Saudi Labour Law for Employers: 2026 Guide, Including Iqama Fees
Saudi employer guide · Updated November 2026
The Saudi Labour Law changed in February 2025. This guide gives HR teams the current rules on contracts, probation, notice, hours and leave. It also covers Iqama and levy fees, GOSI and end-of-service pay, with links to calculators and the Saudization guide.
Short answer: since 18 February 2025, probation can last up to 180 days and employers give 60 days’ notice on open-ended contracts. Employers pay the Iqama fee of SAR 650 a year and a levy of about SAR 800 per expat a month.
Saudi Labour Law: Key Rules for Employers
| Topic | Rule |
|---|---|
| Probation | Up to 180 days |
| Notice, open-ended contracts | Employer 60 days; employee 30 days |
| Working hours | Up to 8 hours a day or 48 hours a week; shorter hours for Muslim workers in Ramadan |
| Overtime | Hourly wage plus 50% of the basic hourly wage |
| Annual leave | 21 days a year; 30 days after five years |
| Sick leave | 30 days full pay, 60 days at 75% pay, 30 days unpaid, per year |
| Maternity leave | 12 weeks, six of them after the birth |
| Paternity leave | 3 days |
| End-of-service award | Half a month’s wage a year for five years, then one month a year. |
The rules come from the Saudi Labour Law and the amendments in force from 18 February 2025. Confirm current rules with MHRSD or a qualified adviser.
Contracts and Probation
Employment contracts are documented on Qiwa. For non-Saudi employees, a contract with no stated term runs for the term of the work permit.
Probation can last up to 180 days. Either side can end the contract during probation, as set out in the law.
Iqama, Work Permit and Levy Costs
| Fee | Amount | Who pays |
|---|---|---|
| Iqama issue or renewal | SAR 650 a year; also payable for 3, 6 or 9 months | Employer |
| Work permit levy (expat levy) | About SAR 800 per non-Saudi worker per month | Employer |
| Dependent fee | SAR 400 per dependent per month | Usually the employee |
| Late Iqama renewal | SAR 500 for the first delay and SAR 1,000 for the second | Employer |
The employer must not deduct the levy or Iqama fees from salary. Fees change from time to time, so check the current amounts on Qiwa or with MHRSD.
Hours, Overtime and Leave
Normal hours are up to 8 a day or 48 a week. In Ramadan, Muslim workers have shorter hours.
Overtime is paid at the hourly wage plus 50% of the basic hourly wage. Annual leave is 21 days a year, rising to 30 days after five years of service.
The 2025 amendments set maternity leave at 12 weeks and added 3 days of paternity leave.
Wages, GOSI and Wage Protection
- Pay salaries through the wage protection system on the Mudad platform.
- Register employees with the General Organization for Social Insurance (GOSI) and pay contributions each month.
- Provide housing and transport, either in kind or as cash allowances.
- Provide mandatory health insurance.
Ending Employment and End of Service
For open-ended contracts, the employer gives 60 days’ notice and the employee 30 days. Article 80 lists the grounds for dismissal without notice or end-of-service award.
The end-of-service award is half a month’s wage for each of the first five years, then one month a year. Resignation reduces it below ten years of service. Use the Saudi end of service calculator.
Saudization and Localisation
Every company must meet its Nitaqat target and any profession quotas. IT roles have a 25% quota for companies with five or more staff in covered ICT roles.
Read the Saudization guide for the 2026 rates.
Hiring in Saudi Arabia Without Your Own Entity
An Employer of Record can employ staff in the Kingdom and handle Qiwa, the Iqama, GOSI and payroll. Staffenza’s EOR service in Saudi Arabia costs AED 899 per employee per month, plus government costs at actual cost.
For permanent hires, see our IT recruitment agency in Riyadh.
Related Guides and Tools
Saudi Labour Law FAQs
What changed in the Saudi Labour Law in 2025?
Amendments in force from 18 February 2025 set probation at up to 180 days, changed notice periods and extended maternity leave to 12 weeks. They also added paternity leave and stricter rules for labour supply companies.
What is the notice period in Saudi Arabia?
For an open-ended contract, the employer must give 60 days’ notice and the employee 30 days.
How long is probation in Saudi Arabia?
Up to 180 days, as agreed in the contract.
How much annual leave do employees get in Saudi Arabia?
Twenty-one days a year, rising to 30 days after five years with the same employer.
How much is the Iqama renewal fee?
The Iqama fee is SAR 650 a year, and can be paid for 3, 6, 9 or 12 months. The employer pays it.
How much is the expat levy in Saudi Arabia?
The work permit levy is about SAR 800 per non-Saudi worker per month. The employer pays it and must not deduct it from salary.
How is overtime paid in Saudi Arabia?
Overtime is paid at the hourly wage plus 50% of the basic hourly wage.