Hourly Employment Contract Template for Saudi Arabia

An hourly employment contract is a legal agreement that establishes an employment relationship where compensation is calculated based on actual hours worked rather than a fixed monthly salary. In Saudi Arabia, these contracts must comply with Saudi Labor Law (Royal Decree No. M/51) and incorporate specific provisions for hourly wage calculations, overtime compensation, and mandatory social insurance contributions.

When do you need this document?

You need an hourly employment contract when hiring employees for part-time positions, seasonal work, or roles with variable scheduling requirements. This contract type is particularly common in retail, hospitality, healthcare support roles, and consulting services where workload fluctuates. It's also essential when establishing employment relationships that require flexibility in working hours while ensuring full compliance with Saudi labor regulations. Companies often use hourly contracts for project-based work, temporary assignments, or when testing new positions before offering full-time employment.

Key legal considerations

Several critical legal elements must be addressed in your hourly employment contract. The hourly rate calculation must comply with Saudi Arabia's minimum wage requirements and include clear overtime provisions at 150% of the regular rate for hours exceeding the standard 48-hour work week. You must specify the payment schedule to ensure compliance with the Wage Protection System (WPS), which requires electronic salary transfers and timely payment processing. The contract should address social insurance contributions, end-of-service benefits calculations based on actual hours worked, and annual leave entitlements proportionate to working hours. Additionally, include termination procedures that comply with Saudi Labor Law notice periods and severance calculations.

Legal requirements in Saudi Arabia

Saudi Arabia imposes specific requirements for hourly employment contracts that differ from standard employment agreements. The contract must be written in Arabic or include an Arabic translation, and both parties must sign in the presence of authorized witnesses. You must register the contract with the Ministry of Human Resources and Social Development and ensure compliance with Saudization (Nitaqat) program requirements if applicable to your business category. The agreement must specify maximum daily working hours (not exceeding 8 hours) and weekly limits (48 hours maximum), with mandatory rest periods and Friday as the official weekly holiday. For expatriate employees, include visa sponsorship obligations, residence permit requirements, and repatriation provisions. The contract must also address workplace safety obligations, disciplinary procedures, and dispute resolution mechanisms in accordance with Saudi labor courts jurisdiction.