The Insider's Guide to Hiring in Saudi Arabia

Overview

Hiring in Saudi Arabia requires a written, fixed-term employment contract issued in Arabic, typically bilingual. Standard terms include a probation of up to 90 days, 21 calendar days of paid annual leave, and a 60-day notice period for indefinite contracts.

Employment Contract Elements

What to Include in a Saudi Employment Contract

• Full name and ID number — passport for relocating expats, passport plus Iqama for expats inside KSA, national ID plus passport for Saudi nationals
• Government-approved job title
• Start date and contract duration
• Working hours
• Probation terms (max 90 days, extendable once to 180 days with written consent)
• Notice period (minimum 60 days for indefinite contracts unless otherwise agreed)
• Termination provisions covering grounds for termination, severance entitlements, and end-of-service benefit calculations

Payroll

Saudi Arabia operates a monthly payroll cycle, with employees typically paid between the 27th and 28th of each month in Saudi Riyal (SAR).

Corporate Income Tax (CIT)

VAT

Leave and Holidays

Saudi Arabia offers generous statutory leave alongside nine paid public holidays. Allowances scale with length of service and vary by leave type.

Termination and Offboarding

Termination Types

Final Payment Deadlines

Employee Resignation

Employees can resign voluntarily with written notice, submitted in writing and then on the Qiwa platform. Notice periods:

• During probation, either party can terminate without notice.
• After probation, 30 days if the employee initiates the resignation.

If either party ends the contract without giving the required notice, they must compensate the other with an amount equal to the employee’s salary for the notice period (or the remainder of the contract, whichever applies).

Employees can also resign without notice in specific circumstances, including: employer non-compliance with key contractual or legal obligations; misrepresentation of the job or working conditions at hiring; assignment of duties that materially differ from the contract (beyond a 30-day-per-year temporary adjustment); violence, immoral behaviour, or abuse by the employer, supervisor, or their family; persistent cruelty, injustice, or verbal abuse; serious health or safety risks the employer fails to address; or actions by the employer that effectively force the resignation.

End-of-service benefits: half a month’s wage for each of the first five years and a full month’s wage for each additional year. Employees who resign within the first two years are not entitled to gratuity unless the contract states otherwise.

Other payments: unused annual leave and any outstanding dues.

Documentation: email confirmation, last payslip, experience letter, transfer process for expats, removal from GOSI (Saudi nationals only), and the resignation letter.

Termination With Cause

Termination with cause is not available under the Employer of Record setup in Saudi Arabia due to local labour-law restrictions. Compliant alternatives are mutual termination agreements, employee resignation, or fixed-term contract expiry. To use termination with cause, the employer must establish its own Saudi entity.

Termination Without Cause

Termination without cause is likewise not available under an Employer of Record. Use a mutual termination agreement, employee resignation, or fixed-term contract expiry — or establish a Saudi entity to access this route.

Mutual Termination Agreement (MTA)

Under Article 74, an employment contract may be terminated by the employer and employee’s mutual written consent. The employee’s agreement must be in writing to be valid and enforceable.

Notice: for indefinite-term contracts, unless otherwise mutually agreed, written notice must be at least 60 days for monthly-paid employees and at least 30 days for non-monthly-paid employees.

End-of-service benefits: EOSB applies — half a month’s salary for each of the first five years, plus a full month’s salary for each additional year, based on the final full monthly wage.

Other payments: payment for unused leave. On request, the employer must provide a work certificate stating the employee’s job title, employment dates, and last salary (with reasons explained if any negative remarks are included). During the notice period, employees are entitled to eight paid hours per week or one paid day per week to look for another job.

Documentation: the MTA is a signed written agreement that must specify the end date and terms.

Fixed-Term Contract

If the contract ends normally: no notice is required, but it is common for either party to confirm in writing at least 30 days before expiry whether they wish to renew or end the contract. Employees are entitled to EOSB on the standard half-month-then-one-month formula; gratuity may not apply for contracts under two years unless otherwise agreed. Other entitlements include unused annual leave, final salary and any outstanding dues (e.g. bonuses, commissions), a certificate of service on request, and repatriation costs for expat employees where applicable.

If the employer terminates early: a 60-day notice period is required. The employee is entitled to the same EOSB as if the contract had ended normally, and compensation for unjust early termination may apply (typically the wage for the remainder of the contract). Additional entitlements cover unused leave, final salary, any other contractual entitlements, repatriation costs where applicable, and further compensation if the termination violates the contract or labour law.

Redundancy

Employers can initiate redundancy for valid business reasons such as restructuring or a role no longer being required.

Form: the employer must clearly communicate the reason in writing and properly document the business case.

Notice period: minimum 60 calendar days for indefinite contracts. If no notice is given, payment in lieu equal to 60 days’ wages is required.

End-of-service benefits: EOSB applies in redundancy cases.

Other payments: unused leave.

Late Payment Penalties

Employers who fail to pay final entitlements on time may face:

• Fines issued by MHRSD
• Suspension of government services (e.g. work visas, GOSI transactions)
• Labour-court claims by the employee

Visa and Immigration Compliance

The employer must process the Final Exit Visa once the employment contract ends, ensuring all dues — final salary, EOSB, and any fines — are cleared beforehand. Employees can apply for the Final Exit Visa themselves through Absher or Qiwa once their contract has ended or expired, but employers are notified and have 10 working days to object for legitimate reasons such as pending disputes. Employers remain responsible for ensuring the employee actually leaves the country; if departure does not occur, the visa must be cancelled and the situation reported to the authorities.

Airfare and ticket obligations (Article 40): the employee pays for their own ticket if they resign before contract completion, terminate during probation, or opt for a sponsorship transfer instead of final exit (in which case the new employer assumes the ticket cost).