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To be HR compliant in Saudi Arabia, you need: (1) GOSI registration for all employees, (2) Nitaqat-compliant Saudization percentage, (3) Arabic employment contracts per Article 51, (4) WPS salary payments via Mudad, and (5) PDPL-compliant data handling. AqlHR automates all of this.
Navigate Saudi HR regulations with our comprehensive guides
نظام العمل السعودي
نطاقات السعودة
التأمينات الاجتماعية
مكافأة نهاية الخدمة
عقود العمل
الإجازات وساعات العمل
Follow these steps to maintain HR compliance in Saudi Arabia
Register your company and all employees with the General Organization for Social Insurance (GOSI). This is mandatory for all Saudi and non-Saudi employees.
Determine your Nitaqat color band by calculating your Saudization percentage based on entity size and sector. Ensure you meet minimum requirements.
Create employment contracts that comply with Saudi Labor Law Article 51, including all required terms in Arabic.
Configure payroll to comply with the Wage Protection System (WPS) through Mudad, ensuring timely salary payments.
Establish leave policies compliant with HRSD regulations including annual leave (21-30 days), sick leave, and special leaves.
Use HR software like AqlHR to continuously monitor compliance, receive alerts, and stay updated with regulatory changes.
Saudi Labor Law (Royal Decree No. M/51) is the primary legislation governing employment relationships in Saudi Arabia. It covers contracts, wages, working hours, leave, termination, and end-of-service benefits. The law was last updated in 2025 with significant changes to termination procedures and remote work regulations.
Nitaqat is Saudi Arabia's Saudization program that requires private sector companies to employ a minimum percentage of Saudi nationals. Companies are classified into color bands (Platinum, Green, Yellow, Red) based on their Saudization percentage. Higher bands receive benefits like easier visa processing, while lower bands face restrictions.
GOSI (General Organization for Social Insurance) is Saudi Arabia's social insurance system. All employers must register and contribute 12% of employee salaries (2% from employee, 10% from employer for Saudis; 2% from employer for non-Saudis). Registration is mandatory within 15 days of hiring.
End-of-service benefits are calculated based on Articles 84-85 of Saudi Labor Law. For resignation: half month salary for first 5 years, full month for years 6+. For termination: half month for first 5 years, full month for years 6+. The calculation includes basic salary plus housing allowance.
Saudi Labor Law mandates minimum 21 days annual leave for employees with less than 5 years of service, increasing to 30 days after 5 years. Leave cannot be waived, and unused leave must be compensated upon termination. Employees are also entitled to Eid holidays, National Day, and Founding Day.
Article 80 of Saudi Labor Law allows employers to terminate employees without notice or compensation in specific cases: assault, failure to perform duties, fraud, absence exceeding 30 days, or disclosure of confidential information. Proper documentation and procedures must be followed.
Article 77 governs compensation for unlawful termination. If termination is deemed unfair, the employee is entitled to 15 days salary for each year of service (minimum 2 months). This is in addition to end-of-service benefits and any notice period compensation.
WPS (Mudad) is a mandatory electronic salary transfer system in Saudi Arabia. Employers must pay salaries through approved banks by the 10th of each month. Non-compliance results in penalties including visa processing restrictions and fines.
Probation periods in Saudi Arabia cannot exceed 90 days, extendable to 180 days with written agreement. During probation, either party can terminate without notice or compensation. Probation terms must be clearly stated in the employment contract.
PDPL (Personal Data Protection Law) is Saudi Arabia's data privacy regulation effective 2023. HR departments must obtain consent for data collection, implement security measures, allow data access/correction/deletion requests, and report breaches within 72 hours. Penalties can reach SAR 5 million.