King Salman has ordered the minimum wage for workers in Saudi Arabia’s private sector to be increased to SR5,000 (approximately Rs360,000) within six months.
The move aims to ease the impact of changes in electricity and water tariffs and will benefit Saudi citizens only.
Monthly allowances will also increase by SR500 for eligible civilian and military employees covered by civil service pay scales and employment programmes, as well as retirees and family members of deceased contributors or retirees covered by the Social Insurance Law.
Families receiving social security benefits will also receive an additional SR500 per month, subject to applicable regulations and procedures.
The minimum wage threshold will subsequently rise to SR6,000, effective 12 months after the first increase is implemented.
Saudi Arabia announced new electricity consumption tariff adjustments effective January 1, 2027.
SAR 0.18 per kWh for consumption under 6,000 kWh per month. SAR 0.30 per kWh for consumption of 6,000 kWh and more per month.
Financial support from the Kingdom for Saudis
Saudi citizens enjoy a high level of financial support and welfare benefits from the Kingdom, though this comes alongside restrictions on political and civil rights.
The average monthly wage for Saudi workers is roughly SR11,214 (about $3,000), and personal income tax is not levied, though a 15 per cent Value-Added Tax (VAT) applies to goods and services
