Saudi labour law for HR: end of service, overtime and annual leave
End of service (Articles 84 and 85), overtime (Article 107, amended in 2025) and annual leave (Article 109) under the Saudi Labour Law, checked against HRSD’s official texts, with the calculators that estimate each.
Last updated · 2 min read
The Saudi end-of-service award is half a month’s last actual wage for each of the first five years and a month for each year after (Article 84). Overtime is the hourly wage plus 50% of the basic hourly wage (Article 107). Annual leave is at least 21 days, rising to 30 after five consecutive years (Article 109).
Key takeaways
- End of service is calculated on the last actual wage, which includes allowances (Article 2).
- On resignation: nothing under two years, one third up to five years, two thirds above five, full from ten (Article 85).
- Overtime: the hourly wage plus 50% of the basic hourly wage, not simply 150% of basic (Article 107).
- Annual leave: at least 21 days, and 30 days after five consecutive years (Article 109).
This is general information to help you understand the topic. It is not legal advice. Rules and rates change: always check the official text on the relevant authority’s platform and consult a qualified adviser before acting.
This guide covers the three Saudi Labour Law rules payroll teams apply every month. Every figure below was checked on 20 October 2026 against the Ministry of Human Resources and Social Development’s official texts, including the amendments that took effect on 19 February 2025. It is general information, not legal advice.
End-of-service award (Articles 84 and 85)
Article 84 gives half a month’s wage for each of the first five years of service and a month’s wage for each year after the fifth, calculated on the last wage, with part-years counted pro rata. Article 2 defines “wage” as the actual wage: the basic wage plus allowances, commissions and other amounts due. Article 86 lets the parties agree to exclude commissions and sales percentages.
When the worker resigns, Article 85 applies: nothing under two years, one third for at least two and not more than five consecutive years, two thirds above five and under ten years, and the full award from ten years. Article 87 preserves the full award in force-majeure cases and for a female worker who ends her contract within six months of marriage or three months of giving birth. Article 80 lists the cases with no award.
Use the end-of-service calculator, and read the end-of-service guide for worked examples.
Overtime (Article 107, amended in 2025)
Overtime is paid at the hourly wage plus 50% of the basic hourly wage. All hours worked on holidays and Eids count as overtime. Since 2025, an employer may, with the worker’s consent, give paid compensatory leave instead: at least one and a half hours of leave per overtime hour, taken within 60 days and no more than 30 days a year. Overtime is capped at 720 hours a year unless the worker agrees to more.
The law counts a month as 30 days (Article 2) but sets no hourly division. The Saudi overtime calculator divides the monthly wage by 30 and by the normal daily hours, and asks for both the actual and the basic wage.
Annual leave (Article 109)
Annual leave is at least 21 days a year, rising to at least 30 days once the worker has five consecutive years with the employer. The Saudi leave calculator shows the entitlement for any length of service.
What to check
- Calculate end of service on the actual wage, and record any agreed exclusion of commissions.
- Keep both the actual and the basic wage on file, because overtime uses both.
- Record the reason the employment ended and whether service was consecutive.
Official sources
Frequently asked questions
Is Saudi overtime 150% of the basic wage?
Only if there are no allowances. Article 107 pays the hourly wage plus 50% of the basic hourly wage, so an employee with allowances earns more than 150% of basic for each overtime hour.
Can an employer give time off instead of overtime pay?
Yes, since the 2025 amendments, with the worker’s consent. The Implementing Regulations require at least one and a half hours of paid leave for each overtime hour, scheduled within 60 days and capped at 30 days a year.
Does an employee who resigns after exactly five years get two thirds?
No. Article 85 gives one third for service of at least two and not more than five consecutive years, so exactly five years still gets one third. Two thirds starts above five years.
This is general information to help you understand the topic. It is not legal advice. Rules and rates change: always check the official text on the relevant authority’s platform and consult a qualified adviser before acting.
