Saudi Arabia Labour Law — the quick guide
The statutory baseline for employment in Saudi Arabia under Saudi Labour Law (Royal Decree No. M/51), in one page. Every figure below comes from the same compliance engine that runs AhlanHamad payroll.
- Labour law
- Saudi Labour Law (Royal Decree No. M/51)
- Annual leave
- 21 days
- Sick leave
- up to 120 days/year
- Probation
- up to 3 months
- Notice period
- 2 month(s)
- Weekend
- Friday–Saturday
- Overtime
- +50% weekdays · +50% rest days
- Social insurance
- GOSI — employer 11.75% / employee 9.75%
- Wage protection
- Mudad WPS
- Nationalization
- Saudization (Nitaqat) — workforce target 30%
Annual leave
The statutory annual leave entitlement in Saudi Arabia is 21 days under Saudi Labour Law (Royal Decree No. M/51). Contracts may grant more; some entitlements vary with length of service.
Sick leave
Saudi Labour Law (Royal Decree No. M/51) provides for up to 120 days of sick leave per year in Saudi Arabia, paid on the tiered scale set by the law.
Probation period
Probation may last up to 3 months.
Notice period
The statutory notice period is 2 month(s) for indefinite contracts — always check the contract, which may set a longer period.
Working week
The standard working week in Saudi Arabia runs Sunday to Thursday, with a Friday–Saturday weekend.
Overtime pay
Statutory overtime under Saudi Labour Law (Royal Decree No. M/51) is normal wage +50% on working days and +50% on the weekly rest day. These are minimums — company policy may pay more.
End-of-service gratuity
Half a month's wage per year for the first 5 years, then a month's wage per year thereafter, with no cap. Resigning does not cancel the gratuity — it pays a share of what has already accrued: nothing under 2 years, one-third from 2, two-thirds from 5, and the full amount from 10. WAGE BASIS: this award is computed on the last FULL monthly remuneration — basic salary PLUS the fixed allowances that count toward indemnity (housing, transport, and the like), never basic salary alone.
- First 5 years: half a month's wage per year
- After 5 years: 1 month's wage per year
- Partial years are calculated proportionally
- Resignation under 2 years: no award
- Resignation 2–5 years: one-third of the award
- Resignation 5–10 years: two-thirds of the award
- Resignation 10+ years: full award
- Termination by employer: full 100% award
Wage protection (WPS)
Employers in Saudi Arabia pay salaries through Mudad WPS. AhlanHamad builds the wage-protection file from each payroll run, ready for you to upload.
Workforce nationalization
Saudization (Nitaqat) — workforce target 30%
Statutory rules current as of August 2026. These are the statutory baselines, stated for general information — not legal advice. Entitlements can vary with tenure, sector, and contract; verify your specific case.
Frequently asked questions
How many days of annual leave in Saudi Arabia?
The statutory annual leave entitlement in Saudi Arabia is 21 days under Saudi Labour Law (Royal Decree No. M/51). Contracts may grant more; some entitlements vary with length of service.
How many sick days does the law allow in Saudi Arabia?
Saudi Labour Law (Royal Decree No. M/51) provides for up to 120 days of sick leave per year in Saudi Arabia, paid on the tiered scale set by the law.
How long can probation last in Saudi Arabia?
Probation may last up to 3 months.
What is the overtime rate in Saudi Arabia?
Statutory overtime under Saudi Labour Law (Royal Decree No. M/51) is normal wage +50% on working days and +50% on the weekly rest day. These are minimums — company policy may pay more.
What is the weekend in Saudi Arabia?
The standard working week in Saudi Arabia runs Sunday to Thursday, with a Friday–Saturday weekend.
How is end-of-service calculated in Saudi Arabia?
Half a month's wage per year for the first 5 years, then a month's wage per year thereafter, with no cap. Resigning does not cancel the gratuity — it pays a share of what has already accrued: nothing under 2 years, one-third from 2, two-thirds from 5, and the full amount from 10. WAGE BASIS: this award is computed on the last FULL monthly remuneration — basic salary PLUS the fixed allowances that count toward indemnity (housing, transport, and the like), never basic salary alone.
Social insurance
GOSI contributions are employer 11.75% and employee 9.75% of the covered wage, for covered Saudi nationals. Expatriate employees are generally outside the state pension scheme and receive the end-of-service gratuity instead.
See the current GOSI contribution rates