employee details
- Drafting the contract with mandatory clauses
- Getting digital acceptance from the employee
4. Temporary Work Visas
Temporary Work Visas allow foreign workers to enter Saudi Arabia for short-term assignments without obtaining an Iqama. They are valid for six months, extendable once for another six months, and cost SAR 1,000 (about USD 266.5). Eligibility requirements include:
- Valid Commercial Registration
- Compliance with the Wage Protection System
- Nitaqat rating of Medium Green or higher
As of April 28, 2025, these visas have been suspended until further notice.
5. Updated Probation Period
The probation period limit has been extended from 90 to 180 days. During this time, either party can terminate the contract without notice or compensation. The probation terms must be clearly stated in the contract from the start. Businesses that are eyeing company formation in the KSA should take note of it.
6. Skill-Based Employee Classification
From July 2025, work permits are issued based on three skill categories:
- High-skilled: Managers, specialists, technicians (Groups 1–3) with certifications and salary thresholds
- Skilled: Mid-level roles (Groups 4–8) requiring verified qualifications
- Basic: Manual roles (Group 9) for workers under 60 years of age
7. Termination and Resignation Rules
Article 74 allows termination in cases such as contract expiry, mutual agreement, retirement, force majeure, business closure, or bankruptcy. Article 80 permits termination without notice in cases of misconduct, fraud, breach of trust, or repeated absences. Notice periods in 2025 are:
- Monthly-paid employees: 30 days for resignation, 60 days for termination by employer
- Other employees: 30 days for both resignation and termination
Resignations must be in writing and can be withdrawn within seven days if not accepted. Employers may delay acceptance up to 60 days with a written explanation.
8. End-of-Service Benefits
Gratuity depends on the length of service and reason for separation.
For resignation (Article 85):
- Less than 2 years: No gratuity
- 2–5 years: One-third of gratuity
- 5–10 years: Two-thirds of gratuity
- Over 10 years: Full gratuity
For termination:
- 1–5 years: Half a month’s basic salary per year
- Over 5 years: One month’s basic salary per year
9. Final Exit and Settlements
A final exit visa is required for expatriates leaving permanently. Requirements include:
- Valid Iqama with at least 30 days before expiry
- No fines or violations
- Full settlement of dues
Settlement must cover:
- End-of-service gratuity
- Unused leave compensation
- Pending salary and overtime
- Any contractual benefits
- Return of personal documents
10. Labor Compliance, Welfare, and Penalties
– Wage Protection: Salaries must be paid via banks approved by the Saudi Central Bank. Late payments incur a SAR 300 fine per affected worker.
– Occupational Safety: Outdoor work is banned between 12:00 p.m. and 3:00 p.m. from June 15 to September 15. Fines range from SAR 1,500 to SAR 5,000 depending on violations.
– Housing and Transport: Employers must provide or compensate for housing and transportation across all sectors from 2025.
Leave Benefits:
- Maternity leave: 12 weeks (6 weeks post-delivery)
- Paternity leave: 3 days within 7 days of childbirth
- Bereavement leave: 3 days for sibling’s death
Penalties for Violations:
- SAR 200,000–250,000 for operating without licenses
- SAR 10,000 per worker for illegal hiring
- SAR 300 per worker for late salary payments
Hiring legally in Saudi Arabia now requires a clear understanding of labor laws, strict adherence to Saudization targets, and full use of digital platforms like Qiwa. The updated regulations in 2025 aim to improve transparency, protect workers’ rights, and modernize the recruitment process.
Investors who want to go for a fully compliant business setup in the KSA, keeping track of these requirements is essential to avoid fines, delays, or operational disruptions.
Partnering with experienced HR and legal advisors can help navigate the system smoothly while focusing on business growth.