Saudi Arabia Tightens Nitaqat Contract Rules
Saudi employers face tighter rules for counting nationals under Nitaqat, with Qiwa introducing limits linked to employees’ contract histories. Saudi workers must meet contract, salary and employment-status requirements to continue counting towards an employer’s Saudisation levels.
Saudi employers will need to pay closer attention to employees’ contract histories under tightened rules governing how Saudi nationals are counted within the Nitaqat Saudisation programme.
Under the mechanism finalised through the Ministry of Human Resources and Social Development’s Qiwa platform, a Saudi employee must have no more than five employment contracts during the preceding 52 weeks to continue being counted as one Saudi employee under Nitaqat.
The change makes contract history another factor HR teams need to consider when managing Saudisation compliance.
Five Contracts Is Not the Only Requirement
Simply remaining within the five-contract threshold does not automatically mean an employee qualifies for Nitaqat calculations.
The worker must also have a valid employment contract registered through Qiwa and a total registered monthly salary of at least SAR4,000.
Employees classified as part-time workers or students do not qualify to be counted as one full Saudi employee under the mechanism.
For employers, this means Nitaqat workforce planning increasingly requires attention to the quality and status of employment records rather than simply the number of Saudi nationals on the payroll.
Another Limit Applies After Seven Contracts
Qiwa has also clarified a separate rule governing how many employment contracts a Saudi worker can enter into over a year.
A Saudi employee cannot be issued another employment contract after entering into more than seven contracts within a 365-day period, calculated from the date of the first contract.
An eighth contract cannot be issued until a full year has passed from the date of the first contract within the period in which the threshold was exceeded.
This is separate from the five-contract Nitaqat rule.
In practical terms, the five-contract threshold determines whether an employee continues to count as one Saudi employee for Nitaqat purposes, while the seven-contract restriction concerns whether another employment contract can be issued.
Two Active Contracts Maximum
There is another restriction employers need to watch.
Saudi employees can hold no more than two employment contracts simultaneously. A worker who already has two active contracts must terminate one before entering into another employment agreement.
Together, the measures place greater importance on accurate employment records within Qiwa.
For HR teams, the key takeaway is therefore not simply that Saudi Arabia has introduced a “five-contract cap.” Employers need to distinguish between Nitaqat eligibility, annual contract limits and simultaneous employment restrictions when hiring Saudi nationals and calculating their Saudisation position.
With Qiwa increasingly central to employment-contract administration, keeping employee records accurate and monitoring contract histories will be important for organisations seeking to avoid unexpected changes to their Nitaqat calculations.
Sources: Saudi Ministry of Human Resources and Social Development (MHRSD); Qiwa; Saudi Gazette; Gulf Business
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