Saudi Labour Law Guide 2026: Employee Rights and Obligations
Saudi Labour Law (Nizam Al-Amal), issued under Royal Decree No. M/51, governs all private-sector employment in the Kingdom. Whether you are a Saudi national or an expatriate, understanding your rights and obligations is essential. This guide covers the key provisions every employee and employer must know.
Employment Contract Requirements
All employment relationships must be documented in a written contract in Arabic (Article 51). If the employee does not speak Arabic, a bilingual contract may be used, but the Arabic text prevails in case of dispute. The contract must specify the employer and employee details, job title, salary, benefits, contract duration, and workplace location.
Fixed-term contracts for non-Saudi employees automatically convert to indefinite contracts after renewal or if the employee continues working past the expiry date. Saudi nationals may hold either fixed-term or indefinite contracts from the start.
Probation Period
The standard probation period is 90 days (Article 53). It may be extended to a maximum of 180 days by written agreement between both parties. During probation, either party may terminate the contract without notice or compensation. Fridays, official holidays, and sick leave are excluded from the probation period calculation. An employee cannot be placed on probation more than once with the same employer unless the second engagement is for a different role.
Working Hours and Overtime
Maximum working hours are 8 hours per day or 48 hours per week (Article 98). During Ramadan, Muslim employees work a maximum of 6 hours per day or 36 hours per week. Working hours do not include time for meals, prayers, and rest, provided the employee is not under the employer's authority during these periods.
Overtime must be compensated at 150% of the regular hourly rate (Article 107). The employer may require overtime work in emergencies, but systematic mandatory overtime beyond legal limits is prohibited.
Leave Entitlements
Annual leave: minimum 21 days per year, increasing to 30 days after 5 years of continuous service (Article 109). Sick leave: 30 days at full pay, 60 days at 75% pay, then 30 days unpaid per year (Article 117). Maternity leave: 10 weeks, with 4 weeks before the expected delivery date (Article 151). Paternity leave: 3 days. Bereavement leave: 5 days for death of a spouse or ascendant/descendant, 3 days for other relatives.
Employees are also entitled to leave for Hajj pilgrimage (10-15 days, once during employment) and for exams if enrolled in an approved educational institution.
Termination and Notice Periods
Either party may terminate an indefinite contract with written notice. The notice period is 60 days for monthly-paid employees and 30 days for others (Article 75). If the terminating party fails to provide proper notice, they must pay compensation equal to the wages for the notice period.
The employer may terminate without notice or compensation under Article 80 (gross misconduct), which includes assault, failure to perform essential duties after written warning, dishonesty, and prolonged unauthorized absence. The employee may leave without notice under Article 81 if the employer fails to fulfil contractual obligations or commits violence against the employee.
End-of-Service Gratuity
Employees who complete 2 or more years of service are entitled to end-of-service gratuity (Articles 84-86). The calculation is half a month's basic salary per year for the first 5 years, and a full month per year thereafter. Resignation reduces the entitlement: one-third for 2-5 years of service, two-thirds for 5-10 years, and full gratuity only after 10 years of resignation or upon employer-initiated termination.