Saudi HR Guide

Saudi Arabia HR Compliance Guide: Mudad, Nitaqat & GOSI

The definitive guide to payroll compliance, Saudization requirements, and labour law in the Kingdom of Saudi Arabia.

Nitaqat colour bands

22%

Total GOSI (Saudi employees)

SAR 4K

Minimum wage (Saudis, private)

Qiwa

Government platform

1. Mudad: Saudi Arabia's WPS

Mudad is Saudi Arabia's Wage Protection System — a centralised platform that tracks all private-sector salary payments in real time. Unlike other GCC WPS systems that operate through central banks, Mudad is integrated directly with GOSI and the Ministry of Human Resources and Social Development (MHRSD).

How Mudad Works

Real-time monitoring: Every salary payment is recorded and tracked automatically
Integration: Connected to GOSI, Qiwa, and banking systems
Compliance scoring: Companies receive a compliance score based on payment timeliness
Consequences: Non-payment or late payment triggers automatic penalties — work permit suspensions, inability to process government services
Threshold: Applies to all establishments with 1+ employee(s)

Mudad Compliance Levels

Level	Payment Status	Consequences
Compliant	All salaries paid on time	Full access to government services
Warning	Payment delayed 1 month	Warning notification
Non-compliant	Payment delayed 2+ months	Work permit suspension, service blocks

2. Nitaqat: The Saudization Programme

Nitaqat is the most complex and actively enforced nationalisation programme in the GCC. It categorises companies by colour band based on their Saudization percentage relative to sector-specific targets.

Nitaqat Colour Bands

Band	Status	Impact
Platinum	Exceeds target significantly	Maximum benefits: easy visa processing, multi-year visas, transfer employees from other companies
Green (High/Mid/Low)	Meets or exceeds target	Normal operations: can issue new work permits, renew existing ones
Yellow	Below target	Restricted: limited work permits, no new visas, 6-month correction period
Red	Significantly below target	Severe: no work permits, no visa renewals, no transfers, active employees may not be renewed

Key Nitaqat Rules

Sector-specific targets: Each industry has different required percentages (e.g., retail may need 30%, contracting may need 10%)
Company size matters: Larger companies face higher absolute requirements
Minimum Saudi wage: SAR 4,000/month for a Saudi employee to count toward Nitaqat
Part-time Saudis: Count as 0.5 toward quota (must work 24+ hours/week)
Students: Saudi students can count partially during co-op/training periods
Disabled Saudis: Count as 4x toward quota (incentivising inclusive hiring)

Nitaqat is not static. The Saudi government regularly adjusts targets upward as part of Vision 2030. Sectors that had low requirements may see increases with limited notice. Companies must monitor changes proactively.

3. GOSI: Saudi Social Security

The General Organization for Social Insurance (GOSI) is unique in the GCC because it covers both Saudi and non-Saudi employees, although at different rates.

GOSI Contribution Rates

Category	Employer	Employee	Total
Saudi employees
— Pension (Annuities)	9.75%	9.75%	19.5%
— Occupational Hazard	2%	—	2%
— SANED (Unemployment)	0.75%	0.75%	1.5%
Saudi subtotal	12.5%	10.5%	23%
Non-Saudi employees
— Occupational Hazard	2%	—	2%
Non-Saudi subtotal	2%	0%	2%

GOSI ceiling: Contributions are calculated on a maximum monthly salary of SAR 45,000. Amounts above this ceiling are not subject to GOSI deductions.

4. End-of-Service Benefits (KSA)

Tenure	EOS Rate
First 5 years	Half month's salary per year
After 5 years	Full month's salary per year

Resignation Reduction

Less than 2 years: No entitlement
2-5 years: One-third of EOS
5-10 years: Two-thirds of EOS
10+ years: Full EOS

EOS is calculated on the last actual salary including basic salary and allowances. There is no statutory cap on the total amount.

5. Saudi Labour Law: Key Provisions

Working Hours

Maximum 8 hours/day or 48 hours/week
Reduced to 6 hours/day during Ramadan
Overtime: 150% of hourly wage
Weekly rest: Friday (or as agreed), minimum 24 consecutive hours

Leave Entitlements

Annual leave: 21 days (first 5 years), 30 days (after 5 years)
Sick leave: 120 days per year (30 full pay, 60 at 75%, 30 unpaid)
Maternity leave: 10 weeks (4 before due date + 6 after)
Paternity leave: 3 days
Hajj leave: 10-15 days once during employment (for employees who haven't performed Hajj)
Marriage leave: 5 days
Bereavement leave: 5 days (spouse), 3 days (other close relatives)

Qiwa Platform

Qiwa is the Saudi government's digital platform for labour market management. Through Qiwa, companies can:

Issue and renew work visas
Process employee transfers
Monitor Nitaqat status in real time
Manage employment contracts digitally
Submit occupational safety and health reports

Comparing Saudi and Kuwait HR Compliance

Aspect	Kuwait	Saudi Arabia
WPS system	Central Bank WPS	Mudad
Nationalisation	Kuwaitisation (PAM)	Nitaqat (Saudization)
Complexity	Moderate	High (colour bands, frequent changes)
Social security	PIFSS (nationals only)	GOSI (all employees, different rates)
Employer SS rate (nationals)	~11.5%	12.5%
EOS (first 5 years)	15 days/year	15 days/year
EOS (after 5 years)	1 month/year	1 month/year
EOS cap	1.5 years' salary	No statutory cap
Minimum wage (nationals)	No formal minimum	SAR 4,000/month
Government platform	PAM portal	Qiwa

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