1 Year Employment Contract Template for Saudi Arabia

A 1 Year Employment Contract is a fixed-term employment agreement that establishes a formal working relationship between an employer and employee in Saudi Arabia for exactly one year. This contract type provides clear expectations and legal protections for both parties while ensuring compliance with Saudi Labor Law and related employment regulations.

When do you need this document?

You need this contract when hiring employees for project-based work, seasonal positions, or temporary roles with defined end dates. It's particularly useful for companies expanding operations, covering maternity leave replacements, or bringing in specialized expertise for specific timeframes. Organizations often use fixed-term contracts to evaluate employee performance before offering permanent positions, or when business conditions require workforce flexibility. This contract type is also essential for companies navigating Saudization requirements while maintaining operational efficiency.

Key legal considerations

Your contract must clearly define the probation period, which cannot exceed 90 days under Saudi Labor Law. Include specific provisions for working hours, overtime compensation, and annual leave entitlements as mandated by law. The contract should address social insurance registration with GOSI and compliance with the Wage Protection System for salary payments through approved banking channels. Termination clauses must align with Saudi Labor Law requirements, including notice periods and end-of-service benefits calculations. Consider including confidentiality provisions, intellectual property rights, and non-compete restrictions where legally permissible.

Legal requirements in Saudi Arabia

Under Saudi Labor Law (Royal Decree No. M/51), your contract must be written in Arabic or bilingual with Arabic translation. You must register the contract with the Ministry of Human Resources and Social Development and enroll the employee in social insurance through GOSI within 30 days. Salary payments must comply with Wage Protection System regulations, requiring electronic transfers through approved banks with detailed payment records. The contract must specify working hours not exceeding 8 hours daily or 48 hours weekly, with provisions for Ramadan reduced hours. Include mandatory leave entitlements including annual leave (21-30 days based on service length), sick leave, and other statutory leave types. Ensure compliance with Saudization ratios if applicable to your business sector and size.