Why Every Employer in Saudi Arabia Must Know These Rules Cold
Saudi Arabia’s Labor Law governs every aspect of how you manage your workforce’s time — from the number of hours an employee can work each day, to how much you owe them for staying late, to how many days off they’re entitled to each year.
These are not optional policies you can set yourself. They are legal minimums enforced by the Ministry of Human Resources and Social Development (HRSD), monitored through the Qiwa platform, and increasingly reported by employees who know their rights. In 2026, with HRSD inspection activity increasing and the Qiwa dispute system accessible to every worker on their phone, non-compliance carries real consequences.
This guide covers Articles 98–116 of the Saudi Labor Law in plain language — giving you the exact numbers, formulas, and rules you need to manage your workforce correctly and avoid costly violations.
Working Hours — What the Law Says
Article 98 of the Saudi Labor Law sets the maximum daily and weekly working hours for all private sector employees. These are hard caps — not targets.
Category | Daily Max | Weekly Max | Notes |
Standard (non-hazardous) | 8 hours/day | 48 hours/week | Most office, retail, hospitality roles |
Ramadan (Muslim employees) | 6 hours/day | 36 hours/week | Applies to Muslim employees only |
Hazardous/unhealthy work | 7 hours/day | 42 hours/week | Roles involving physical danger or health risk |
Domestic workers | 10 hours/day | — | Governed by Domestic Workers Law |
Breaks (shift > 5 hrs) | Min. 30 min break | Not counted in working hours | Must be given mid-shift — cannot be waived |
⚠️ Important: The 48-hour weekly limit applies regardless of how hours are distributed across days. You can use a flexible schedule — but you cannot exceed 48 hours total per week for standard employees. |
Ramadan Working Hours — Detailed Rules
Ramadan working hours are one of the most frequently misunderstood rules in Saudi Labor Law. Here is exactly what applies:
Who does it apply to? | Muslim employees only — non-Muslim employees are NOT legally entitled to reduced Ramadan hours |
Maximum daily hours | 6 hours per day (reduced from 8) |
Maximum weekly hours | 36 hours per week (reduced from 48) |
Pay impact | NO reduction in pay — full salary applies despite shorter hours |
Employer obligation | Mandatory — you cannot require Muslim employees to work 8-hour days during Ramadan |
Night shift exception | If the employee works primarily night shifts, different schedules may apply with HRSD approval |
💡 Best Practice: Prepare a formal Ramadan schedule adjustment notice and communicate it to all employees at least one week before Ramadan begins. Document it in Qiwa contracts. |
Overtime — Calculation, Rules & What You Must Pay
Article 107 of the Saudi Labor Law mandates overtime pay whenever an employee works beyond their contracted hours. There is no opt-out — even if the employee agrees, the overtime rate is legally required.
Overtime Rate Structure
Type | When It Applies | Rate | Basis |
Standard overtime | Any hours beyond 8/day or 48/week | +25% of hourly wage | Basic salary ÷ 208 hours/month |
Weekend/holiday OT | Work on the weekly rest day | +50% of hourly wage | Or a compensatory rest day instead |
Night shift premium | Hours worked between 11pm–7am | No legal minimum — contractual | Must be stated in employment contract |
📐 Overtime Hourly Rate Formula: Basic Salary ÷ 26 working days ÷ 8 hours = Hourly Rate → Then apply +25% or +50% |
Overtime Calculation Example
Employee: Basic salary = SAR 4,000/month | Worked 10 hours on a regular workday (2 hours overtime)
Step | Calculation | Result |
Monthly hourly rate | SAR 4,000 ÷ 208 hours | SAR 19.23/hour |
Overtime rate (+25%) | SAR 19.23 × 1.25 | SAR 24.04/hour |
2 hours overtime pay | 2 × SAR 24.04 | SAR 48.08 |
Total pay for that day | 8 hrs normal + 2 hrs OT | Normal daily pay + SAR 48.08 |
⚠️ Common Mistake: Many employers divide by 30 days instead of 26 working days to calculate the hourly rate — this underestimates the overtime rate and constitutes underpayment under the law. |
Leave Rights — Complete Breakdown for All Types
Saudi Labor Law provides employees with multiple categories of paid leave. Each has different entitlements, conditions, and documentation requirements.
Annual Leave (Article 109)
Less than 5 years service | 21 days paid annual leave per year |
5 years or more service | 30 days paid annual leave per year |
Accrual | Pro-rata — employee accrues leave monthly |
When can it be taken | After completing 1 year of service (first-year exceptions possible) |
Unused leave payout | Must be paid in cash if employee leaves before using it |
Employer scheduling right | Employer can schedule leave timing — but cannot deny it permanently |
Leave during probation | Not accrued during probation — begins after probation ends |
⚠️ Important: You cannot cancel an employee’s accrued leave. If an employee leaves with unused leave, you must pay it out at their current daily wage rate. |
Sick Leave (Article 117)
Period | Duration | Pay Rate | Condition |
First 30 days | 30 days | Full pay (100%) | Medical certificate required after 3 consecutive days |
Days 31–90 | 60 days | 75% pay | Ongoing medical certification required |
Days 91+ | 30 days | No pay (unpaid) | Employer may terminate if illness is permanent |
Maximum total sick leave | 120 days per year | Varies by period | After 120 days, termination is permitted |
📌 Note: Sick leave cannot be deducted from annual leave. They are separate entitlements. An employee on sick leave still accrues annual leave. |
Maternity & Paternity Leave (Articles 151–153)
Leave Type | Duration | Pay | Who Qualifies |
Maternity leave | 10 weeks total | Full pay (100%) | Female employees — can start 4 weeks before due date |
Extended maternity (sick child) | Up to 1 month unpaid | No pay | If newborn has medical condition requiring care |
Paternity leave | 3 days | Full pay (100%) | Male employees — at time of birth |
Nursing breaks | 1 hour/day for 12 months post-birth | Full pay (100%) | Female employees — right to 2 breaks/day |
ℹ️ 2024 Update: Saudi Arabia increased maternity leave from 10 to 12 weeks for births where the child requires medical care. Always verify the latest HRSD circulars as maternity rights are actively being expanded under Vision 2030. |
Other Statutory Leave Types
Leave Type | Duration | Pay | Notes |
Marriage leave | 5 days | Full pay | First marriage only — must be taken at time of marriage |
Bereavement (close family) | 5 days | Full pay | Spouse, child, parent, sibling, grandparent |
Bereavement (non-immediate) | 3 days | Full pay | Extended family — aunts, uncles, in-laws |
Hajj leave | 10–15 days | Full pay | Once in service — employee must not have performed Hajj |
Study/exam leave | Per exam day | Full pay | Enrolled in accredited program — with proof |
Civil/military service | Duration of service | Varies | Employee’s position must be preserved |
🕋 Hajj Leave: An employer CANNOT deny an employee Hajj leave if they have not previously performed Hajj and have completed at least 2 years of service. This is a legal right, not a benefit. |
Official Saudi Public Holidays 2026
Saudi Arabia has 5 official public holidays per year under the Saudi Labor Law. These are mandatory paid days off for all employees:
Holiday | Duration | Date | Notes |
National Day | 1 day | September 23 | Mandatory paid holiday for all employees |
Founding Day | 1 day | February 22 | New — added in 2022 by Royal Decree |
Eid Al-Fitr | 4 days | End of Ramadan (lunar calendar) | Timing varies — watch official HRSD announcement |
Eid Al-Adha | 4 days | 10th of Dhul Hijjah (lunar calendar) | Timing varies — watch official HRSD announcement |
Saudi Flag Day | Unconfirmed 2026 | March 11 | Check HRSD for official 2026 status |
⚠️ If a public holiday falls on the employee’s weekly rest day, the employer must grant a compensatory rest day OR pay an additional day’s wage. You cannot ignore the overlap. |
5 Most Common Labor Law Violations — And Their Consequences
These are the violations HRSD inspectors identify most frequently in Saudi businesses — and they all carry penalties:
1 Exceeding Maximum Working Hours Without Overtime Pay
Requiring employees to work more than 8 hours/day without paying the 25% overtime premium. This is the single most common violation — and it creates EOSB liability too, since basic salary calculations are affected.
2 Reducing Muslim Employees’ Hours During Ramadan Without Wage Reduction
Failing to reduce Muslim employees’ hours to 6/day during Ramadan while keeping their full pay. The violation works both ways — some employers illegally reduce pay along with hours.
3 Denying or Delaying Annual Leave
Employers cannot deny, cancel, or indefinitely postpone annual leave. An employee who reaches their leave entitlement and is denied it can file a Qiwa complaint — and is entitled to cash payout of unused days.
4 Incorrect Sick Leave Documentation and Deductions
Deducting from salary for sick days that fall within the legally paid sick leave period, or requiring doctors’ notes for periods shorter than 3 consecutive days — both are illegal deductions.
5 No Written Leave Records or Approval Documentation
Verbal leave approvals leave the company exposed. Without written records, an employee can claim they were never given their leave entitlement — and the employer has no evidence to counter it in Qiwa platform.
How Safwa HR Manages Workforce Time Compliance for You
Keeping track of working hours, overtime calculations, leave accruals, Ramadan schedules, and public holiday compensation across an entire workforce is a full-time job. Safwa HR handles it as part of our HR outsourcing and payroll services:
📋 Employment Contract Compliance Review
We review your contracts to ensure working hours, overtime terms, and leave entitlements are correctly stated and fully compliant with the 2026 Labor Law.
⏱️ Overtime & Working Hours Tracking
We set up and manage time-tracking systems that automatically flag hours approaching legal limits — preventing violations before they happen.
🏥 Leave Management System
We maintain accurate leave records for every employee — annual leave accruals, sick leave usage, special leave — integrated with your payroll.
⚖️ Ramadan Schedule Management
We prepare and communicate official Ramadan working hour adjustments for your workforce, with documentation filed in Qiwa.
🌙 Public Holiday & Overtime Payroll
We calculate and process all public holiday compensation and overtime payments correctly — eliminating the risk of underpayment claims.
💡 Safwa HR currently manages workforce compliance for businesses across Dammam, Riyadh, and the Eastern Province. Whether you have 10 employees or 500, contact us for a free compliance review.
Need Help Managing Working Hours & Leave Compliance?
Safwa HR’s HR outsourcing team handles schedules, overtime calculations, leave tracking, and Ramadan adjustments — fully compliant with Saudi Labor Law.
