Saudi Labour Law Article 107: overtime pay and time off in lieu
Amended in the 2025 changes
Article 107 of the Saudi Labour Law requires overtime to be paid at the hourly wage plus 50% of the basic hourly wage, and treats all hours worked on official holidays and Eids as overtime. Since the 2025 amendments, with the worker’s consent, the employer may give paid compensatory leave instead of overtime pay.
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.
What Article 107 says
- Overtime pay: for each overtime hour, the employer pays the hourly wage plus 50% of the worker’s basic hourly wage.
- Time off instead (added in 2025): with the worker’s consent, the employer may credit paid compensatory leave instead of the overtime pay. The Implementing Regulations set the details.
- Weekly standard: where the establishment uses a weekly standard of hours, hours worked above that standard are overtime.
- Holidays and Eids: all hours worked on official holidays and Eids are overtime.
What changed in 2025
Before 19 February 2025, overtime could be paid only in cash. The amendments added the compensatory-leave option. The Implementing Regulations set the conditions:
- At least 1.5 hours of leave for each overtime hour.
- The leave is given within 60 days of the overtime, unless the parties agree otherwise.
- No more than 30 days of compensatory leave a year.
- Leave not taken when employment ends is paid in cash.
Worked example
A worker has a basic wage of 5,000 SAR, housing 1,250 SAR and transport 500 SAR: an actual wage of 6,750 SAR. Using the common method of monthly wage ÷ 30 ÷ 8:
- Hourly actual wage: 6,750 ÷ 30 ÷ 8 = 28.125 SAR
- Premium: 50% × (5,000 ÷ 30 ÷ 8) = 50% × 20.833 = 10.417 SAR
- Each overtime hour: 28.125 + 10.417 = 38.542 SAR
- 10 overtime hours: 10 × 38.542 = 385.42 SAR
If the worker agrees to time off instead, 10 overtime hours earn at least 10 × 1.5 = 15 hours of paid leave, almost two eight-hour days.
What HR should do
- Approve overtime in advance and record the hours in attendance.
- Calculate on the actual hourly wage plus half the basic hourly wage, not on basic alone.
- If time off is used, get the worker’s consent in writing, track the balance, give it within 60 days, and pay any unused balance at the end.
- Track each worker’s yearly total against the 720-hour cap.
Work it out with the Saudi overtime calculator. This page is a general explanation, not legal advice.
Official sources
Frequently asked questions
Is overtime in Saudi Arabia paid at 150% of the basic wage?
Not exactly. Each overtime hour is paid at the hourly actual wage plus 50% of the hourly basic wage. Where the worker has allowances, that is more than 1.5 times the basic hourly wage, and less than 1.5 times the total hourly wage.
Can the employer give time off instead of paying overtime without asking?
No. Paid compensatory leave instead of overtime pay requires the worker’s consent. Without it, overtime is paid in cash.
Is there a limit on overtime hours?
The ministry’s guidance, citing the Implementing Regulations, caps overtime at 720 hours a year, which may be exceeded with the worker’s consent.
