King Salman, Custodian of the Two Holy Mosques, has announced major labor and economic reforms in a royal decree issued under the guidance of Crown Prince and Prime Minister Mohammed bin Salman. The measures are aimed at strengthening the financial security of Saudi citizens.
The central change concerns the private sector Nitaqat program. Saudi employees must now earn a baseline minimum wage of SR5,000 to count fully toward nationalization quotas. The threshold takes effect in six months and rises to SR6,000 twelve months later.
Nitaqat wage threshold and private sector impact
The decree says the higher threshold is meant to raise career standards, lift local wage levels and support long-term employment across private enterprises. Businesses across the kingdom must now restructure their compensation frameworks and compliance strategies to match the new Nitaqat benchmarks.
Utility tariff changes and SR500 monthly allowance
The labor changes coincide with planned utility updates. The Saudi Energy Company and the National Water Company are scheduled to adjust electricity and water consumption tariffs from January 1, 2027.
To protect household purchasing power, the royal package provides a direct monthly allowance of SR500. The support extends to civil service and military personnel, public sector program workers, retirees, social insurance beneficiaries and families enrolled in the national social security system.
Balancing workforce development and economic stability
Together, the measures are presented as part of Saudi Arabia’s ongoing commitment to economic stability and workforce development. The initiative is also intended to support the kingdom’s broader development goals and a resilient, equitable domestic market.
