Saudi Labor Law 2026: Business Guide After the Amendments

What is the Saudi Labor Law, and who is subject to it?

If your business's contracts or internal work rules were written before February 2025, they may contain clauses that no longer comply with the Law. The probation period, the notice period, the acceptance of resignations and maternity leave all changed under amendments in force since 19 February 2025. This guide brings together what an employer needs to know in 2026, topic by topic, with the article number and a link to the official text, and points you to detailed guides for each topic.

In short: Every paid employment contract under which the worker works under the employer's management or supervision is subject to the Law, except for categories specified in Article 7.

Article 5 provides that the provisions of the Law apply to the following:

• Every employment contract under which a person undertakes to work for an employer, under the employer's management or supervision, in return for a wage.
• Workers of the government and of public bodies and institutions, and workers of charitable institutions.
• Qualification and training contracts with persons not employed by the employer, within the limits of the provisions specific to them.
• Part-time workers, within the limits of matters relating to occupational safety and health, work injuries and what the Minister decides.

Who is excluded from the Labor Law?

Source: Article 7 as amended. The Minister issues special regulations governing the rights and duties of some of these categories, including domestic workers. The 2025 amendment removed from the exclusion list the category of sea workers on ships with a tonnage of less than 500 tons.

General rules that govern every employment contract

• Any condition that contradicts the provisions of the Law is void, as is any release or settlement of the worker's rights during the term of the contract, unless it is more beneficial to the worker.
• Arabic is mandatory in employment contracts, records and the employer's instructions to its workers, and if a foreign language is used alongside it, the Arabic text is the authoritative one.
• Periods and deadlines set out in the Law are calculated according to the Hijri calendar, unless the employment contract or the work regulations provide otherwise. So state the calendar you rely on explicitly in your contracts, because it affects the calculation of the end of the probation period and notice deadlines.

What about the Saudization ratio?

The Law sets a statutory minimum ratio of Saudi workers of 75% of the establishment's total workers and allows the Minister to reduce it temporarily; what is actually required of your business, however, is set by the thresholds of the Developed Nitaqat program for each activity and each entity, in which a Saudi worker is counted with a weight linked to their wage, not by headcount. Details and examples are in the Saudization and Nitaqat guide.

What is new in the Saudi Labor Law after the 2025 amendments?

In short: Royal Decree No. (M/44) dated 8/2/1446H was issued and published in the Official Gazette on 23 August 2024, and it provided that the amendment would take effect 180 days after its publication, so it came into force on 19 February 2025. According to the Ministry of Human Resources and Social Development (MHRSD), the amendment covered the amendment of 38 articles, the repeal of 7 articles and the addition of two new articles.

Duties the amendment added for the employer

The 2025 amendment added the following to the employer's duties in Article 61:

• Refraining from any discrimination between job applicants or the workers it employs on the basis of race, color, sex, age, disability, marital status or otherwise.
• Providing decent housing for its workers; the employer may replace it with an appropriate cash allowance paid with the wage.
• Providing suitable transportation for its workers from their place of residence to the workplace; the employer may replace it with an appropriate cash allowance paid with the wage.

Every employer is now also required to set a policy for training its Saudi workers, qualifying them and raising their skills.

The employment contract: what does the Law require?

In short: The employment contract must be written in two copies and documented; if it is not written, it still stands, and the worker alone may prove it by all means of proof.

An employment contract is a contract between an employer and a worker under which the worker undertakes to work under the employer's management or supervision in return for a wage. Each party keeps a copy of the contract, and either of them may request that it be put in writing at any time.

The unified employment contract and its documentation on the Qiwa platform

The Ministry sets a unified form for each type of employment contract, which primarily includes: the details of the parties, the agreed wage including benefits and allowances, the type and place of work, the start date, the term of the contract if it is fixed-term, and each party's basic rights and obligations. The parties to the contract may add other clauses that do not conflict with the Law, its Executive Regulation and the decisions issued to implement it.

The contract management service on the Qiwa platform allows an establishment to create and document its employees' contracts electronically. The employee reviews the contract from their Qiwa Individuals account and accepts it, rejects it or requests an amendment, and once both parties agree, the contract is considered documented and approved by the Ministry. If the employee does not respond within 10 days of the request being created, the request is canceled automatically and must be sent again.

Fixed-term and open-ended contracts

For a Saudi worker: A fixed-term contract ends when its term expires; if the parties continue to perform it, it is deemed renewed for an indefinite term. If the contract contains a renewal clause, it becomes an open-ended contract when it has been renewed three consecutive times, or when the term of the original contract plus the renewal period reaches four years, whichever is less, and the parties continue to perform it.

For a non-Saudi worker: The contract must be in writing and fixed-term. If the contract does not state its term, its term is deemed to be one year from the date the worker actually started work, and if work continues after that, it is deemed renewed for a similar period. The contract does not become an open-ended contract however long it lasts or however many times it is renewed, even if the parties agree to that.

The compensation figures in the table apply unless the contract specifies a particular compensation, and they are due to the party harmed by the termination, whether the worker or the employer.

Probation period: how long is it, and what are the rules?

In short: The total probation period is no more than 180 days, and there is no probation period at all unless it is stipulated explicitly in the employment contract and its length is clearly specified.

• Each party has the right to terminate the contract during the probation period under the text of the Law; the amendment deleted the wording that allowed the contract to limit this right to one of them.
• According to the Executive Regulation of the Labor Law, the following are not counted in the probation period: the Eid al-Fitr and Eid al-Adha holidays, the National Day holiday, the Founding Day holiday and sick leave.
• If the contract is terminated during the probation period, neither party is entitled to compensation, and the worker is not entitled to an end-of-service benefit for that period. The worker keeps their other statutory rights, including the wage for the days actually worked and payment for their leave balance.
• A worker may not be placed on probation more than once with the same employer. The exception is a written agreement to another probation period, provided it is in a different profession or job, or at least 6 months have passed since the end of the worker's relationship with the employer.

What are the working hours, and how is overtime calculated?

In short: The maximum actual working time is 8 hours a day or 48 hours a week, reduced during Ramadan for Muslims to 6 hours a day or 36 hours a week.

• Rest, prayer and meal breaks are not counted as actual working hours.
• The employer may, after notifying the competent labor office, replace Friday with another day for some of its workers, and the weekly rest day may not be compensated with a cash payment.
• All working hours performed on holidays and Eid days are considered overtime hours.
• Since the 2025 amendment, the employer may, with the worker's consent, credit the worker with days of paid compensatory leave instead of the overtime wage, and the Executive Regulation requires that compensatory leave be no less than one and a half hours for each hour of overtime, and no more than 30 days a year.

How are wages paid, and what is the Wage Protection System?

In short: Wages are paid in the official currency into workers' accounts through banks approved in the Kingdom, and the Ministry monitors their payment through the Wage Protection System (WPS) on the Mudad platform.

• The wage of a worker paid monthly is paid once a month, and the wage of a daily-wage worker at least once a week.
• No amount may be deducted from a worker's wage to settle private claims without the worker's written consent, except in specific cases, including recovery of the employer's loans at no more than 10% of the wage, and contributions to the General Organization for Social Insurance (GOSI). In principle, total deductions may not exceed half of the wage due.
• The Wage Protection System was launched by the Ministry in 2013 and monitors the payment of wages to private-sector employees, Saudis and expatriates, to measure the establishment's compliance with paying on time and in the agreed amount.
• The establishment uploads the wage file through the Mudad platform, its data is matched against GOSI data, and the establishment's compliance rate is updated.
• Since 1 March 2025, the period allowed for uploading the wage protection file has been 30 days instead of 60 days.
• The obligation to comply with the program was applied in phases, and the Ministry announced the start of the seventeenth and final phase, for establishments with 1 to 4 workers, on 1 December 2020.

To estimate an employee's full monthly cost including GOSI contributions, use the salary calculator.

How much annual leave is there, and what other leave does the Law provide?

In short: A worker is entitled to annual leave of no less than 21 days, increased to at least 30 days if the worker has spent 5 continuous years in the employer's service, and the leave pay is paid in advance.

• The worker must take the leave in the year in which it is due, and may not waive it or receive a cash payment in lieu of it during service. The employer sets the leave dates according to work requirements and notifies the worker of the date at least 30 days in advance.
• The worker may, with the employer's consent, postpone all or part of the leave to the following year. The employer may postpone it for no more than 90 days after the end of the year in which it is due if work conditions require, and anything beyond that requires the worker's written consent, without going beyond the end of the following year.
• If the worker leaves work before using their leave, they are entitled to the wage for those days, and are also entitled to it for parts of the year in proportion to the time spent working in it.

Table of other leave under the Labor Law

For maternity leave, the worker distributes the remaining 6 weeks as she wishes, starting from 4 weeks before the expected date of delivery, and she may extend the leave by one month without pay.

How is an employment contract terminated, and how long is the notice period?

In short: In an open-ended contract whose wage is paid monthly, either party may terminate it for a legitimate reason, with written notice given by the employer at least 60 days in advance, or given by the worker at least 30 days in advance.

When does an employment contract end?

Article 74 lists the cases in which the contract ends, including: agreement of the parties, provided the worker consents in writing; expiry of the term of a fixed-term contract; the will of either party in an open-ended contract; resignation; reaching retirement age under the Social Insurance Law, unless the parties agree to continue; force majeure; permanent closure of the establishment; and the issuance of a final decision or judgment terminating the worker's contract in bankruptcy proceedings. The 2025 amendment added the cases of resignation and bankruptcy to this list.

The notice period and pay in lieu of notice

• If the wage is not paid monthly, the period is at least 30 days, whichever party terminates.
• The notice period set out in Article 75 does not apply to a fixed-term contract.
• If the party terminating an open-ended contract does not observe the notice period, it pays the other party an amount equal to the worker's wage for the notice period, unless the parties agree on more than that.
• If the notice is given by the employer, the worker may be absent for one full day a week or 8 hours during the week to look for other work, while being entitled to the wage for the period of absence, provided the worker notifies the employer of the time of absence at least one day in advance. The employer may release the worker from work during the notice period, with the worker's service counted as continuous until the period ends and the worker entitled to the wage for it.

Resignation after the amendment

• A resignation is deemed accepted if 30 days pass from its submission without a response from the employer.
• The employer may postpone acceptance for no more than 60 days if the interest of the work requires, by a reasoned written explanation given to the worker before the 30 days expire.
• The worker may withdraw the resignation within 7 days of submitting it, unless the employer has accepted it before then.
• A resignation request may not validly specify a deferred date for the resignation, and the contract remains in force with all its obligations throughout the period of the request.
• A worker whose contract ended by resignation is entitled to all their statutory rights, and their end-of-service benefit is calculated according to the resignation scale explained in the next section.

Termination for an illegitimate reason

Unless the contract specifies a particular compensation, the party harmed by the termination of the contract for an illegitimate reason is entitled to the wage for the remaining term if the contract is fixed-term, or 15 days' wage for each year of the worker's service if it is open-ended, provided the compensation is no less than the worker's wage for two months.

When is dismissal without a benefit or notice permitted?

The employer may not terminate the contract without a benefit, notice or compensation except in the cases listed exhaustively in Article 80, and provided it gives the worker an opportunity to state the reasons for objecting to the termination. These cases include: assaulting the employer, the responsible manager, a superior or a subordinate during or because of work; the worker's breach of essential obligations, disobedience of lawful orders, or intentional violation of announced safety instructions despite a written warning; resorting to forgery to obtain the job; and absence without a legitimate reason for more than 30 days in the contract year or more than 15 consecutive days after a prior written warning.

What must you do after the contract ends?

• Pay the worker's wage and settle their entitlements within one week at most from the end of the relationship, or within two weeks if the worker was the one who ended the contract.
• Give the worker, on request, a service certificate free of charge, and return all certificates or documents the worker deposited with you.

End-of-service benefit: how is it calculated?

In short: Half a month's wage for each of the first 5 years, and a full month's wage for each year after that. The last wage is used as the basis for the calculation, and the benefit is due for parts of a year in proportion to the time the worker spent in them.

• On resignation: no entitlement before 2 years of service, one third from 2 to 5 years, two thirds if service exceeds 5 years but does not reach 10, and the full benefit at 10 years or more.
• On termination by the employer, the benefit is calculated directly under Article 84, unless the termination falls under one of the cases listed exhaustively in Article 80.
• The full benefit is due if the worker leaves work as a result of force majeure beyond their control, and a female worker is entitled to the full benefit if she terminates the contract within 6 months of her marriage contract or within 3 months of giving birth.
• A fixed-term contract ends when its term expires without any need for notice or a dismissal decision, and the benefit remains due in full.
• If the contract is terminated during the probation period, there is no benefit for that period.

Calculate the benefit for any employee with the end-of-service benefit calculator, and explore examples and special cases in the guide to calculating the end-of-service benefit under the Labor Law.

Work regulations: is your business required to have them?

In short: Yes. Article 13 requires every employer to prepare work regulations for its establishment according to the model prepared by the Ministry, and the Minister may make exceptions to this.

• The Ministry sets one or more unified models of work regulations, covering the rules for organizing work and the provisions on benefits, violations and disciplinary penalties, and sets the controls and mechanisms for approving the regulations.
• The employer may include in the regulations additional terms and provisions that do not conflict with the Law and its Executive Regulation, and must announce the regulations and every amendment to them in a visible place in the establishment or by any means that ensures the employees know their provisions.
• The Executive Regulation requires the work regulations to be approved by the Ministry: an establishment's own regulations are reviewed and certified by a law firm accredited by the Ministry and then submitted to it, and an establishment with fewer than 50 workers may choose the unified model electronically without modification so that it is approved and an electronic certificate is issued for it.
• No penalty may be imposed on a worker that is not provided for in the Law or in the work regulations, so approved and announced work regulations are your basis for any disciplinary action.
• The worker may file a written grievance against a penalty decision with the competent body in the establishment within 30 days of being notified, excluding official holidays. If the grievance is rejected or is not decided in writing within 15 days, the worker may object before the labor courts within 30 days.

Measure how ready your policies and procedures are with the HR health scorecard.

What is the penalty for violating the Labor Law?

In short: A violator is punished with one or more of three penalties: a fine, temporary closure of the establishment, or its permanent closure, and fines are multiplied by the number of persons in respect of whom the violation was committed.

• The penalty may be doubled when the violation is repeated; this is discretionary, not automatic.
• The Ministry imposes administrative penalties of no more than half of the statutory maximum; for anything beyond that, or anything requiring permanent closure, the Ministry files a case before the competent court.
• A penalty decision may be challenged before the competent administrative court.
• The Ministry issues, by ministerial decision, a schedule setting out violations and their corresponding penalties, graded according to the seriousness of each violation, and the schedule in force is published on its website under Ministerial Decision No. 112377.

We deliberately do not state fine amounts here: the amount differs from one violation to another, and the reference for it is the official schedule.

Where can you find the official text of the Saudi Labor Law (PDF)?

In short: MHRSD publishes a consolidated PDF of the Law after the amendments made by Royal Decree No. (M/44). The portal of the Bureau of Experts at the Council of Ministers shows the text of the Law and marks each amended or repealed article, and the text in force of an amended article, with the decree that amended it, appears when you click the article's "amendments" (تعديلات المادة) tab.

Before relying on any copy, make sure it includes the amendments made by Royal Decree No.

How do you apply this in your business? A checklist

1. Review the probation clause in your contract templates: an explicit period totaling no more than 180 days.
2. Review the notice periods in open-ended contracts so they match Article 75: at least 60 days for the employer, and at least 30 days for the worker.
3. Make sure the contracts of non-Saudi workers are in writing and fixed-term, and that the contracts of all workers are documented through the Qiwa platform.
4. Get your work regulations approved according to the Ministry's model through its electronic channels, then announce them to the employees.
5. Update your leave policy: 12 weeks of maternity leave, and 3 days for the death of a brother or sister.
6. Adopt a written procedure for responding to resignations within 30 days of their submission.
7. Follow up on uploading the wage protection file within the allowed period.
8. Calculate your business's accrued end-of-service benefit obligations using the end-of-service benefit calculator.

Who keeps track of these amendments with you?

Keeping track of these amendments and applying them to contracts, leave and work procedures is an ongoing effort that takes up management time. In the HR outsourcing service, a complete team behind a single point of contact handles this with you, across six specialties including Legal Compliance and Policies & Development. Six specialties at the cost of one employee. See what HR outsourcing actually costs you, or compare the two options with the hire or outsource tool.

Sources

1. Labor Law issued by Royal Decree No. (M/51) dated 23/8/1426H, with its amendments, Bureau of Experts at the Council of Ministers 2. Royal Decree No. (M/44) dated 8/2/1446H, Umm Al-Qura Gazette 3. Labor Law as amended by Royal Decree No. (M/44), PDF file, Ministry of Human Resources and Social Development 4. Guide to questions on the 2025 Saudi Labor Law amendments, Ministry of Human Resources and Social Development 5. Executive Regulation of the Labor Law and its annexes, Ministerial Decision No. 115921 6. Schedule of violations and penalties for the Labor Law and its Executive Regulation, Ministerial Decision No. 112377 7. Contract management service (Qiwa platform), the Ministry's services directory 8. Wage protection file upload service (Mudad platform), the Ministry's services directory 9. Wage Protection System, the Ministry's initiatives bank 10. Amendment of the period allowed for uploading wage protection files to 30 days, Ministry news item dated 3 February 2025 11. Start of the final phase of the Wage Protection System for establishments with 1 to 4 workers, Ministry news item dated 1 December 2020 This guide is general information updated to 25 October 2026, and it does not replace referring to the official text or seeking legal advice for your situation.