General Employment Agreement Template for Saudi Arabia

A General Employment Agreement is the cornerstone document that legally establishes the employment relationship between you and your employees in Saudi Arabia. This comprehensive contract ensures compliance with Saudi Labor Law (Royal Decree No. M/51) and related regulations while protecting both employer and employee rights. The agreement covers essential terms including job responsibilities, compensation, benefits, working hours, and termination procedures, all structured according to Saudi Arabian legal requirements and Shariah principles.

When do you need this document?

You need a General Employment Agreement whenever hiring new employees in Saudi Arabia, whether they are Saudi nationals or expatriates. This includes full-time, part-time, or fixed-term positions across all sectors. The agreement is mandatory when formalizing employment relationships that were previously informal or verbal, ensuring compliance with the Wage Protection System and GOSI requirements. You'll also need this document when promoting employees to new positions with significantly different terms, or when converting temporary arrangements into permanent employment contracts.

Key legal considerations

Your employment agreement must clearly define the probationary period, which cannot exceed 90 days under Saudi law, and specify whether the contract is for a definite or indefinite term. The document must include precise compensation details, mandatory benefits like annual leave (minimum 21 days), sick leave provisions, and end of service benefits calculations. Working hours must comply with Saudi Labor Law limits of 8 hours daily and 48 hours weekly, with special provisions during Ramadan. The agreement should address confidentiality obligations, non-compete clauses within legal limits, and termination procedures including notice periods and severance calculations.

Legal requirements in Saudi Arabia

Under Saudi Labor Law, your employment agreement must be written in Arabic, though bilingual versions are acceptable for clarity. The contract must specify GOSI registration requirements and social insurance contributions for both parties. You must include Wage Protection System compliance terms, ensuring electronic salary payments through approved banks. The agreement should reference Saudization (Nitaqat) program requirements if applicable to your business category. Additionally, the contract must comply with Ministerial Resolution No. 116653 regarding workplace safety requirements and include provisions for religious observances and prayer times. All terms must align with Shariah principles and cannot contradict Islamic law or Saudi cultural values.