How does the Nitaqat logarithmic formula work?

The formula y = m × ln(x) + c uses x as establishment size, with m and c constants that vary by sector and year. The logarithmic shape means larger companies need proportionally smaller Saudization increases per additional hire.

Why do c constants differ between 2026, 2027, and 2028?

MHRSD increases c values annually to raise Saudization thresholds progressively. Any calculator using a single static c value will show incorrect bands after April 26, 2026.

What are salary-based credit multipliers?

Saudi employees earning below SAR 4,000 count as 0×. From SAR 4,000 to the profession floor they count as 0.5×. Above the floor they count as 1.0×. Disabled employees count as 4×. Profession floors: SAR 5,500 for sales/marketing, SAR 8,000 for engineering.

Calculator Methodology: Static Percentages vs. MHRSD Logarithmic Formula

The MHRSD Logarithmic Formula Explained

The Developed Nitaqat framework uses a logarithmic formula to determine the required Saudization percentage for each establishment:

y = m × ln(x) + c

x — total establishment size (employee count)
m — curve slope, varies by ISIC4 economic sub-activity. There are 2,807 registered sub-sectors
c — intercept constant, varies by sector and by year (2026, 2027, 2028)
y — required Saudization percentage (%) that determines band boundaries

The logarithmic shape is deliberate. Larger establishments require proportionally smaller Saudization increases per additional hire than smaller ones. This means a simple fixed percentage (e.g., "30% for everyone") cannot accurately represent the actual curve.

Year-Specific Constants: Why 2026 ≠ 2027 ≠ 2028

With the new Developed Nitaqat phase (effective April 26, 2026), the c constant is split by year. MHRSD raises c values progressively each year to steadily increase Saudization thresholds.

This means the same establishment with the same headcount in the same sector could be in Green band in 2026 but slip to Yellow or Red in 2027 without any staffing change — simply because the thresholds increased.

Any calculation tool using a single static c value for all years will show inaccurate bands after the switch date. This is not a marginal error — it can show Green band while the establishment is actually in Red.

Salary Credit Multipliers and Profession Rules

The Saudization ratio is not simply "Saudi count ÷ total employees." Each Saudi employee is counted with a multiplier based on their salary:

0\u00d7 (zero) — salary below SAR 4,000: not counted toward Saudization
0.5\u00d7 (half) — salary between SAR 4,000 and profession floor: counts as half an employee
1.0\u00d7 (full) — salary above profession floor: counts fully
4\u00d7 (quadruple) — disabled employees: count as four employees

Profession-specific salary floors vary by role:

Sales & marketing: SAR 5,500 (60% Saudization, effective April 19, 2026)
Engineering: SAR 8,000 (30% Saudization, grace period until June 30, 2026)
Procurement: 70% Saudization (up from 50%, grace period until May 31, 2026)

Any tool that ignores these multipliers and counts only headcount will overestimate the actual Saudization ratio, potentially showing a higher band than reality.

Where Simplified Calculators Break Down

The gap between a simplified estimate and the actual band widens in several specific scenarios:

Micro entities (≤5 employees): These operate on a pass/fail system, not the logarithmic formula. Calculators that apply the formula to micro entities produce entirely wrong results.
Sectors with unusual m slope: Some economic activities have steep curves where 10 additional employees can shift the band entirely. Calculators using general averages miss these edge cases.
Salaries near multiplier thresholds: A single employee at SAR 3,900 instead of SAR 4,000 drops from 0.5× to 0×. This small difference can push an establishment from Green to Yellow.
Ignoring staggered enforcement dates: Sales rules start April 19, general phase on April 26, procurement on May 31, engineering on June 30. Evaluating an establishment must account for which rules are active at the evaluation date.

Methodology Verification Checklist

When evaluating any Nitaqat calculation tool — whether a spreadsheet, an online calculator, or a full platform — verify the following:

Does it use the official logarithmic formula (y = m × ln(x) + c), not a simplified percentage?
Does it cover your specific ISIC4 economic sub-activity?
Does it apply different c constants for each year (2026 vs 2027 vs 2028)?
Does it calculate salary-based credit multipliers (0× / 0.5× / 1.0× / 4×)?
Does it handle micro entities (≤5 employees) with the separate pass/fail system?
How frequently is sector data verified against official MHRSD publications?

SaudizationMeter implements all of the above: the full formula with 2,807 sub-sectors, year-specific constants, salary multipliers, micro entity rules, and a what-if scenario engine for planning before committing hires.

Official References

Bottom line

Accurate Nitaqat calculation depends on applying the correct logarithmic formula with year-specific constants and salary multipliers. With the 2026-2028 phase bringing annual changes and stricter profession rules, the margin for error is smaller than ever.

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