Saudi Arabia, hassle free

Minimum wages and salaries:

• Saudi Arabian law requires employers to pay public sector workers 3,000 riyals (about $800 USD) per month.
• There is no minimum wage for private sector or foreign workers.

Probation periods:

• Saudi Arabia enforces a 90-day probationary employment period. At the end of this initial 90-day period, both parties can agree to enter into another 90-day probationary period. Saudi Arabian law requires written consent from both parties for this extension. The maximum probation period is 180 days.

Bonuses:

• Bonuses are detailed in contracts between employer and employee but are not mandated or overseen by government legislation.

Termination and severance considerations:

• Saudi Arabia’s labour law states that an employer must have valid cause to dismiss an employee, as long as the employee has undergone a probationary period.
• Employers are required to pay employees a service payment upon termination. The Labour Court determines the service payment amount.
• Employers can dismiss employees with fixed-term contracts in three ways:
  • Choosing to not renew the employee’s contract at the end of its duration
  • Converting the employee’s contract to an indefinite-term employee contract
  • Dismissing the employee following an event that violates the contract’s terms, provided those terms align with Saudi Arabian Labour Law or public policy
• Employers must provide written reason to dismiss employees with indefinite employment contracts. For employees paid monthly, the employer must notify the employee at least 60 days prior to termination. For all other employees, the employer must notify the employee at least 30 days prior to termination.
• To terminate the employee immediately, the employer must offer payment equal to wages the employee would have received during the notice period.
• Indefinite employment contracts only apply to Saudi nationals. The Labour Law states that expatriate employees are fixed-term employees, with their work permit expiration date serving as the end date of their contract.

Maternity leave:

• Employers must offer female employees at least four weeks of maternity leave before the child is born and six weeks after. Under no circumstances are female employees allowed to work during the six weeks following birth.
• Employers are required to pay female workers wages during maternity leave. The exact wages depend on how long the female worker has been employed and whether she has taken separate maternity leave within the same year.

Paternity leave:

• Employers must offer male employees one day of paternity leave when a child is born. However, many companies provide male employees additional time for paternity leave.

Vacation:

• Employees in Saudi Arabia are guaranteed 21 days off annually, as long as they have worked for the company for at least one year.
• Employees who have worked for a company for six years earn at least 30 days off annually.

Sick leave:

• Employees are entitled to 30 days of sick leave, provided the employee has a medical report proving the leave is necessary.
• Employers must pay employees 100% of their wages for their first 30 days of sick leave and 75% for their next 60 days of sick leave. Following 90 days of sick leave, employers have no obligation to pay employees. However, employers cannot terminate employees because of illness until the employees have fully used their sick leave entitlements.

Other leave situations:

• Employers must grant employees paid leave in the following situations:
  • Marriage
  • The death of a spouse, parent, or child
• Emergencies out of the employee’s control, such as an unexpected illness or an accident involving a family member

Average workweek hours:

• Saudi Arabian law mandates that employees work no more than 48 hours per week over six days, though senior employees and managers are exempt from these limits.
• Employees should not work more than 10 hours in a day or 60 hours in a six-day week. Friday is as a rest day for all workers.
• During Ramadan, employees must not work more than six hours per day and 36 hours per week.

Overtime considerations:

• Employees who work overtime are entitled to 150% pay for every overtime hour.
• Overtime hours include any hours worked on Friday or public holidays.
• Employees cannot exceed 481 hours of overtime work per year.

* WHT differs depending on where the employer is based. Employers in countries Saudi Arabia has entered into tax treaties with are often entitled to WHT relief on dividends, interest, and royalties. Companies should carefully review their country’s tax treaty with Saudi Arabia to ensure they are withholding the correct amounts.