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Saudi Arabia Labour Contracts: Fixed-Term vs Unlimited Rules and Qiwa Contract Registration for Employers

Saudi Arabia's Labour Law (Royal Decree M/51 of 2005) was amended by changes that took effect roughly 180 days after Gazette publication, in February 2025. The law recognises two contract types - limited (fixed-term) and unlimited (indefinite) - set out in Articles 37 and 50-57. Under Article 55(2), a fixed-term contract with a renewal clause automatically converts into an unlimited contract once it has been renewed three consecutive times, or once the original term plus renewals reaches four years, whichever is less, and the parties keep working together; non-Saudi employees are carved out of this conversion under Article 37, which the 2025 amendment revised so that an expatriate's contract with no stated term now defaults to one year from the job-start date and renews automatically for the same period. Employers must create and document every employment contract electronically through the Ministry of Human Resources and Social Development's (HRSD) Qiwa platform using its standard model contract form (Article 52). HRSD also requires establishments to document a rising share of their contracts on Qiwa - 85% by 30 April 2026 and 90% by 30 June 2026, per the compliance phase confirmed in the sources reviewed - and states that establishments falling short may face restricted access to ministry services tied to their compliance indicators, though the specific services affected are not named in the sources reviewed.

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Steps

Choose the contract type - Decide whether the role is a limited (fixed-term) or unlimited (indefinite) contract; under Article 37, non-Saudi employees must be engaged on a written fixed-term contract, while Saudi nationals may be offered either type.
Draft the contract on HRSD's standard model - Per Article 52, the contract must follow the Ministry's standard model form, stating employer and employee details, wage and benefits, job title and location, start date, and duration if fixed-term; in practice, the Arabic-language version of bilingual official Saudi contracts is generally treated as authoritative, though this specific precedence rule was not confirmed within Article 52's own text during review.
Create and send the contract via Qiwa - Sign in to Qiwa, select the establishment, open the 'Contract Management and Documentation' service, complete the establishment's and employee's information plus contract data (job title, duration, hours, financial obligations), then send it to the employee - per HRSD's published service steps.
Employee reviews and approves in Qiwa - The employee approves, rejects, or requests amendments to the contract from their own Qiwa account; once both parties agree the contract is considered certified and documented by HRSD. HRSD lists the service duration as immediate once both sides approve.
Track renewals against the conversion trigger - If the contract has a renewal clause, log each renewal: under Article 55(2), three consecutive renewals or four years of combined service, whichever is less, automatically converts a Saudi employee's fixed-term contract into an unlimited one; expatriate contracts remain fixed-term under Article 37.
Maintain establishment-wide Qiwa documentation compliance - HRSD measures what share of each establishment's contracts are documented on Qiwa and has set rising thresholds - 85% by 30 April 2026, 90% by 30 June 2026, per the phase confirmed in the KPMG alert cited here. HRSD states shortfalls can restrict the establishment's access to ministry services tied to its compliance indicators, though the specific services affected (e.g., visa or Iqama processes) are not enumerated in the sources reviewed.

Timeline

Creating and certifying an individual contract on Qiwa is listed by HRSD as immediate once both employer and employee approve it online. Separately, HRSD's compliance mandate requires establishments to have 85% of all employee contracts documented on Qiwa by 30 April 2026, rising to 90% by 30 June 2026, per the compliance phase confirmed in the KPMG alert cited here; whether HRSD ran earlier phases with different thresholds, or will introduce further phases after June 2026, could not be confirmed from the sources reviewed, so employers should check their current Qiwa compliance dashboard for the phase that applies to them.

Cost & fees

No government fee is listed on HRSD's own service page for creating/documenting a contract through Qiwa's 'Contract Management and Documentation' service. Qiwa-linked costs employers do incur (e.g., work-permit issuance/renewal fees, expatriate levies) are charged separately and were not itemized in the sources reviewed.

Some figures on this page vary by jurisdiction, zone or nationality, or could not be independently confirmed from a public source at time of writing - confirm the current figure with the regulator before relying on it.

Sources

Ministry of Human Resources and Social Development (HRSD) - 'Labour contracts' page

Frequently asked

What is the difference between a limited (fixed-term) and unlimited (indefinite) contract in Saudi Arabia?

A limited contract has a set end date (or defaults to one year for expatriates if unspecified) and expires or is renewed at term end; an unlimited contract has no end date and can only be terminated per Articles 74-75 (e.g., 60 days' employer notice, 30 days' employee notice). Saudi employees can move from limited to unlimited status; non-Saudi employees stay on limited contracts under Article 37.

Can an employer keep renewing a Saudi employee's fixed-term contract indefinitely to avoid unlimited status?

No. Article 55(2) of the Labour Law, as published by HRSD, states that once a fixed-term contract with a renewal clause has been renewed three consecutive times, or the original term plus renewals reaches four years - whichever is less - the contract automatically becomes an unlimited contract if the employee keeps working.

Does the three-renewal/four-year conversion rule apply to our expatriate hires too?

No. Article 55(1) expressly makes the automatic-conversion rule subject to Article 37 for non-Saudis, and Article 37 (as amended, with the amendments taking effect roughly 180 days after Gazette publication in February 2025) keeps non-Saudi employment contracts written and fixed-term - defaulting to one year from the job-start date if no duration is stated, and auto-renewing for the same period, rather than converting to unlimited.

Is 'Mudad' the same requirement as Qiwa contract documentation?

No, they are different systems. Qiwa's Contract Management and Documentation service is where the employment contract itself is created, sent to the employee for approval, and certified by HRSD. Mudad is Saudi Arabia's Wage Protection System (WPS) platform, used to verify that salaries are actually paid on time; employers typically need to comply with both, but they serve separate purposes. The precise institutional relationship between Mudad and GOSI was not independently confirmed for this note.