On the morning of Sunday 9 Rabi al-Akhir 1447H — 26 April 2026 — hundreds of Saudi business owners opened Qiwa and found red where green had been. Nobody had resigned. Nobody had been let go. Nothing about the establishment had changed.
What changed was the threshold, not the headcount.
That day the new phase of Nitaqat Motawar came into force by decision of the Ministry of Human Resources and Social Development (MHRSD): three years in duration, targeting more than 340,000 additional jobs for Saudis in the private sector. Required rates rose, activities were regrouped, and establishments that had been comfortably Low Green the day before dropped out.
This article is not an explainer on what a band is. It answers the question that comes immediately after: I am red now — what stopped working, exactly how many Saudis do I need, and when does the colour come back?
What Actually Changed on 26 April
The Nitaqat Motawar procedural guide, issued by the ministry on 22 January 2026, restructures the programme along three axes:
- Merged activities. Economic activities that were separate now sit in one group, and other groups were split. Your establishment may be measured today against a different activity curve than the one that applied before April.
- A fixed three-year localisation plan. The required rates for 2027 and 2028 are already published. The increase is not a surprise — it is a schedule.
- The rate is tied to headcount. The threshold is no longer a number you look up in a table. It is a value that gets computed.
The third axis causes most of the confusion. The minimum for each band comes from:
required rate = m × ln(n) + c
where n is total headcount, and m and c are constants published in Annex 1 of the procedural guide, differing by activity, band and year. ln is the natural logarithm, as the guide specifies.
The practical consequence: the required rate moves with your size. In most activities it rises as the establishment grows. In construction and in cleaning the curve constant is negative, so the obligation eases with size. Any dashboard showing you a "required Saudization rate" without knowing your activity is showing you an invented number.
Do this before any calculation: open your establishment record in Qiwa and read the economic activity registered against it today. A large share of those who dropped in April did not change their numbers at all — their activity classification moved under the new merge.
What the Red Band Actually Stops
The red band is not a rating on paper. It is an operational freeze:
| Service | In the red band |
|---|---|
| Issuing and renewing work permits | Stopped |
| Transferring workers' services in | Stopped |
| Issuing visas and requesting visa quota | Stopped |
| Changing expatriate occupations | Restricted |
| Remaining ministry services | Restricted by degree |
The cascade is what hurts. An expatriate whose work permit expires in two months cannot be renewed, cannot be replaced by a service transfer, and cannot be substituted through new recruitment. The establishment is not merely fined — it is frozen.
The Rate Is Not Today's Snapshot: It Is a 26-Week Average
This is the difference between a plan that works and a plan that arrives late.
Your Saudization rate is not read off this month's payroll. It is computed as the average of the weekly rates over the last 26 weeks, drawing on the General Organization for Social Insurance (GOSI) database for Saudis and the National Information Center for expatriate registration, and the band is refreshed weekly.
So hiring a Saudi today does not restore your services today. That hire enters a six-month average and lifts the rate gradually, not all at once. Anyone hiring in October to escape red before a November permit renewal has computed the right number at the wrong time.
The same mechanism cuts the other way, though: it is also what stops your band collapsing because one expatriate joined last week. The stability it grants you in one direction, it takes back in the other.
The Gap Calculation: Why "I Need Five Saudis" Is Usually Wrong
The most common error in HR meetings is subtracting the current rate from the required rate and treating the difference as a headcount.
The reason is that each new Saudi raises the numerator and the denominator together. Every hire increases the Saudi count, increases total headcount, and — in most activities — increases the required threshold itself, because n grew.
Take an establishment in IT infrastructure: 100 workers, 25 of them Saudi, a rate of 25%.
With the 2026 Annex 1 constants for that activity at Low Green, the threshold at 100 workers is roughly 34.39%. The establishment is red.
| How it is calculated | Hires | Result |
|---|---|---|
| Plain difference: 34.39 minus 25 | 10 | Still red |
| Correct equation, denominator growth included | 16 | Clears Low Green for 2026 |
| What keeps you green in 2027 as well | 20 | Survives the annual constant increase |
The equation that produces the middle number:
hires ≥ (required rate × total − Saudi count) ÷ (1 − required rate)
In figures: (0.3439 × 100 − 25) ÷ (1 − 0.3439) = 14.3, then corrected upward to 16 because the threshold itself climbs with every head you add.
The gap between 10 and 16 is six hires and months of delay. The gap between 16 and 20 is crossing this year and falling next year without anyone leaving — for the second time.
Those figures are one activity in one year. Annex 1 carries constants for forty-one activities, and an establishment computing with the wrong activity's constants arrives at a number that is arithmetically precise and completely wrong. Compute your own band and gap on the Nitaqat calculator before you build a hiring plan on it.
The Small-Establishment Rule Is Not an Exemption
An establishment with five workers or fewer is not governed by the logarithmic curve. But the obligation does not disappear: it is required to employ one Saudi.
The difference between "Nitaqat does not apply to me" and "one Saudi is required of me" is the difference between a compliant establishment and one that discovers the problem at its first visa request or first permit renewal.
Four Things to Do This Week
- Read the economic activity actually registered against your establishment in Qiwa, not the one you assume. The new merge reclassified many.
- Compute your threshold at your current size, then recompute it at your size after the planned hires. They are two different numbers.
- Compute the 2027 threshold now. The plan is published for three years — next year is not allowed to be a surprise.
- Go back 26 weeks and compute your average, not today's rate. Timing is as much a part of the fix as headcount.
Where HR Systems Fail at This
Most HR systems operating in Saudi Arabia display "Saudization rate" as a single number for this month. In good faith, that number hides three things: that it is a snapshot rather than a 26-week average, that it does not know your activity so it cannot know your threshold, and that it has no idea the threshold rises in 2027.
The establishments blindsided in April were not short of data. They held all of it, in Qiwa and in GOSI, presented in a way that let nobody infer what was coming.
Building the layer that reads those sources, computes the correct threshold and warns before the edge rather than after it is straightforward engineering work. We covered how to reach the countable figures from the platform in the Qiwa HR system integration guide, and built the calculation engine itself step by step in a Saudization engine in TypeScript. If your work falls under project management professions, a separate obligation sits above Nitaqat, covered in project management Saudization at 70%.
Before You Build a Plan on the Wrong Number
If your band is red today, the question is not "how many Saudis do I hire". It is "how many, by when, against which activity constants, and does the number still hold in 2027".
Start with the Nitaqat calculator to find your position and your gap using your own activity's constants. And if you want us to review how your current system reads these numbers — and where it is hiding the next cliff from you — ask for a diagnostic review and we will tell you what we find, whether it ends in a project with us or a change you make yourself.