Saudi employment runs on the Labour Law, substantially amended in 2024 with effect from February 2025 — the largest overhaul in years. Expat contracts are fixed-term by default (an unwritten or indefinite contract with an expat is deemed to run for the Iqama’s duration). Probation is up to 180 days. Termination requires a lawful ground; Article 80 lists the misconduct grounds allowing dismissal without notice or gratuity, and Article 81 lets an employee leave without notice, keeping the gratuity, where the employer breaches. Unlawful termination triggers compensation. Employees get 21 days’ annual leave (30 after five years), and the working week is 48 hours, reduced to 36 in Ramadan for Muslims.
Saudi employment law is more protective than expats expect and less familiar than they assume — and it was rewritten in 2024. The amendments that took effect in February 2025 changed notice periods, resignation rules, probation, maternity and other entitlements, and they render a great deal of previously accurate guidance obsolete. Around this sits a system that is genuinely rules-based (Saudi labour courts exist, function, and rule against employers), materially different from Western practice (fixed-term contracts as the norm, an end-of-service gratuity in place of a pension, Article 80 as the disciplinary framework), and enforced through digital platforms that have made compliance far more visible. This guide covers the 2026 position: contract types, probation, working hours and Ramadan, leave, the termination grounds in Articles 80 and 81, compensation for unlawful dismissal, and how disputes run.
Are expat contracts fixed-term?
In effect, yes. Where an expat’s contract is unwritten or does not specify a term, the law deems it to run for the duration of the work permit. Fixed terms renew, and repeated renewals over defined periods can convert the relationship — but the fixed-term structure remains the norm for expatriates.
What is Article 80?
The list of misconduct grounds on which an employer may terminate without notice, without compensation and without the end-of-service gratuity — assault, serious breach of duties, forgery, gross negligence causing loss, unauthorised absence beyond defined limits, and similar. It is the employer’s disciplinary framework, and it is narrow and specific.
How much leave do I get?
21 days of paid annual leave, rising to 30 days after five years of service with the same employer, plus public holidays (Eid al-Fitr, Eid al-Adha, National Day and Founding Day). The working week is 48 hours, reduced to 36 during Ramadan for Muslim employees.
How do contracts and probation work?
For expatriates the contract is, in substance, fixed-term: where the contract is unwritten or omits a term, the law treats it as running for the period of the work permit. Contracts must be in Arabic (an English version may accompany it, but the Arabic prevails — a point foreign professionals consistently overlook and occasionally regret), registered on the Qiwa platform, and must state the wage, the job title, and the term.
Probation may be up to 90 days, extendable by written agreement to 180 days in total. During probation, either party may terminate without notice or compensation (and without the gratuity). The 2024 amendments clarified aspects of probation and its extension — verify the current drafting, and note that an employee cannot be placed on probation twice with the same employer for the same role.
The 2024 amendments (effective February 2025) are the reason to distrust older guidance: they revised notice periods (introducing distinct treatment for employer-initiated and employee-initiated termination of indefinite contracts), reformed resignation (introducing a clearer framework with defined employer response times), extended maternity leave, introduced or clarified other leave entitlements, and tightened obligations around training and Saudization. If your reference material predates them, replace it.
What are the working-hour and leave entitlements?
The standard week is 48 hours (eight hours a day, six days) — though most professional employers operate a five-day, 40-hour week in practice. During Ramadan, working hours for Muslim employees are reduced to six hours a day / 36 a week — a legal requirement, and one that reshapes the working month entirely. Overtime is paid at 150% of the hourly wage.
Annual leave: 21 days rising to 30 days after five years with the employer. Public holidays cover the two Eids, National Day and Founding Day. Sick leave follows a statutory scale: full pay for the first 30 days, 75% for the next 60, and unpaid for the following 30, within a single year.
Maternity leave was extended by the 2024 amendments (to 12 weeks, with provisions around distribution and pay), and paternity leave of three days applies. The 2024 package also addressed bereavement and other leave categories. Note the practical point: many of these entitlements are more generous than Gulf stereotypes suggest, they are enforceable in the labour courts, and Saudi courts do enforce them — the reputational picture and the legal picture have diverged considerably.
How does termination actually work?
A fixed-term contract ends naturally on expiry — and non-renewal is not a dismissal, which is the structural reason expat employment in the Gulf feels less secure than European employment even where the law is protective. Termination during the term requires a lawful ground.
Article 80 lists the grounds on which an employer may terminate without notice, without compensation and without the gratuity: assault on the employer or managers; serious failure to perform essential obligations; proven dishonesty or forgery; conduct causing deliberate material loss (subject to prompt reporting); repeated violation of instructions after warning; unauthorised absence beyond defined limits (more than 20 days in a year or 10 consecutive days, after written warnings); and similar. It is a closed and narrow list, and the employer must follow the procedure — including giving the employee an opportunity to be heard.
Article 81 is its mirror: the employee may leave without notice, retaining the full end-of-service gratuity and with compensation, where the employer has breached — failing to pay wages, failing to fulfil essential obligations, assault, fraudulent misrepresentation of the terms at hiring, danger to safety, or hostile treatment. This is the most under-used provision in Saudi employment law, and for an expat whose employer has stopped paying or has misrepresented the job, it is the exit that preserves everything you are owed.
What does unlawful termination cost the employer?
Where an employer terminates without a valid ground, the employee is entitled to compensation. The statutory default (absent a higher figure agreed in the contract) is: for a fixed-term contract, the wages for the remaining period of the contract; for an indefinite contract, 15 days’ wages for each year of service, with a minimum of two months’ wages. The end-of-service gratuity is payable on top, along with notice or pay in lieu, and accrued leave.
The practical significance for an expat on a two-year fixed-term contract terminated after six months: eighteen months’ wages, plus the gratuity, plus notice. That is a serious exposure, and it is why Saudi employers who want someone gone typically negotiate rather than terminate — the same pattern our Japan and France chapters describe, in a very different legal tradition.
Additional protections: termination during sick leave, during maternity leave, or in retaliation for filing a complaint is unlawful and attracts compensation. And where an employer’s conduct falls under Article 81, the employee who resigns in reliance on it is treated as having been unlawfully terminated — preserving both the gratuity and the compensation claim.
Non-competes, wage protection, and the digital enforcement layer
Non-compete clauses are enforceable but constrained: they must be in writing, limited in duration (a maximum of two years from the end of the relationship), and limited in geography and subject matter. Saudi courts scrutinise them, and an overbroad clause is unenforceable — but a properly drafted one will bite, and it can interact painfully with the job-mobility rights the 2021 reforms granted.
The Wage Protection System (WPS) requires employers to pay wages electronically through registered banks, with the payment data reported to MHRSD. Non-compliance triggers escalating sanctions including suspension of the employer’s ability to issue or renew work permits — which is the single most effective enforcement mechanism in Gulf labour regulation, because it directly threatens the employer’s ability to operate. It also means an expat whose wages go unpaid has documentary evidence available to the authorities without needing to prove anything.
Everything now runs through Qiwa (contracts, transfers, establishment data), Absher (individual government services, exit permissions), and Mudad (wage compliance). The digitisation has done more to protect expat workers than any single legal reform: it made the employer’s obligations visible, timestamped and auditable — and an expat who registers on these platforms and reads their own records holds a considerable advantage over one who does not.
How do disputes run — and what should expats document?
Labour disputes go first to the Labour Offices for amicable settlement (a mandatory conciliation stage, with a defined window), and then to the Labour Courts — specialised courts established under the judicial reforms, with a Court of Appeal above them. Proceedings are in Arabic; representation is advisable; and the courts have shown a genuine willingness to rule against employers on wage, gratuity and unlawful-termination claims.
Limitation is short: claims must generally be brought within 12 months of the end of the employment relationship. Do not wait.
Documentation, and here it matters more than in any other chapter of this series because the language and legal system are unfamiliar: the Arabic contract (the operative one); the Qiwa record of your contract and any transfer requests; WPS payment records (which prove what was paid and when); your Iqama and its recorded profession; any written warnings; correspondence about promised allowances (a great many Gulf disputes turn on allowances promised verbally and never paid); and a dated log. The expat who arrives with documents wins; the expat who arrives with a grievance and a memory does not.
Frequently Asked Questions
Can my employer stop me leaving the country?
Far less than the old reputation suggests. Exit and re-entry visas and final exit can now be requested by the worker through Absher, with the employer notified rather than granting permission, under the 2021 reforms. What can still block departure is an unresolved financial claim or a travel ban obtained through the courts — which is a legal process, not an employer’s whim.
What if my employer stops paying me?
This is an Article 81 breach: you may terminate without notice, keep the full end-of-service gratuity, and claim compensation — and unpaid wages for three months also unlock the right to transfer to a new employer without consent under the 2021 reforms. The Wage Protection System means the non-payment is already documented. Act; do not wait and hope.
Are non-competes enforceable?
Yes, if properly drafted — written, and limited to a maximum of two years, with reasonable geographic and subject-matter scope. Saudi courts will strike down overbroad clauses but will enforce reasonable ones, and a non-compete can complicate the job-mobility rights you otherwise hold. Read the clause before you sign, and negotiate it down.
Should I worry about the Arabic version of my contract?
Yes. It is the legally operative document, and discrepancies are resolved in its favour. Have it reviewed independently — particularly the definition of ‘wage’ (which determines the size of your gratuity), the term, the notice provisions, and any non-compete. This is an hour of a lawyer’s time against a potentially six-figure gratuity.
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