Why MHRSD is raising the Nitaqat minimum wage thresholds
The Ministry of Human Resources and Social Development (MHRSD) has announced a structured, phased increase in the minimum monthly salary required for a Saudi national employee to count toward a company's Saudization quota in the Nitaqat system.
The initiative is designed to incentivize fair market wages, stimulate career progression for national talent, and curb nominal or fictitious Saudization (*Al-Saudada Al-Wahmiyya*) where workers were registered at substandard wages solely for quota compliance.
The phased implementation schedule: 2027 and 2028
The salary threshold increments will roll out in two distinct statutory stages:
Current Baseline (Until March 2027): A Saudi worker must earn at least SAR 4,000 monthly to count as one full employee (1.0) in Nitaqat. Workers earning between SAR 3,000 and SAR 3,999 count as half an employee (0.5).
Phase 1 (Effective April 2027): The wage floor rises to SAR 5,000 for a full 1.0 worker weight. Workers earning between SAR 3,000 and SAR 4,999 will count as 0.5.
Phase 2 (Effective April 2028): The wage floor rises to SAR 6,000 for a full 1.0 worker weight. Workers earning between SAR 3,000 and SAR 5,999 will count as 0.5.
Any employee whose basic wage is below SAR 3,000 will not be calculated in the establishment’s localization score under any circumstances.
The five covered employment categories and calculation rules
The MHRSD regulatory framework applies these wage benchmarks across five specific labor categories:
1. Full-Time Saudi Employees: Standard GOSI-registered workers must meet the full salary floor to count as 1.0.
2. Part-Time Saudi Employees: Must earn at least half the statutory wage floor and log a minimum of 80 hours per month to count as 0.5.
3. Flexible Work Contracts: Workers on hourly flexible contracts (registered via the official MRN platform) must accumulate 168 hours of verified work per month to equal one worker month.
4. Student Workers: Saudi university or high school students employed by commercial establishments must receive at least SAR 3,000 to count as 0.5 in the establishment's ratio.
5. Persons with Disabilities Capable of Working: Eligible disabled Saudi employees receive an enhanced weighting multiplier of up to 4.0 workers in Nitaqat, provided their monthly wage meets the updated statutory floor.
Impact on private establishments and expatriate work permits
Establishments that fail to adjust their payrolls to match the new salary floors by the respective implementation dates will see their Nitaqat scores drop automatically on Qiwa.
A drop in Nitaqat ranking from Green to Yellow or Red leads to immediate operational penalties: frozen block visa allocations, inability to issue new expatriate work permits, and restrictions on renewing Iqamas for existing foreign staff.
How employers should audit their Wage Protection System data
Human resources managers and financial controllers should review their payroll systems and GOSI registration records well before April 2027:
Audit the registered basic salary plus housing allowance for all Saudi personnel. Ensure that contracts are synchronized on Qiwa and Wage Protection System (WPS) bank files reflect compliant wage disbursements to prevent sudden Nitaqat rating downgrades.