Saudi Arabia Labour Law: What You Actually Need to Know

Saudi Arabia Labour Law: What You Actually Need to Know

Whether you are an employee or an employer in the Kingdom, understanding Saudi Arabia's Labour Law means starting with the reference that governs your contractual relationship — from working hours to return-flight tickets. This is a direct answer to the most frequently asked questions, including provisions on travel tickets, workers' rights, the deduction system, and part-time work.

Quick Answer

The Saudi Labour Law was issued by Royal Decree No. M/51 dated 23/8/1426 AH and has been amended several times, most recently by Royal Decree No. M/15 of 1446 AH, which entered into force in February 2025. It regulates the relationship between workers and employers in the private sector and sets out rights and obligations, contract duration, leave entitlements, end-of-service gratuity, and termination provisions. The Ministry of Human Resources and Social Development oversees its implementation, and the Labour Courts have jurisdiction over disputes.

To Whom Does the Saudi Labour Law Apply?

The Saudi Labour Law applies to every worker in the private sector — Saudi and non-Saudi alike — whether under a fixed-term or open-ended contract. It also covers workers in charitable organisations, part-time workers, and those undergoing vocational training and rehabilitation.

However, Article 2 sets out explicit exclusions. The Saudi Labour Law does not apply to:

• Members of an employer's family who are genuinely dependent on the employer and work exclusively for that employer.
• Domestic workers and persons of similar status (who are governed by a separate regulation issued by Council of Ministers Resolution No. 310 of 1434 AH).
• Agricultural workers and private herders, except those employed by agricultural establishments of an industrial character.
• Players and coaches of sports clubs.

Government-sector employees are subject to the Civil Service Law, not the Labour Law. This is a point of frequent confusion — particularly when Saudi nationals search for "Ministry of Human Resources rules for Saudi employees" when they are in fact covered by the Civil Service Law.

Employment Contracts, Working Hours, and Leave Under the Saudi Labour Law

An employment contract under the Saudi Labour Law must be in writing, executed in two copies, and registered. If it is not reduced to writing, the worker alone may prove their rights by any means of evidence (Article 51). A non-Saudi worker's contract must be fixed-term; if no duration is specified, the duration of the work permit is deemed to be the contract term.

Working hours: A maximum of 8 hours per day or 48 hours per week, reduced to 6 hours per day during Ramadan for Muslim employees (Article 98). Overtime is calculated at the hourly rate plus 50%.

Annual leave: 21 paid days, increased to 30 days for workers who have completed 5 consecutive years with the same employer (Article 109).

Other leave: 3 days for marriage, 3 days for the death of a parent, child, or spouse, and 1 day for the birth of a child. Maternity leave for female workers is 12 weeks at full pay under the 1446 AH amendment.

Note: The 1446 AH amendment added a new 3-day leave entitlement for the death of a sibling — a right that did not exist under the previous text.

Every establishment employing 10 or more workers is required to prepare internal work regulations, approved by the Ministry, covering workplace rules, disciplinary sanctions, and benefits. These regulations are not a mere formality; they are the primary reference in any internal dispute.

Part-Time Work Under the Saudi Labour Law

Part-time work under the Saudi Labour Law is governed by a separate ministerial decision appended to the main law. A part-time worker is one who works fewer than half the establishment's standard daily or weekly working hours. The contractual relationship here differs fundamentally from full-time employment:

• End-of-service gratuity provisions and annual leave entitlements do not apply in the same form.
• Remuneration is calculated on an hourly basis as agreed, and must not fall below the proportional minimum wage.
• The employer is not obligated to bear recruitment or return-travel costs where the worker has another primary employer.
• Registration is made through the "Musaned" (Amal) platform by selecting the "part-time" contract type.

This arrangement is widely used to employ students and Saudi women, and it counts partially toward Saudisation quotas under a specific schedule set out in the Nitaqat programme.

Travel Tickets Under the Saudi Labour Law

The question of travel tickets under the Saudi Labour Law is among the most frequently asked — and most misunderstood. Article 40 establishes the general rule: the employer bears the costs of recruiting a non-Saudi worker, the costs of the residency permit (Iqama) and work permit and their renewals, profession-change fees, and the cost of the worker's return ticket to their home country upon termination of the employment relationship.

The annual-leave ticket is not an absolute statutory right; it is subject to whatever the employment contract or the establishment's internal work regulations provide. If the contract stipulates an annual ticket, that provision is binding; if the contract is silent, there is no legal obligation, and custom alone is insufficient.

The final return ticket upon end of service is a right of the non-Saudi worker regardless of the reason for termination, unless the termination was for a reason attributable to the worker under Article 80, or unless the worker has joined another employer, in which case the obligations transfer. Many employers overlook this point and subsequently find themselves liable before the Labour Court.

End of Service, Termination, and Workers' Rights Under the Saudi Labour Law

The end-of-service gratuity is half a month's wage for each of the first five years of service, and one full month's wage for each subsequent year (Article 84). The final wage — including fixed commissions and allowances — is the basis for calculation.

Where a worker resigns voluntarily, they are entitled to:

• One-third of the gratuity if they have completed between 2 and 5 years of service.
• Two-thirds of the gratuity if they have completed between 5 and 10 years of service.
• The full gratuity if they have completed 10 or more years of service.

Termination for a legitimate reason (Article 80) extinguishes the worker's right to gratuity, but the burden of proof lies with the employer. The grounds in Article 80 are exhaustive: assault, serious breach of obligations, disclosure of confidential information, and unauthorised absence for more than 30 non-consecutive days or 15 consecutive days within a single year.

Arbitrary dismissal — termination of an open-ended contract without a legitimate reason — entitles the worker to compensation of not less than 15 days' wages for each year of service, in addition to the notice period (60 days for monthly-paid workers). The worker may bring a claim before the Labour Court within 12 months of the termination date, after which the right is extinguished by limitation (Article 222).

Protecting workers' rights under the Saudi Labour Law begins with registering the contract on the "Qiwa" platform and retaining every letter, notice, and email. What is not documented is difficult to prove.

The Deduction System Under the Saudi Labour Law

The deduction system under the Saudi Labour Law is governed by strict caps, not by the employer's discretion. Article 92 prohibits the deduction of any amount from a worker's wage except in specified cases: recovery of loans, Social Insurance contributions, contributions to savings funds, instalments for housing construction schemes, disciplinary fines, or enforcement of a court judgment.

The general cap on deductions is half of the wage due, unless the worker gives written consent, or unless the deduction is to enforce a court-ordered maintenance payment. Disciplinary fines alone may not exceed the equivalent of 5 days' wages in any single month (Article 70 and the Implementing Regulations).

An employer may not deduct any amount in respect of damage to tools or materials without conducting a written investigation that establishes responsibility and of which the worker is notified. Any deduction outside this framework constitutes a violation and should be reported through the "Wudi" platform in the first instance.

Where Can I Read the Full Text? And What Is the Reference Number?

Many people search for a PDF commentary or guide on the Saudi Labour Law, assuming the authoritative text is a commercial publication. The reality is simpler: the full official text, updated with all amendments, is freely available.

The primary source is the website of the Bureau of Experts at the Council of Ministers (boe.gov.sa), where the law is published with all amendments in a downloadable PDF. The secondary source is the website of the Ministry of Human Resources and Social Development (hrsd.gov.sa), which also publishes the Implementing Regulations and related ministerial decisions.

The official reference number of the Saudi Labour Law is Royal Decree No. M/51 of 1426 AH, as amended by Royal Decree No. M/15 of 1446 AH. Any commentary or PDF guide that has not been updated since February 2025 is incomplete and may mislead you on matters of leave entitlements and notice periods.

The Ministry of Human Resources and Social Development's explanatory materials are also free of charge and, in most cases, more accurate than the commercial guides in wide circulation online.

Disputes: Where Do You Go?

Labour disputes must first be filed through the "Wudi" platform for amicable settlement — a mandatory step before approaching the court. The statutory period for settlement is 21 days. If the dispute is not resolved, the case is automatically referred to the competent Labour Court.

Litigation before the Labour Courts is free of charge for workers. You are entitled to file your claim in the city where your place of work is located. A first-instance judgment is typically issued within 3 to 6 months and is subject to appeal within 30 days.

For further detail on types of disputes and workers' rights under the Saudi Labour Law, see Employment Law Questions.