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Saudi raises private sector minimum wage for local employees: Saudi-based private employers will need to pay their Saudi workers a minimum of SAR 5k per month starting 25 April 2027, and SAR 6k a year later in order to count their employment towards the Nitaqat, the Kingdom’s compliance system for Saudization, Human Resources Development Fund (HRDF) said last week. The minimum wage threshold currently stands at SAR 4k — way behind the average monthly salary of SAR 9.5k as of 2Q this year.
The HRDF move comes on top of a wider citizen-support package King Salman ordered last week, which included cash transfers to support citizens against electricity and water tariff hikes.
Why this matters: Private-sector companies must meet Nitaqat compliance in order to qualify for the HRDF’s wage subsidies — the incentives system the Kingdom put in place to encourage firms to hire more Saudis rather than take on non-compliance fines. The scheme covers up to 50% of monthly pay, capped at SAR 3k.
Raising the compliance minimum wage may help Saudi address stalled Saudization rates on lower-skill roles. Most of the Saudization gains this year have been concentrated in high-skill roles where pay already clears the new ceiling.
It’s hard to gauge how many Saudis will benefit from the new salary bump. We know some 68% of the 2.7 mn Saudis employed in the private sector are in the SAR 4-8k wage cluster, but there’s no breakdown of how many are in the SAR 4-5K bracket. When the floor first moved from SAR 3k to SAR 4k in 2021, about 700k — some 39% of the 1.8 mn citizens employed then in the private sector — saw salary increases.
BACKGROUND- The Kingdom has been steadily expanding Saudization quotas in the last two years. In April, it expanded profession-specific quotas across 269 roles and rolled out mandatory contract documentation on the Qiwa platform, and a separate April directive extended the 100% Saudization mandate to 69 job types. Since then, foreign talent premiums have been narrowing, and GCC employers have pivoted toward more local hiring amid regional uncertainty.
