Saudi Labour Law: Overtime Pay, Annual Leave and Notice Periods Explained
TL;DR
Article 107 prices overtime at the hourly wage plus 50% of the basic wage, Article 109 gives 21 days of annual leave rising to 30 after five years, and Article 75 sets notice at 60 days for employers and 30 days for resignations. The exact arithmetic for each rule, with a worked SAR example.
Table of Contents
The three Saudi labour numbers most workers need
Open the Saudi Labour Law Calculator, type your basic salary and total wage, and compare the result with your payslip.
Three articles of the Saudi Labour Law decide most payslip arguments. Article 107 prices overtime. Article 109 sets annual leave at a minimum of 21 days a year, rising to 30 days after five consecutive years with one employer. Article 75 sets the notice periods for ending an indefinite contract: 60 days when the employer ends it, 30 days when the employee resigns, for staff paid monthly.
Each rule has a detail that changes the money. Overtime pay uses two different wage figures in one formula. Leave cannot be traded for cash while you are still employed. Notice periods changed under the amended Article 75, and older guides still quote the pre-amendment figures.
Figure 1: Your contract and payslip hold the two wage figures the overtime formula needs: the basic salary and the total wage.
Overtime pay: the Article 107 formula
Article 107 says the employer pays overtime compensation equal to the hourly wage plus 50% of the basic wage. Read that sentence with the law's two wage definitions in hand. The actual wage is the basic salary plus fixed allowances such as housing and transport. The basic wage is the contract salary before allowances. The first part of the overtime hour, the hourly wage, is calculated on the actual wage. The 50% premium is calculated on the basic wage alone.
A monthly wage becomes an hourly wage through a divisor. Saudi payroll practice divides by 240, which is 30 days at 8 hours a day. Company regulations set the divisor, and a workplace can name a different one. The formula below uses 240; swap in your own divisor and the same steps hold.
Worked example (an example, with round numbers)
Basic salary SAR 6,000, total wage SAR 7,500 after fixed allowances, 12 overtime hours in the month.
- Hourly wage on the total wage: 7,500 ÷ 240 = SAR 31.25
- Basic hourly wage: 6,000 ÷ 240 = SAR 25.00
- Premium: 50% of 25.00 = SAR 12.50
- Overtime hourly rate: 31.25 + 12.50 = SAR 43.75
- Overtime pay for 12 hours: 43.75 × 12 = SAR 525.00
A payslip that priced those 12 hours at basic salary only would show 12 × 37.50 = SAR 450. The SAR 75 gap comes from the premium base and the hourly base being two different figures in the law.
Article 107 also covers which hours count. Hours beyond the standard schedule are overtime. Every hour worked during holidays and official vacations is an overtime hour, paid with the same formula. With the employee's consent, the employer can grant paid compensatory leave days in place of the overtime wages. Managers and staff in senior roles with authority over other workers sit outside the overtime articles under Article 108, unless their contract grants overtime anyway.
Figure 2: Hours past the standard schedule are overtime hours. Keep your own record of them, with dates.
Annual leave: 21 days, rising to 30
Article 109 sets the floor: paid annual leave of at least 21 days for each year of service. After five consecutive years with the same employer, the floor rises to at least 30 days. A contract can promise more than the floor. A contract that promises less gives you the floor anyway, because the article states a minimum. Leave pay is paid in advance, before the leave starts.
Scheduling sits with the employer under Article 110. The employer fixes the dates around work needs and must notify the employee at least 30 days before the leave begins. The employer can postpone leave where work requires it, and a postponement past 90 days needs the employee's written consent. The five-year count runs with one employer: change jobs and the count for the 30-day tier starts again at the new employer.
One rule surprises many workers: leave cannot be swapped for cash during service. Article 109 states that the worker may not forgo the leave or receive an allowance in exchange for it while employed. The cash route opens when employment ends. Article 111 entitles a worker who leaves with unused days on the balance to a wage for those days, worked out from the final wage. Count your unused days before you sign a final settlement, and price them at your payroll daily rate.
Figure 3: Annual leave is a legal minimum of 21 paid days a year, and 30 days a year after five consecutive years with one employer.
Notice periods under Article 75
Article 75 governs indefinite contracts. Either side can end the contract for a valid reason, and the reason goes in a written notice served before the termination date. The amended article splits the monthly-paid case by who is terminating:
| Situation (indefinite contract) | Minimum written notice |
|---|---|
| Employer terminates, wage paid monthly | 60 days |
| Employee resigns, wage paid monthly | 30 days |
| Either side, wage paid on another basis | 30 days |
The 30-day employee figure is the amended one; older guides and contracts often say 60 days for both sides, the pre-amendment rule. Your contract can set a longer period than the article, and the longer contractual period is the one to plan around. Article 76 covers a skipped notice: the side that ends the contract without observing the period pays the other side compensation equal to the wage for that period, or a higher amount if both sides agreed one in the contract.
Fixed-term contracts follow a different track. They run to the end date written in the contract. Early exit usually needs the other side's written agreement, and Article 77 sets compensation for an unlawful early termination, which for a fixed-term contract reaches the wages of the remaining period. Read the termination clause of a fixed-term contract before handing in a resignation letter.
What to check on Qiwa before you sign anything
Qiwa holds the official record of your employment: the registered contract, its type, its start date, and the wage figures the employer filed. Four checks settle most questions early.
- Contract type and dates. Indefinite or fixed-term decides which notice rule applies to you. The start date decides your leave tier and your years of service.
- Registered wage figures. Compare the basic salary and allowances on Qiwa with your contract and payslip. The overtime formula runs on these two figures.
- Leave balance. Count the days you have taken this year against the Article 109 floor for your service length. Carry the unused count into any final settlement.
- Notice in writing. A termination or resignation under Article 75 is a written notice with the reason stated. Keep the letter, the date it was served, and the reply.
Keep your own file as well: contracts, payslips, timesheets or attendance screenshots, and leave approvals. HRSD runs the labour dispute service for wage claims, and a dated paper trail is the evidence that service works from. Run your figures through the Saudi Labour Law Calculator first, and take the printed result, with the article numbers, into the conversation.
Sources: Saudi Labour Law as published by the Ministry of Human Resources and Social Development (Articles 75, 76, 77, 107, 108, 109, 110, 111), checked October 2026. This guide gives general information. It is not legal advice. Confirm your position on Qiwa or with HRSD.
Frequently asked questions
How is overtime pay calculated in Saudi Arabia?
Article 107: take the hourly wage from the total wage (basic plus fixed allowances), then add 50% of the basic hourly wage. Payroll practice divides the monthly figures by 240 to get hourly figures. On a basic salary of SAR 6,000 and a total wage of SAR 7,500, the overtime rate is SAR 43.75 an hour.
How many annual leave days do I get after 3 years in Saudi Arabia?
At least 21 paid days a year under Article 109. The minimum rises to 30 days once you complete five consecutive years with the same employer. Your contract can give more than the minimum at any service length.
Can my employer pay me instead of giving me annual leave?
During service, no. Article 109 bars giving up leave or taking a cash allowance in its place while you are employed. When employment ends, Article 111 pays out the unused days as wages.
I am resigning from a monthly-paid job in Saudi Arabia. How much notice must I give?
At least 30 days in writing for an indefinite contract, under Article 75 as amended. Check your contract for a longer agreed period. Leaving earlier without agreement can trigger compensation under Article 76 equal to the wage for the missing notice days.
My employer ended my contract with no notice. What does the law give me?
For an indefinite contract, Article 76 sets compensation equal to your wage for the skipped notice period: 60 days of wage for a monthly-paid employee. Termination also needs a valid reason stated in writing under Article 75. Raise it with HR first, then the HRSD labour dispute service.
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