The Complete Saudi Labor Law Guide for Expats Contracts, Article 77, and End of Service

The most stressful part of being an expat in Saudi Arabia isn't the heat or the traffic—it is the uncertainty of your job.

"Can my boss fire me without notice?"
"Is my End of Service Benefit calculated on my total salary or just the basic?"
"What actually happens if I resign before my contract ends?"

For decades, labor laws in the Kingdom felt vague, and many expats relied on "verbal promises" or paper contracts hidden in a drawer.

In 2025, that era is over.

The Ministry of Human Resources and Social Development (MHRSD) has digitized the entire relationship. Today, if your contract isn't on Qiwa, it technically doesn't exist. If your sick leave isn't on Sehhaty, it's not valid.

Here is your comprehensive, plain-English guide to your rights as an employee in Saudi Arabia.

1. Qiwa: The Only Contract That Matters

If you are new to the Kingdom, the first app you need to check is Qiwa. This is the government’s digital platform for all labor relations.

The "Paper vs. Digital" Rule

Many companies still ask you to sign a paper offer letter. While this is good for reference, it is not your legal contract.

The Law: Your employer must upload your contract details to the Qiwa platform.
Your Action: You will receive an SMS asking you to log in and "Accept" or "Reject" the contract.
Critical Warning: Read the Qiwa digital contract carefully. If your paper offer says "Salary: 15,000 SAR" but the Qiwa contract says "12,000 SAR," the courts will generally uphold the Qiwa version because you clicked "Accept."

Types of Contracts

Fixed-Term (for Expats): By law, almost all expat contracts are "Fixed Term" (usually 1 or 2 years). They expire on a specific date.
Indefinite (for Saudis): Expats generally cannot have indefinite contracts. If your contract doesn't have an end date, it is assumed to end when your Iqama expires.

2. The Probation Period (The "90-Day" Test)

Every new job starts with a "Probation Period" (Fatra Tajriba). This is the most dangerous time for an employee.

Standard Duration: 90 days (3 months).
Extended Duration: It can be extended to 180 days (6 months), but only if you agree in writing. If they extend it without your signature, it is illegal.
The "Fire at Will" Rule: During probation, either side (you or the company) can terminate the contract instantly without notice and without paying compensation.
No ESB: You do not earn "End of Service Benefits" for the time spent in probation if you leave during this period.

3. Working Hours, Overtime, and Friday Off

Do not let employers abuse your time. The law is very specific about hours.

Standard Hours

The Limit: 48 hours per week (usually 8 hours/day for 6 days).
Ramadan: During the Holy Month of Ramadan, Muslim employees work reduced hours (usually 6 hours/day or 36 hours/week).

Overtime Pay (The 1.5x Rule)

If your manager asks you to stay late or work on your off day (Friday), they must pay you overtime.

The Rate: Your hourly wage plus 50%.
Calculation: (Basic Salary / 30 / 8) x 1.5 x Hours Worked.
Note: High-level managers are often exempt from overtime, but regular staff are not.

4. Leaves & Vacations: Know Your Entitlements

You are human, not a machine. You are entitled to paid time off.

Annual Leave (Vacation)

Standard: 21 days of paid leave per year.
Seniority: After working 5 consecutive years, this increases to 30 days per year.
"Use it or Lose it": Companies can force you to take your leave to avoid piling up days. However, if you leave the company with unused days, they must pay you for them (Encashment).

Official Holidays

You get full pay for:

Eid Al-Fitr: 4 days.
Eid Al-Adha: 4 days.
Saudi National Day: September 23.
Founding Day: February 22.

Personal Leaves (The Hidden Gems)

Many expats don't know they can take these paid leaves:

Marriage Leave: 5 days (fully paid) when you get married.
Paternity Leave: 3 days (fully paid) when your wife gives birth.
Bereavement Leave: 5 days (fully paid) for the death of a "first-degree" relative (parent, spouse, child).
Hajj Leave: 10 to 15 days (paid) to perform Hajj. Condition: You must have worked for 2 years, and you can only take this once with the same employer.

Sick Leave

You cannot just call in sick. You must go to a doctor who generates a digital report in the Sehhaty app.

First 30 days: 100% Pay.
Next 60 days: 75% Pay.
Following 30 days: Unpaid.

5. Resignation, Termination, and Article 77

This is the most controversial part of Saudi Labor Law. How does the relationship end?

Scenario A: The Contract Ends Naturally

If your contract ends on Dec 31st and neither side wants to renew:

The contract expires.
You get your full End of Service Benefit.
You fly home or transfer to a new sponsor.

Scenario B: You Resign (Before Contract Ends)

If you want to leave early:

Notice Period: You must typically give 60 days' notice (check your contract).
The Penalty: Because you are breaking a "Fixed Term" contract, the employer can claim compensation from you (often the remaining salary of the contract, though rarely enforced fully if notice is given).

Scenario C: They Fire You (Article 77)

Article 77 allows an employer to terminate you for an "invalid reason" (e.g., downsizing).

The Compensation: If they use Article 77, they must pay you 15 days of wages for each year of service (unless your contract states a higher "Buyout" amount).
Note: This is in addition to your End of Service Benefit.

6. End of Service Benefits (The "ESB" Calculator)

This is your "Golden Handshake." When you leave Saudi Arabia, you leave with a lump sum cash payment.

The Golden Rule: ESB is calculated on your Gross Salary (Basic + Housing + Transport), not just the Basic. Note: Some older contracts calculate on Basic, but the trend is shifting. Check your specific terms.

How it is calculated:

For the First 5 Years: You get half (1/2) a month's salary for each year served.
For Years 6+: You get one full (1) month's salary for each year served.

The "Resignation Penalty"

If you choose to resign (quit) before your contract ends, you lose money:

Less than 2 years service: No ESB. (0%)
2 to 5 years service: You get 1/3rd of the award.
5 to 10 years service: You get 2/3rds of the award.
10+ years: You get 100% regardless of resignation.

(Pro Tip: If you are close to the 5-year mark, try to stay until you cross it. The financial difference is huge.)

7. The "Non-Compete" Clause

Before you sign a job offer with a rival company, check your old contract for a Non-Compete Clause.

What it says: "The employee cannot work for a competitor in the same city for 2 years."
Is it legal? Yes. Saudi courts uphold this to protect trade secrets.
The Condition: It must be specific in terms of Time (max 2 years), Place (e.g., Riyadh), and Type of Work.
The Reality: If you are a junior staff member, companies rarely enforce this. But if you are a Sales Director or Engineer with sensitive data, they can (and will) block your transfer to a competitor.

8. Women's Rights in the Workplace

Saudi Arabia has massively updated laws to support women (both Expats and Saudis) in the workforce.

Maternity Leave: Women are entitled to 10 weeks of fully paid maternity leave. It starts 4 weeks before the expected delivery date.
Medical Care: The employer must pay for pregnancy and delivery medical costs.
Protection: It is illegal to fire a woman because she is pregnant or during her maternity leave.