Saudi Labour Law - a payroll and HR guide

GOSI, WPS via Mudad, Qiwa contracts and end-of-service under Articles 84-85 - organised for payroll.

Saudi payroll runs to the Labour Law and three government systems around it. This guide sets out each one, the contributions, and how end-of-service is earned.

Governing lawSaudi Labour Law (end-of-service under Articles 84-85)

The authorities this payroll answers to

  • RegulatorHRSD - Ministry of Human Resources
  • ContributionsGOSI - social insurance
  • ContractsQiwa - contract registration
  • Wage reportingMudad - Wage Protection System
  • NationalisationNitaqat - Saudisation
  • TaxNo personal income tax

01The systems a Saudi payroll answers to

GOSI collects social-insurance contributions on basic plus housing (capped at SAR 45,000). Qiwa is where employment contracts must be registered to be enforceable. Mudad is the Wage Protection System - wages are transferred and reported through registered Saudi bank accounts, and what Qiwa, Mudad and GOSI hold must agree.

02Working hours and leave

The standard week is 48 hours (reduced during Ramadan for Muslim employees), overtime is paid at 150% of the hourly wage, and annual leave is at least 21 days rising to 30 after five years of service. These are statutory minimums; a contract may grant more.

03End of service (Articles 84-85)

The gratuity is half a month per year for the first five years and a full month per year after, based on the last wage - with the resignation reduction (0 / one-third / two-thirds / full) shown on our end-of-service calculator.

04Saudisation (Nitaqat)

Private-sector employers must meet Saudi-national employment ratios under the Nitaqat programme; the band an employer sits in affects its ability to issue and renew work permits. Payroll and headcount data feed the classification, so the two cannot be run apart.

At a glance

  • Working week48 hours
  • Overtime150%
  • Annual leave21 → 30 days
  • GOSI base capSAR 45,000

Read this precisely: this is an orientation, not legal advice, and the Labour Law is amended periodically (most recently the amendments effective 19 February 2025). Confirm current provisions with HRSD or a qualified adviser before acting.

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