Saudi Arabia Labor Law — full reference, mapped to ZenHR features

Primary source: Saudi Labor Law (Royal Decree No. M/51 of 23/8/1426H = 27 September 2005), as amended — most recently by Royal Decree M/144 of 5/2/1444H (August 2023), effective 19 February 2024. Companion regulations: GOSI Law (Royal Decree M/33 of 3/9/1421H), Wage Protection System (Ministerial Decision 4347/1436H), Implementing Regulations of the Labor Law (Ministerial Decision 70273 of 1438H, as updated). Regulator: Ministry of Human Resources and Social Development (HRSD), Qiwa & Mudad platforms, GOSI.

This document is a working compliance reference for configuring ZenHR. It is not legal advice; always validate against the latest official Arabic text.

1. Scope and definitions (Articles 1–7)

• Article 2 defines key terms: "worker", "employer", "wage", "basic wage", "actual wage". Basic wage = wage stated in the contract excluding allowances; actual wage = basic wage plus regular cash allowances (housing, transport) used as the base for end-of-service, leave and overtime calculations.

• Article 3: work is the right of every Saudi citizen; non-Saudis may not work in KSA except under conditions stipulated.

• Article 7: certain categories are excluded — household workers (now governed by a separate Domestic Workers regulation), agricultural workers in family businesses, self-employed, and family employees of the employer.

ZenHR mapping: the "Basic vs Actual Wage" distinction drives Saudi-specific payroll setup, EOSB accrual, and leave-pay computations. The Employee Management module stores nationality and employment category to enforce Article 7 exclusions.

2. Recruitment, contracts and probation (Articles 33–55)

• Article 33: a non-Saudi may not work without a valid work permit; the permit is the basis for the residency permit (Iqama).

• Article 37: contracts for non-Saudis must be in writing and fixed-term. If silent on duration, the validity period of the work permit is deemed the term.

• Article 50: a Saudi worker may have a written or unwritten contract; if unwritten, the worker may prove the contract by all means of evidence. Written contracts are made in two original copies (employer + worker) and must include: parties' names, ID/CR, date of contract, joining date, wage, type and place of work, term (if fixed).

• Article 51: every contract is presumed indefinite unless agreed otherwise. A fixed-term contract that is renewed twice or runs more than 4 years converts to indefinite (this 4-year auto-conversion applies only to Saudis).

• Article 53: probation must be in writing; maximum 90 days, extendable in writing by mutual consent up to a total of 180 days. Public holidays and sick leave do not count toward probation. Either party may terminate during probation without notice or end-of-service award (unless contract says otherwise).

• Article 54: the worker may not be placed on probation more than once with the same employer (except for a different occupation or after 6 months from the end of prior service).

ZenHR mapping: the contract template enforces Article 50's required fields; the Employee record stores Iqama/work-permit expiry and triggers Qiwa renewal alerts; probation auto-converts to permanent on the 91st (or 181st) day unless extended.

3. Working hours and rest (Articles 98–106)

• Article 98: maximum 8 hours/day or 48 hours/week. Ramadan: Muslim workers' hours reduced to 6/day or 36/week.

• Article 99: the 8-hour cap may be raised to 9 hours/day in certain establishments by HRSD decision, or reduced to 7 hours/day for hazardous work.

• Article 100: in seasonal or preparatory operations, hours may be averaged over the year, not exceeding 10/day or 60/week.

• Article 101: working hours must be organized so the worker does not work more than 5 continuous hours without a rest, prayer or meal break of at least 30 minutes. The break is not counted as work. Total daily presence including breaks must not exceed 12 hours.

• Article 102: rest periods do not count if the worker can leave the workplace; otherwise they do.

• Article 104: Friday is the weekly rest day for all workers; an employer may replace it with another day for some workers, after notifying the Labor Office, provided full weekly rest of 24 consecutive hours is given.

• Article 106: night work, shift work, and on-call rules per Implementing Regulations.

ZenHR mapping: the Time & Attendance module auto-applies Ramadan reduction for Muslim employees (driven by the Religion field), enforces the 5-hour continuous-work limit by inserting a mandatory unpaid break in shift templates, and ships Friday as the default weekly rest.

4. Overtime (Article 107)

Article 107: actual working hours beyond regular hours, or work on the weekly rest day or public holidays, are overtime. Overtime pay = hourly wage + 50% of the basic wage. The hourly wage is computed as the basic wage divided by 240 hours per month (8 hrs × 30 days) unless otherwise agreed favorably. Overtime cannot exceed limits set by the Implementing Regulations.

ZenHR mapping: Auto-Apply Overtime and Overtime Requests modules compute the 50% premium on basic wage by default; Saudi tenants can opt to compute on actual wage by policy override.

5. Annual leave (Articles 109–111)

• Article 109: paid annual leave of at least 21 days/year. After 5 continuous years of service with the same employer it increases to no less than 30 days/year. Leave is paid in advance.

• Article 110: the worker must take annual leave in the year it accrues; with employer consent the worker may postpone it or carry days into the next year, but not beyond 90 days into the new year unless work conditions require, in which case the employer may postpone by up to 90 days; further postponement requires written worker consent and may not push the leave past the end of the year following the one in which it accrued.

• Article 111: on termination, the worker is paid for unused accrued leave on the last wage. Days of public holidays, sickness, and other leaves falling within annual leave are added to it.

6. Other paid leaves (Articles 112–116)

• Article 112: paid public holidays — Eid Al-Fitr (4 days starting day 29 of Ramadan or by Ministerial decision), Eid Al-Adha (4 days starting Arafat Day = 9 Dhul-Hijjah), National Day (23 September). Founding Day (22 February) was added by Royal Decree in 2022. If a public holiday falls within the weekly rest, the worker is given a compensating day.

• Article 113: family events — 3 days for marriage of the worker, 3 days for birth of a child, 5 days for death of spouse or first-degree relative.

• Article 114: Hajj leave — 10 to 15 paid days once during service, after at least 2 years with the same employer, for performing Hajj.

• Article 115: exam leave — paid for end-of-year exams in an unrepeated school year; unpaid for repeated years; the employer is notified at least 15 days in advance and may require proof.

• Article 116: unpaid leave by employer agreement; the contract is suspended for the duration.

7. Sick leave (Article 117)

Article 117: a worker whose illness is established is entitled, per year of service, to sick leave with: full wage for the first 30 days, three-quarters wage for the next 60 days, and no wage for the final 30 days. The "year" is the year of illness counted from the first day of sickness.

8. Maternity, nursing and related provisions (Articles 151–160)

• Article 151: maternity leave = 10 weeks, distributed by the worker as she chooses; at least 6 weeks must fall after delivery. Maximum 4 weeks before expected delivery. Full pay if the worker has 3+ years of service; half pay otherwise. A worker who has used annual leave during the same year receives half pay for the maternity period if she has < 3 years.

• Article 152: the employer pays all medical expenses of pregnancy and delivery.

• Article 153: in case of illness due to pregnancy or delivery proven by medical certificate, the worker is granted up to 1 month additional unpaid leave continuous or split.

• Article 154: a working mother is entitled, upon return after maternity leave, to one or two daily rest periods to nurse her child totaling not more than one hour. These rests are counted as working hours and entail no reduction in wage. The right runs for 24 months from delivery.

• Article 155: the employer may not terminate the worker or send a termination notice while she is on maternity leave, sick leave proven by certificate, or otherwise protected.

• Article 160: a Muslim widow gets 4 months and 10 days of paid Iddah leave; a non-Muslim widow gets 15 days.
  
  
  

9. Wages and the Wage Protection System (Articles 90–95)

• Article 90: wages paid in legal tender (SAR), at the workplace, during working hours. Monthly-paid workers paid at least once/month; weekly-paid at least once/week; daily/piece-rate at least once every two weeks. Payment date must not exceed 5 days after due date for monthly-paid workers.

• Article 91: the worker may not be paid in scrip or required to spend the wage at a particular store.

• Article 92: a deduction can be made only by written order of the worker (loans), execution of a court ruling, or specific provision of law. Total deductions including SSF generally may not exceed half of the wage; for alimony and food costs the cap is two-thirds.

• Article 93: items the employer recovers (advances, court fines, social-fund subscriptions) follow defined ceilings per pay period.

• Wage Protection System (WPS): HRSD Ministerial Decision 4347/1436H requires all private-sector wages to be transferred through a licensed Saudi bank in SAR. Coverage extended in phases by company size; non-compliance results in service suspensions on Qiwa. ZenHR generates the Mudad / WPS file by accounting period.

10. GOSI — social insurance

Administered under the GOSI Law (Royal Decree M/33) by the General Organization for Social Insurance. For Saudis: Annuities branch 18% (9% employee + 9% employer) + Saned (unemployment insurance) 2% (1% employee + 1% employer) + Occupational Hazards 2% (employer only) = 22% on contributory wage (basic + housing, capped at SAR 45,000). For non-Saudis: Occupational Hazards 2% only (employer). ZenHR generates the GOSI monthly contributions file, handles join/leave events, and reconciles the GOSI portal.

11. End-of-Service Award (EOSA) — Articles 84–88

• Article 84: at the end of the work relationship, the employer pays an end-of-service award computed as half a month's wage per year of service for the first 5 years, and one month's wage per year thereafter, on the basis of the last wage. Pro-rata applies for fractional years.

• Article 85: if the worker resigns, the worker receives one-third of the award after 2+ years and less than 5; two-thirds after 5+ but less than 10; full award after 10+ years.

• Article 86: "wage" for EOSA purposes is the last actual wage (basic + allowances treated as wage components).

• Article 87: a woman who resigns within 6 months of marriage or 3 months of giving birth is entitled to the full award.

• Article 88: the employer may not withhold the EOSA at the end of service; deductions made under Article 92 may be applied.

ZenHR mapping: EOSA is auto-calculated using the configured "last wage" definition (basic only, or basic + specified allowances), with the Article 85 resignation ladder applied automatically, and Article 87 triggered by a marriage/birth event within the qualifying window.

12. Termination, notice and arbitrary dismissal (Articles 74–88)

• Article 74: a contract ends by expiry, mutual consent, resignation with notice, employee retirement age (60 men / 55 women, subject to GOSI), or death/incapacity. The 2024 amendments added force majeure and bankruptcy as grounds.

• Article 75: for indefinite contracts paid monthly, either party gives at least 60 days written notice; other payment frequencies require 30 days. Notice may not be waived; if the employer does not honor it, compensation equals the notice-period wage.

• Article 76: notice may be in writing during the same pay period the termination is intended.

• Article 77 (as amended 2024): if a contract is terminated for an invalid reason, the harmed party is entitled to compensation. The minimum compensation is 15 days' wage for each year of service for indefinite contracts, or the remaining wage to end of term for fixed-term contracts, subject to a minimum of 2 months' wage.

• Article 80: the employer may dismiss without notice or award if: (1) the worker assaults the employer/manager/superior during or because of work; (2) fails to perform essential obligations or breaches the employer's instructions despite a written warning; (3) is proven of bad conduct or morality; (4) commits an intentional act causing material loss; (5) forges identity or qualifications; (6) is taken on probation; (7) absents 30 non-consecutive or 15 consecutive days without legitimate reason after a warning; (8) exploits the position for personal gain; (9) discloses work-related secrets.

• Article 81: the worker may leave without notice and keep full EOSA in 5 defined cases (employer breach of essential obligation, employer assault, danger threatening worker's safety/health, deceit at hiring, etc.).

13. Discipline and warnings (Articles 66–73)

• Article 66: penalties are limited to written warning, fine, deduction from pay, suspension with deduction, denial of periodic raise, denial of promotion, and dismissal under Article 80.

• Article 67: fine = deduction from wage for a violation, capped at 5 days' wage in any one month; an offense may not carry more than 5 days' wage in fines.

• Article 68: suspension from work as a penalty may not exceed 5 days/month or 30 days/year.

• Article 69: written warning must specify the violation and be signed by the worker; the worker may object.

• Article 71: discipline must follow the establishment's bylaw approved by HRSD; the worker must be heard before any penalty is imposed.

• Article 72: a penalty may not be imposed more than 30 days after discovery of the violation, nor more than 15 days after the investigation is completed.

14. Female employees and minors (Articles 149–162)

• Articles 149–150: women are entitled to work in all fields suiting their nature; discrimination by wage for the same work is prohibited.

• Articles 159–162: minimum age 15 for general work, with restrictions on hazardous work and night work; complete bar on employment under age 13.

15. Saudization — Nitaqat and Qiwa reporting

Nitaqat (HRSD program) classifies private-sector establishments by their Saudi-to-total headcount ratio into Platinum, High Green, Mid Green, Low Green, and Red bands. Higher bands receive faster visa issuance, work-permit privileges, and access to Tawteen incentives. Qiwa is the digital contract registration platform; every employment contract for a non-Saudi must be registered on Qiwa for the work permit to be issued. ZenHR tracks: Saudization percentage, GOSI status (active/suspended), Qiwa contract ID, and visa quota usage; the Reports module produces the Nitaqat dashboard and Tawteen reports.

16. Health and safety (Articles 121–144)

The employer must provide medical care, safe equipment, periodic occupational checks, accommodation under HRSD specifications, and work injury insurance (covered by GOSI Occupational Hazards). Workplace injuries entitle the worker to medical treatment, full wage during incapacity for up to 60 days then 75% until the worker recovers, returns to work, becomes disabled or dies (Articles 138–141).

17. Dispute resolution (Articles 219–243)

Labor disputes flow through the Amicable Settlement office at the Labor Office, then to the Labor Court (since 1439H/2018 the courts were brought under the Ministry of Justice). Filing deadline for most claims is 12 months from termination.

References (official sources)

• Labor Law PDF (HRSD): hrsd.gov.sa/.../Labor.pdf

• HRSD portal: hrsd.gov.sa

• GOSI: gosi.gov.sa

• Qiwa (contract & permit platform): qiwa.sa

• Mudad (WPS): mudad.com.sa