Guide to hiring employees in Saudi Arabia

Employee Benefits in Saudi Arabia

Mandatory benefits

Statutory benefits in Saudi Arabia include a shortened workday of six hours for Muslim employees during the period of Ramadan, 21 paid leave days and leave for public holidays.

Supplementary benefits

To attract top talent to your business, it’s important to have a strong benefit management plan. It’s customary for employers in Saudi Arabia to offer the following supplementary benefits:

• Additional health insurance
• Transportation allowances
• Plane tickets to go home during annual leave
• Housing allowances
• Remuneration for educational training costs
• Work mobile phones
• Retirement plans

Types of leave available in Saudi Arabia

Annual Leave

Employers are required by law to provide 21 days of paid annual leave per year. Once an employee has worked for the company for five consecutive years, the leave must increase to 30 days.

All annual leave should be granted in full at the start of the year. However, employees will need to ask for permission before taking time off. All leave has to be taken in the year it was granted and employees are not allowed to forgo time off or receive any compensation in its place.

Sick leave

Employers are obligated to provide 90 paid sick days to all employees. This leave is paid at full wages for the first 30 days, reducing to three-quarters of the employee’s normal wage for the remaining 60 days.

If an employee has used all of their sick days, they can receive an additional 30 days of unpaid sick leave.

Maternity and paternity leave

Employees are entitled to ten weeks of paid maternity leave - four weeks prior to the due date and six weeks after the birth of a child. If the employee has worked at the company for less than 12 months, maternity leave is unpaid. Employees who have worked at a company for 1-3 years receive 50% of their wage during maternity leave, and those who have worked for more than three years receive their full wages.

Employees who take maternity leave at full wage can take their annual leave, but this must be unpaid. Those taking maternity leave at 50% of their wage are also entitled to annual leave, but this will be at half of their normal wage.

Employees who have returned from maternity leave are also entitled to periods of rest of up to one hour a day for the purpose of feeding their newborn child according to Article (153) of the Labor Law. This is in addition to rest periods granted to all employees and is calculated based on their actual working hours and will not be be subject to any reduction in wages.

Employers must legally provide employees on maternity leave with medical care during pregnancy and delivery.

New fathers are entitled to three days of paid parental leave.

Hajj leave

Saudi workers who have never performed the ritual pilgrimage to Mecca and Medina are entitled to between 10 and 15 days of paid leave at one point during their tenure in order to perform the pilgrimage.

Student leave

Employers must allow paid leave to all student workers on examination days on the condition that the employees are not repeating a school year. If a staff member does need to repeat a schooling year, they are entitled to unpaid leave on examination days.

Marriage leave

The Saudi government grants newly married employees three days of paid leave.

Bereavement leave

In the event of the death of a spouse or child, employees are allowed 5 days of leave.

If a female employee’s husband passes away, she is entitled to 15-130 days of paid leave, depending on the conditions of her religion.

Public holidays in Saudi Arabia

Saudi Arabia observes the following public holidays:

• Eid al-Fitr (4 consecutive days)
• Arafat Day
• Eid al-Adha (3 consecutive days)
• National Day

Attracting talent in Saudi Arabia

According to global economic reports, in 2022, Saudi Arabia ranks within the world’s top 20 economies and is set to be the fastest-growing major economy in the world in 2022. This makes it an attractive location for business expansion.

To differentiate your company from others in Saudi Arabia, consider building an employee benefit program that enables your employees to grow within their careers as well as achieve a good work-life balance.

For example:

Career development opportunities

Employees who are high performers often seek ways to learn new skills and will be attracted to companies that offer opportunities for career development. You could offer training, professional development plans or one-to-one mentoring programs.

No matter how you choose to build these opportunities into your benefits package, it’s important to focus on offering prospective employees a clear vision of their professional pathway and how they might grow within your organisation.

Introduce policies that promote a strong work-life balance

Work-life balance is an essential construct of the quality of work-life for employees. When work begins to interfere with home life, it can have a detrimental effect on both morale and productivity.

Where possible, companies should provide flexible working conditions that enable their employees to stabilise their work-life balance, whether that’s through flexible working hours or remote and hybrid work environments.

Termination of employment in Saudi Arabia

Notice periods

Under Saudi Arabia's Labor Law, there are two types of contracts: fixed-term contracts and indefinite (open) contracts. A fixed-term contract typically includes a predetermined notice period stated in the employment contract; if this is not the case, the contract will expire once it reaches the end of its term without notice.

For indefinite employment contracts with an unspecified period, both the employee and employer must provide notice least 60 days in advance if they wish to terminate the employment relationship according to Article (75) of the Labor Law.

Employees are entitled to resign due to misconduct by their employer without providing any notice under Article 81 of the Saudi Labor Law. Employers can also terminate a contract without notice if the termination is due to misconduct.

Probationary periods

If an employee resigns during their probationary period, they must provide one day’s notice.

 According to Saudi law, probationary periods must not exceed 30 days.

Severance pay

Employees in Saudi Arabia are entitled to End-of-Service awards following the below formula:

• 15 days of pay for each of the first five years of employment
• A full month of pay for each year of service after that

The basis for this should be the employee’s last noted wage.