Minimum Wage

General

The national minimum wage in Saudi Arabia is 4,000 SAR per month.

Payroll

Payroll Cycle

In Saudi Arabia, the payroll frequency is weekly or monthly. The employer must make the payment for weekly employees once a week and make payments for monthly paid employees at least once a month.

13th Salary

13th-month payments are not mandatory. However, employers can pay performance-based bonuses at their discretion.

Working Hours

General

The working week in Saudi Arabia is typically 48 hours, 8 hours per day, and six days a week. The working day may decrease to 6 hours a day during the time of Ramadan. Typically, Fridays are a rest day.  

Overtime

All work exceeding the standard working hours a week is to be paid as overtime and is regulated by employment contract/collective agreements. Daily hours cannot exceed 11 hours.

All overtime hours in excess of 48 hours a week are paid at an overtime compensation rate; this rate is typically 150.00% of the employee’s average salary rate.

Working Week

Saturday-Thursday

Leave

Paid Time Off

In Saudi Arabia, (Article 109 of the Labour Law), the annual leave entitlement is dependent on the employee’s seniority as follows: 

• For employees with one to five years of service, the employee receives 21 days of annual leave. 
• Employees with more than five years of service are entitled to 30 days of annual leave.

Employees may carry over any untaken leave to the following vacation leave with the employer’s written consent.

Employees may request ten additional days of unpaid leave per year, subject to the employer’s approval.

Public Holidays

There are 9 public holidays.

Sick Days

In accordance with Article 117 of the Labour Law, employees are entitled to 120 days of sick leave per year as below:

• Sick leave with full pay – First 30 days
• Sick leave with 1/3 pay – 60 days after first 30 days
• Sick leave with no pay – Last 30 days

Employees are required to provide a medical certificate for all sick days.  

Sick leave laws apply to employers with more than 20 employees.

Maternity Leave

Female employees are entitled to 10 weeks of paid maternity leave commencing four weeks before the expected due date. The payment of maternity leave is dependent on the employee’s seniority; employers will compensate employees with service of at least one year at 50.00% of the employee’s pay rate. Employees with at least three years of service receive compensation at the rate of 100.00% of the employees’ regular pay.  

An employee receiving full maternity leave entitlement may not also take the payment of annual leave in the same year. In contrast, an employee receiving 50.00% of their salary as a maternity benefit may also take an annual leave entitlement of 50.00% in the same year.

Paternity Leave

The father/partner is entitled to 3 days of paid Paternity leave after the child’s birth (Article 113 of the Labour Law).  

Parental Leave

There are no provisions in the law regarding parental leave.  

Other Leave

Depending on the Collective Agreement/Employment Contract terms, an employee may be allowed additional leave types, once approved between the employer and employee, for the following:

• Bereavement leave: In the event of the death of an immediate member, an employee is entitled to two days of bereavement leave.  
• Marriage leave: An employee is entitled to 3 days of leave in the event of their wedding.  
• Hajj leave/Pilgrimage leave: As per Article 114 of the Labour Law, an employee is entitled between 10 to 15 days (including the Eid Al-Adha holiday) to perform Hajj if the employee has completed at least 2 consecutive years of service with the employer. However, this entitlement arises only if the employee has not performed Haj previously.

Termination

Termination Process

The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination. The employer must give a valid reason for the dismissal of an employee; if an employer cannot provide lawful reasoning, compensation may be issued.  

If an employee resigns, the employer must issue their final wages immediately.

Notice Period

In Saudi Arabia, the notice period is dependent on the type of contract in place; for employees on monthly employment contracts, the notice period is 30 days and 15 days of notice for any other type of employment contract.

Severance Pay

The amount of severance pay is defined in Article 84 of the Labour Law. This states that the employee is entitled to an end-of-service wage of a half-month wage for each of the first five years, and a one-month wage for each of the following years of employment. The end-of-service payment is calculated based on the last paid salary amount.

Article 85 also stipulates that the employee is entitled to:

• one-third of the payment after a service of not less than two consecutive years and not more than five years
• two thirds if the service if more than five successive years but less than ten years and to the
• full payment if his service amounts for ten or more years when the work relation ends due to the employee’s resignation.

However, there are exceptions as to when severance is not mandatory:  

• When the employer assaults their employer or supervisor  
• When the obligations outlined in the employment contract are not fulfilled by the employee and has been warned in writing  
• Negligence or intent to cause harm to the employer
• Dishonesty or forgery  
• When the employee is on probation  
• When the employee is absent from work for more than 20 days in a year or 10 consecutive days  
• Divulging in trade secrets

Probation Period

In Saudi Arabia, the probation periods may vary depending on the employment contract in place. However, the probation period is typically 90 days however this period may be extended subject to the employees written consent but cannot exceed 180 days.

VISA

VISA

For an employee to acquire a work visa in Saudi Arabia, a third-party national must be sponsored by an employer. The employer must be registered with the Ministry of Interior, and a file is opened with all the information on the employer’s foreign employees.   ​Saudi Arabia’s quota system and nationalization program can make the process of employing a foreign national relatively complex and restrictive. Applicable procedures involve a home-country consular process, followed by several post-arrival steps before final residency rights are granted.

Business travelers typically apply for a Business Visit Visa at a Saudi consular post once they receive a government-approved letter of invitation from a sponsor in Saudi Arabia. Business Visit Visas are usually valid for three months (single-entry) or 12 months (multiple-entry), or up to five years (multiple-entry) for citizens of countries that signed bilateral visa agreements with Saudi Arabia. The maximum allowable duration of stay under a single-entry visa for three and six months is 30 days; for visas with other validities, it is 90 days.

There is no longer a short-term work option in Saudi Arabia; for long-term work, foreign nationals can apply for a Work Permit and Resident ID Card, which is valid for up to one year with the possibility of extensions.​​​​​​​

This does not apply to citizens from Bahrain, United Arab Emirates, Kuwait, and Oman. Citizens from these countries may enter with their ID.

VAT

General

The standard of VAT in Saudi Arabia is 15.00%