How to Hire Employees in Saudi Arabia: Qiwa, GOSI and Wage Protection Explained

How to Hire Employees in Saudi Arabia: Qiwa, GOSI and Wage Protection Explained

To hire employees in Saudi Arabia, a new company needs more than a signed offer letter. Each hire touches three government systems: Qiwa, the Ministry of Human Resources and Social Development (HRSD) platform where the establishment and its employment contracts are recorded; the General Organization for Social Insurance (GOSI), where employees are registered for social insurance; and Mudad, the platform through which the monthly wage protection file is uploaded. If the employee is a foreign national, visas, work permits and residency add further steps and costs.

This guide is for founders and HR or finance leads of new and foreign-owned companies that are about to make their first hires. It explains the usual order of steps after the commercial registration, what the employment contract must record, how wage protection works, the Labor Law rules on probation, working hours and end of service, and a 30-day onboarding checklist. If your company is still being formed, start with our guide to business setup in KSA, then come back to this one before the first salary is paid.

Table of Contents

• The order of steps to hire employees in Saudi Arabia
• Employment contracts on Qiwa: what must be documented
• GOSI registration for employers
• The Wage Protection System and Mudad
• Probation, working hours and end-of-service award
• Hiring foreign employees and meeting Saudization requirements
• 30-day onboarding checklist and common mistakes

The order of steps to hire employees in Saudi Arabia

The systems are linked, so the order matters. HRSD's wage protection service, for example, lists registration with the Ministry, registration with GOSI and bank accounts for both the establishment and every employee as conditions for uploading a wage file. A practical sequence for a new company looks like this:

1. Commercial registration and licences in place. Labour and insurance files can only be opened for an existing establishment.
2. Establishment file on Qiwa. The owner or an authorised manager signs in and activates the establishment. HRSD's contract service requires the establishment to be active before any contract can be created.
3. GOSI employer registration. Register the establishment and its main branch, and record the owner or authorised representative.
4. Corporate bank account and payroll set-up. Salaries are paid into employees' bank accounts, so the company account and payroll process should be ready before the first month closes.
5. Mudad account. Link the establishment to Mudad so the monthly wage protection file can be uploaded and compliance status checked.
6. Visas and work permits (foreign hires only). Apply for visa quotas, work permits and residency through the relevant Qiwa and government services, and budget for the fees.
7. Contract documentation on Qiwa. Create each employee's contract on Qiwa and send it for the employee's approval.

Some steps run in parallel; confirm current requirements on each platform before you start.

Employment contracts on Qiwa: what must be documented

HRSD's Contract Management service lets an establishment create and document employment contracts electronically. The employer enters the contract data, including job title, contract duration, working hours and financial obligations, and sends the request to the employee. The employee reviews it in the Qiwa individuals account and can approve, reject or ask for changes. Once both parties agree, the contract is treated as documented and approved by the Ministry.

Two conditions apply: the establishment must be active, and the employee must not already hold a valid contract on Qiwa.

Why documentation matters

• It is an employer obligation. HRSD's employer compliance guide treats failure to document workers' contracts electronically as a violation subject to fines.
• It affects access to services. In August 2024, HRSD announced that establishments documenting 80% or more of their employees' contracts can fully access Ministry services such as visa issuance, service transfers and profession changes.
• It supports Saudization records. Contract data feeds the records used to measure your workforce, so gaps can distort your position.

Beyond the Qiwa fields, write down the terms that commonly cause disputes: basic wage and each allowance, the wage payment date, probation (if any), place of work, notice terms and benefits such as medical insurance. If the contract does not set a payment date, HRSD's compliance guide treats the first day of each month as the due date for monthly wages.

GOSI registration for employers

Social insurance registration is not optional. HRSD's employer compliance guide requires employers to register their Saudi workers with social insurance, to register only people who have a real employment relationship and actually work, and to remove a worker from the register within two weeks after the employment relationship ends. Registering Saudi nationals without genuine work, for example to improve Saudization figures, is listed as a violation.

Contributions are shared between employer and employee for some branches of coverage and paid by the employer alone for others. The applicable rates differ for Saudi and non-Saudi employees and depend on the employee's registration date and coverage, so take them from GOSI's current published schedule rather than from third-party summaries, which often disagree. Practical points for a new employer:

• Register from day one. Add each employee to GOSI when the employment starts, using the same wage figures as the Qiwa contract.
• Keep wage data consistent. The wage protection file is processed against social insurance records, so differences between GOSI, Qiwa and payroll can lower your compliance rate.
• Close records promptly. When an employee leaves, update GOSI within the two-week window.

The Wage Protection System and Mudad

The Wage Protection System (WPS) lets HRSD check that private-sector employees are paid in full and on time. The HRSD wage protection file upload service describes an electronic, sealed file containing pay and reconciliation data for registered employees. The file is uploaded through the compliance system in Mudad, which has replaced the Ministry's earlier upload route. Mudad processes the file against social insurance records and updates the establishment's compliance rate immediately; the owner or authorised representative can review that rate and explain any irregularities.

Salaries are paid through banks because the Labor Law requires wages and dues to be paid in Saudi riyals into the worker's approved bank account on the due date, and wages may not be withheld without a legal basis. A bank transfer creates an audit trail that the WPS file can be checked against. HRSD states that WPS applies to private establishments in stages, so confirm whether and from when your establishment is obligated.

• Set up payroll before the first payday. Open bank accounts for new employees early; an employee without an account is a common reason a file fails.
• Reconcile before uploading. Match each employee's wage in the file to the Qiwa contract and GOSI record.

An accounting partner can help keep payroll, GOSI and WPS figures aligned. Our accounting management services in Saudi Arabia cover bookkeeping and financial reporting that payroll depends on.

Probation, working hours and end-of-service award

Three Labor Law topics shape most first-year HR decisions. HRSD publishes summaries of each, and the 2024 Labor Law amendments, with Executive Regulations in force from 19 February 2025, changed some details, so check the current text when drafting contracts.

Probation

Probation must be clearly stated in the written contract. According to HRSD's guidance, any extension needs prior written agreement, and the original period plus extensions may not exceed 180 days. Eid holidays and sick leave are not counted towards the period. If the contract ends during probation, neither party is entitled to compensation, and no end-of-service award is due. A worker generally cannot be placed on probation twice with the same employer, unless the second period relates to a different job or at least six months have passed since the earlier relationship ended.

Working hours

HRSD's summary of actual working hours under Article 98 sets a limit of 8 hours a day under the daily standard or 48 hours a week under the weekly standard. During Ramadan, hours for Muslim workers are reduced to no more than 6 hours a day or 36 hours a week. Overtime is paid at the hourly wage plus 50% of the basic wage. The employer must also give rest, prayer and meal breaks and a weekly rest day at full pay.

End-of-service award

HRSD's end-of-service award guidance sets the award at half a month's wage for each of the first five years and one month's wage for each later year, calculated on the last wage, with part-years counted pro rata. If the employee resigns, the award is reduced: nothing for less than two years of service, one third for two to five years and two thirds for five to ten years. Finance teams should accrue this liability monthly.

Hiring foreign employees and meeting Saudization requirements

Recruiting from abroad adds visas, work permits and residency (iqama). HRSD's compliance guide makes the employer responsible for the costs of recruiting a non-Saudi worker, residence and work permit fees and their renewals, late-renewal fines, profession changes, exit and re-entry, and the return ticket at the end of the relationship. These costs cannot be passed on to the worker. Each foreign employee must also work in the profession recorded on the work permit.

Your ability to obtain visas depends on your Saudization (Nitaqat) position, which compares the share of Saudi nationals in your workforce with the band set for your activity and size. Rather than repeat the rules here, read our Saudization and Nitaqat guide for employers before you plan the mix of Saudi and foreign hires. Decide early whether your first hires will include Saudi nationals, because that choice affects visa access from the outset.

30-day onboarding checklist and common mistakes

Use this checklist for each new hire, starting from the agreed start date.

• Before day 1. Confirm the establishment is active on Qiwa and registered with GOSI; confirm the candidate has no active contract with another employer; for foreign hires, confirm the visa and work permit status.
• Days 1 to 5. Create and send the Qiwa contract; register the employee with GOSI using the same wage; collect bank details or support the employee in opening an account; issue the internal policies and job description.
• Days 6 to 15. Check the employee has approved the Qiwa contract; set up the payroll record with basic wage, allowances and deductions; record probation dates, excluding Eid holidays and sick leave; arrange medical insurance and any required residency steps.
• Days 16 to 30. Run a payroll reconciliation across Qiwa, GOSI and the payroll file; pay the salary by bank transfer on the contractual date; upload the wage protection file in Mudad; check the compliance rate; start the monthly end-of-service accrual.

Common mistakes

• Paying before documenting. Paying salaries while the Qiwa contract is unsigned leaves the relationship unrecorded and can affect service access.
• Different wages in different systems. A basic wage in GOSI that does not match the contract or WPS file is a frequent source of compliance flags.
• Cash salaries. Wages paid in cash or to third-party accounts do not meet the bank-payment requirement.
• Charging visa costs to employees. Recruitment and permit fees are employer costs.

Labour rules and platform procedures change regularly, so confirm the current requirements with HRSD, GOSI or a qualified adviser before you act. Our regulatory compliance support for new businesses in Saudi Arabia and outsourced bookkeeping for startups and SMEs can help you set up these processes in the right order.

Frequently Asked Questions

Planning your first hires in Saudi Arabia? Contact Sokrab Saudi Arabia today.