Saudi Arabia Introduces New Saudization Rules With SAR 8,000 Minimum Wage for Engineers
Earlier this week, Saudi Arabia announced updated Saudization regulations introducing a minimum monthly salary of SAR 8,000 for engineers, marking a notable shift in the Kingdom’s workforce localisation policy. The changes were issued by the Ministry of Human Resources and Social Development and will take effect following a defined transition period in 2026.
The revised rules form part of Saudi Arabia’s broader labour market reforms and are expected to impact private sector companies operating in engineering-driven industries such as construction, manufacturing, energy, infrastructure, and technology.
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What is Saudization?
Saudization, also known as “Nitaqat”, is a national initiative designed to increase employment opportunities for Saudi citizens in the private sector. By encouraging companies to hire local talent, the programme aims to reduce reliance on expatriate workers while building a skilled and sustainable workforce in key industries.
Over the years, Saudization has evolved to include sector-specific targets and incentives, making it a core part of Saudi Arabia’s economic diversification strategy.
Key Updates in the New Saudization Rules
The MHRSD’s latest reforms introduce two major changes for engineering firms:
- Higher Saudization Rate: The quota for Saudi engineers has been raised to 30% for private companies with five or more engineering employees.
- Minimum Wage Requirement: Saudi engineers must earn at least SAR 8,000 per month (≈ USD 2,133) to count toward the Saudization quota.
These measures, phased in since 2024, ensure localisation is coupled with competitive compensation, attracting top talent into the private sector.
Who Will Be Impacted and How Companies Should Prepare
The new Saudization rules apply to all private companies that employ five or more engineers. Immediate action is required to review workforce composition and salary structures.
| Action Area | Required Step | Why It Matters |
|---|---|---|
| Workforce Audit |
Assess the current percentage of Saudi engineers and salaries. Identify gaps against the 30% quota and SAR 8,000 threshold. |
Prevents last-minute non-compliance and penalty risks. |
| Salary Adjustment | Raise the salaries of Saudi engineers to meet the minimum wage. | Non-compliant employees will not count toward Saudization. |
| Recruitment Strategy | Hire qualified Saudi engineers to meet the quota. | Ensures timely compliance and talent quality. |
| Support | Use MHRSD and HADAF incentives for training and hiring. | Reduces recruitment cost and develops Saudi talent. |
Benefits of the SAR 8,000 Minimum Wage for Saudi Engineers
The wage reform benefits both workers and the broader economy:
- Attracting Top Talent: Competitive salaries encourage more Saudi youth to pursue engineering careers.
- Economic Stability: Higher wages boost household income and domestic consumption.
- Quality over Quantity: Employers prioritise skilled, productive engineers rather than only meeting quotas.
- Alignment with Vision 2030: Supports a vibrant society and a thriving, knowledge-based economy.
Challenges, Compliance, and Next Steps for Businesses
While beneficial, the reforms present operational challenges:
- Increased Costs: Companies relying on lower-cost labour may face higher expenses.
- Talent Shortages: Some specialities may have limited Saudi professionals initially.
- Compliance Risks: Non-adherence can result in fines, service suspensions, or work permit issues.
Next Steps for Businesses
- Certification: Ensure Saudi engineers are registered with the Saudi Council of Engineers (SCE).
- Training Programmes: Upskill existing employees and develop internal talent pipelines.
- University Partnerships: Collaborate with local technical institutes for long-term recruitment.
By acting now, companies can turn the new Saudization rules into an opportunity, build skilled Saudi engineering talent, boost productivity, and align with Vision 2030, all while remaining fully compliant.
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