Saudi Arabia is raising the salary threshold for workers to count fully toward private-sector Saudization quotas by 50%, creating a stronger incentive for employers to increase wages for Saudi nationals.
#TheNewRules: Under the Nitaqat program, the qualifying monthly salary will rise from SR4,000 ($1066) to SR5,000 in April 2027, before reaching SR6,000 in April 2028.
#BehindTheNumbers: Saudi employees currently earning SR4,000 could see their monthly pay increase by SR2,000, or SR24,000 annually, if employers raise salaries to maintain full Saudization credit.
#WhyItMatters: The changes aim to encourage better-paid jobs for Saudi nationals, but they also present a financial challenge for employers.
Companies seeking to maintain full Saudization credit for affected workers could face a 50% increase in their qualifying salary costs.
#WhoPays: Employers that raise salaries will initially bear the additional payroll costs. Some may absorb them through lower margins or productivity gains, while others could pass part of the increase to customers through higher prices. Businesses may also adjust hiring plans or workforce structures.
