Saudization and Nitaqat Basics for New Entities

The short answer

Nitaqat is the Ministry of Human Resources program classifying establishments — Platinum, High/Medium/Low Green, and Red — by their Saudization ratios. From 15 April 2026 the calculation rests on employment contracts electronically documented via Qiwa. The count is graduated: SAR 4,000 or more is a full worker, SAR 3,000 up to under 4,000 is half, and below SAR 3,000 is not counted. The band minimum is not fixed but rises with the entity's size under a published formula, and profession localisation decisions run in parallel, unaffected by the establishment's band.

5 min read

The "Developed Nitaqat" program is the primary mechanism through which the Ministry of Human Resources and Social Development manages workforce localization in the private sector. Every new establishment that hires — from its very first employee — enters this framework and is classified by its localization ratios. This page sets out the counting and classification basics in neutral compliance framing, as part of the business section on Hala Law, and pairs with the hiring your first employee page.

From 15 April 2026: the calculation runs on authenticated Qiwa contracts

The Ministry announced that the calculation methodology now rests on employment contracts electronically documented via the Qiwa platform, effective from 15 April 2026, based on Council of Ministers Resolution No. 195 dated 4/4/1443 AH, which assigned the Ministry the regulation of the contractual relationship and oversight of contract documentation. The Ministry stated that documenting Saudi employees' contracts through Qiwa is a fundamental requirement for their inclusion in Saudization ratios. The practical effect is clear: authentication is no longer a formality — it is the condition for a Saudi employee to appear in the establishment's metrics at all.

Wage floors: the count is graduated, not binary

The ministerial decision does not set a single floor; it assigns different weights — and that is what changes a hiring decision in practice:

Case of the Saudi employee	Weight in the localization ratio
Monthly wage of SAR 4,000 or more	One full worker
Wage of SAR 3,000, or more than 3,000 and less than 4,000	Half a worker
Wage below SAR 3,000	Not counted
Part-time (social insurance contributions paid, minimum SAR 3,000)	Half a worker, and not counted for more than two entities
Flexible work (168 work hours completed, contributions paid)	One third of a worker

The decision covers Saudi students resident in the Kingdom working regular part-time hours, permanent part-time workers, and flexible-work workers. These floors change with subsequent decisions.

The bands, and what each one triggers

The 2026 procedural guide orders the bands as Platinum, High Green, Medium Green, Low Green, and then Red for an entity that has not reached the Low Green minimum. The guide contains no Yellow band.

The point most establishments miss is that restrictions begin before Red: Low Green already stops new visa requests and stops expatriate profession-change requests, while the ability to renew existing work permits remains. Being "in the Green" does not necessarily mean you can recruit.

Red, in the guide, carries five restrictions rather than two:

No change of professions for the expatriate labour already employed.
No transfer of expatriate services into the establishment.
No new visa requests.
No issuance of work permits for new expatriate labour.
No renewal of work permits for the expatriate labour already employed.

Note also that immediate counting in Nitaqat is listed among the services of the other four bands and does not appear among the services of the Red band.

How the required minimum is derived

The guide states the formula explicitly: y = m log(x) + c, where y is the band minimum, x is the entity's total workforce, and m and c are constants per band and per economic activity in the guide's annex. Two practical consequences follow:

What is required of you rises with your size — every increase in total workforce raises the minimum for the same band.
The annex constants are listed for three years (2026, 2027 and 2028) and rise year on year for most activities, so holding the same ratio can drop an establishment a band without any change in its headcount.

The calculation runs at entity level, not branch level: the entity represents all branches of the same economic activity owned by one establishment.

Profession quotas: a track independent of the band

Profession localisation decisions run in parallel with Nitaqat, and the Ministry's statement in the accounting-professions FAQ is explicit: an establishment's Nitaqat band does not affect the calculation of a profession's localisation ratio. An establishment can sit in a comfortable band and still face penalties under a profession decision.

Marketing professions (decision 101319): a 60% rate on establishments with three or more workers in the professions listed in the decision's table, and a floor of SAR 5,500 for the wage registered with social insurance — a Saudi earning less is not counted in this decision's ratio. The decision issued on 19/01/2026 and took effect after a three-month grace period on 19/04/2026.

Accounting professions (decision 103108): a rate graduated across five phases on establishments with five or more accountants — 40% from 27/10/2025, then 50% from 27/10/2026, then 60% from 27/10/2027, then 70% from 27/10/2028 — followed by a fifth phase at 30% from 27/10/2029 for establishments with three or four accountants. SOCPA professional accreditation is required, and an unaccredited accountant is not counted at all. The wage floor is SAR 6,000 for bachelor's holders and SAR 4,500 for diploma holders.

Where the same profession is targeted by decisions with different rates, the higher rate applies.

How the classification is tracked in practice

Track the establishment's band through the Qiwa dashboard, and find the number of Saudis needed via the interactive Nitaqat guide service.
Confirm that every Saudi employee's contract is electronically authenticated on Qiwa — an unauthenticated contract does not enter the calculation.
Meet Wage Protection System requirements, where payroll data is matched against WPS.
Keep GOSI enrollment and the wage registered there current, because profession decisions verify wages and professional accreditation through technical integration with the supervisory bodies.

The Ministry states in its FAQ that a worker's weight is counted immediately on registration for all establishments, within the weekly Nitaqat update. The effect of a hire appears in the next weekly update, not months later.

The data the calculation runs on

The calculation relies on payroll data matching the Wage Protection System, electronically authenticated Qiwa contracts, active GOSI enrollment logs, and the professional titles registered in the GOSI database — because profession decisions apply to the registered job title and to the worker's actual work together. There is no explicit regulatory fee for the program itself; the true cost lies in designing compensation to meet the wage floors set out above. These obligations connect to the wider labor rights framework covering contracts and wages.

When do you need a licensed lawyer or advisor?

The information above is a general framework in neutral compliance terms, not an assessment of any specific establishment. Compliance here rests on detailed profession quotas that vary by activity and by decision, so engaging a licensed lawyer or accredited advisor becomes most relevant when:

The establishment falls into the Red band and suspension decisions follow, requiring an understanding of the grounds and the statutory remedies.
A dispute arises over how a specific employee is counted or how a contract is authenticated on Qiwa.
Localization questions intersect with ongoing labor disputes, where the position turns on facts and documents assessed case by case.

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Frequently asked questions

Does a Saudi employee on a paper contract count toward Saudization ratios?

No. The Ministry of Human Resources and Social Development announced that the Nitaqat calculation rests on employment contracts electronically documented via the Qiwa platform **effective from 15 April 2026**, and that documenting Saudi employees' contracts through the platform is a fundamental requirement for their inclusion. The update is based on Council of Ministers Resolution No. 195 dated 4/4/1443 AH.

What is the minimum wage for a Saudi employee to count as one full employee?

The count is graduated, not binary, and that changes a hiring decision. The ministerial decision states: **SAR 4,000 or more** counts as one full worker; **SAR 3,000, or more than 3,000 and less than 4,000**, counts as **half**; and a wage **below SAR 3,000 is not counted at all**. A part-time worker counts as half provided social insurance contributions are paid and at a minimum of SAR 3,000, and is not counted for more than two entities. A flexible-work worker counts as **one third**, provided 168 work hours are completed. Thresholds change with subsequent decisions.

Is there a Yellow band?

The 2026 procedural guide names no Yellow band: its bands are Platinum, High Green, Medium Green and Low Green, then Red for an entity below the Low Green minimum. More importantly, restrictions do not begin at Red — Low Green already stops new visa requests and profession-change requests, while renewal of existing work permits remains available.

What exactly does the Red band trigger?

The guide lists five restrictions: no change of professions for expatriate labour, no transfer of expatriate services into the establishment, no new visa requests, no issuance of work permits for new expatriate labour, and no renewal of existing work permits. Note also that immediate counting is listed among the services of the other four bands and does not appear among Red's.

Is the establishment's overall ratio enough?

No. Profession localisation decisions run in parallel with Nitaqat, and the Ministry states in the accounting-professions FAQ that an establishment's Nitaqat band does not affect the calculation of a profession's localisation ratio. Marketing professions, for instance, carry a 60% rate for establishments with three or more workers in those professions at a SAR 5,500 wage floor, while accounting professions are at 40% now, rising to 50% on 27/10/2026, for establishments with five or more accountants. Where one profession is targeted by two decisions at different rates, the higher applies.

How long before a Saudi hire shows up in the classification?

The Ministry states in the Developed Nitaqat FAQ that a worker's weight is counted immediately on registration for all establishments, within the weekly Nitaqat update. The effect appears in the following weekly update.

Why might an establishment's band change without its headcount changing?

Because the band minimum is not a fixed number. The guide states the formula y = m log(x) + c, where x is the entity's total workforce — so what is required rises with size. The annex constants are also listed for three years (2026, 2027 and 2028) and rise year on year for most activities. And the calculation runs at entity level, the entity representing all branches of the same economic activity, rather than per branch.

Are there government fees for the Nitaqat program?

There is no explicit regulatory fee for the program itself; the true cost lies in designing compensation to meet the wage floors described — SAR 4,000 for a full count in Nitaqat, SAR 5,500 in marketing professions, and SAR 6,000 or SAR 4,500 in accounting professions depending on qualification. Thresholds change with subsequent decisions.

Official sources

Source	Article / reference	As of
Ministerial decision raising the minimum wage counted for Saudis in Nitaqat — Ministry of Human Resources and Social Development	Text of the decision: a Saudi employee counts as one worker only where the monthly wage is at least SAR 4,000; one earning SAR 3,000, or more than 3,000 and less than 4,000, counts as half; one earning less than SAR 3,000 is not counted; a part-time worker counts as half provided social insurance contributions are paid and at a minimum wage of SAR 3,000, and is not counted for more than two entities; a flexible-work worker counts as one third provided 168 work hours are completed and contributions are paid	2026-07-26
Procedural guide to the Developed Nitaqat programme — Ministry of Human Resources and Social Development	Four bands plus Red: Platinum, High Green, Medium Green, Low Green; the band minimum is y = m log(x) + c where x is the entity's total workforce, and the constants rise across 2026, 2027 and 2028; Low Green stops new visa requests and profession-change requests; Red bars profession changes, transfers of expatriate services into the entity, new visa requests, issuance of work permits for new expatriate labour, and renewal of existing work permits	2026-07-26
Electronic authentication of employment contracts via Qiwa as a requirement for counting Saudization ratios in Nitaqat — Ministry of Human Resources and Social Development	Saudization ratios under Nitaqat are calculated on employment contracts electronically documented via the Qiwa platform, effective from 15 April 2026, based on Council of Ministers Resolution No. 195 dated 4/4/1443 AH; documenting Saudi employees' contracts is a fundamental requirement for their inclusion	2026-07-26
Procedural guide to the marketing-professions localisation decision No. 101319 — Ministry of Human Resources and Social Development	A 60% localisation rate on establishments with three or more workers in the listed marketing professions; a Saudi is counted only where the wage registered with social insurance is at least SAR 5,500, and one earning less is not counted at all under this decision; issued 19/01/2026 and effective after a three-month grace period on 19/04/2026	2026-07-26
Procedural guide to the accounting-professions localisation decision No. 103108 — Ministry of Human Resources and Social Development	Five phases: 40% from 27/10/2025, 50% from 27/10/2026, 60% from 27/10/2027 and 70% from 27/10/2028 on establishments with five or more accountants, then 30% from 27/10/2029 on establishments with three or four; SOCPA professional accreditation is required and an unaccredited accountant is not counted; the wage floor is SAR 6,000 for bachelor's holders and SAR 4,500 for diploma holders	2026-07-26
Developed Nitaqat frequently asked questions — Ministry of Human Resources and Social Development	A worker's weight is counted immediately on registration for all establishments, within the weekly Nitaqat update; the calculation is performed at entity level, the entity representing all branches of the same economic activity owned by one establishment	2026-07-26

Change log

2026-07-26Full review of the page against primary sources, after most of its statements had rested on an unnamed collective attribution. The most important correction: withdrew the claim that the classification is calculated on a 26-week rolling average — the Developed Nitaqat FAQ states that a worker's weight is counted immediately on registration within the weekly update, and neither a week nor an average appears anywhere in the 2026 procedural guide. Dated the Qiwa-authenticated-contract requirement to 15 April 2026 with its basis in Council of Ministers Resolution No. 195. Completed the wage table from the text of the ministerial decision: a wage below SAR 3,000 is not counted at all, and flexible work counts as one third on 168 hours. Corrected the SAR 5,500 floor from being described as a sector to what it is: the marketing-professions decision No. 101319 at 60% for establishments with three or more workers in those professions, effective 19/04/2026 — this also resolves the note that the figure could not be verified. Corrected the accounting quota: five accountants rather than five workers, and it is phase one of five, rising to 50% on 27/10/2026, with SOCPA accreditation required and wage floors of SAR 6,000 and SAR 4,500. Expanded the Red-band consequences from two to five, and added that Low Green already stops new visas. Added the guide's formula y = m log(x) + c, the constants rising through 2028, and entity-level calculation. Dropped the unsourced inference about the Yellow band being eliminated.
2026-07-26Removed a redundant non-official consultancy source: what it was cited for — Developed Nitaqat criteria, wage thresholds and professional ratios — is covered by the Ministry of Human Resources procedural guide already cited on this page.
2026-07-06First edition

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