Labor Contract Form Template for Saudi Arabia

A Labor Contract Form is the foundational legal document that establishes the employment relationship between you as an employer and your employees in Saudi Arabia. This contract must comply with Saudi Labor Law (Royal Decree No. M/51) and related ministerial regulations, serving as your primary tool for creating legally compliant employment arrangements that protect both parties' rights and obligations.

When do you need this document?

You need a Labor Contract Form whenever you hire any employee in Saudi Arabia, whether Saudi nationals or foreign workers. This includes full-time permanent positions, fixed-term contracts, part-time arrangements, and temporary employment. The contract is mandatory for obtaining work permits and residency permits for foreign employees, registering workers with GOSI for social insurance coverage, and demonstrating compliance with Nitaqat Saudization requirements during government inspections. You'll also need this document when transferring employees between company branches, modifying existing employment terms, or renewing fixed-term contracts.

Key legal considerations

Your Labor Contract Form must include specific mandatory provisions under Saudi law. The probation period cannot exceed 90 days for most positions, and you must clearly define working hours within the legal maximum of 48 hours per week during Ramadan and 40 hours otherwise. Compensation terms must comply with minimum wage requirements and include details about end-of-service benefits calculated according to Saudi Labor Law formulas. The contract must specify annual leave entitlements, which begin at 21 days annually and increase with length of service. You're required to provide clear termination procedures and notice periods, with different rules applying to limited and unlimited contracts. Female employees have additional rights regarding maternity leave and workplace accommodations that must be explicitly addressed.

Legal requirements in Saudi Arabia

Saudi law requires your Labor Contract Form to be drafted in Arabic, though you may include an English translation for clarity. The contract must be registered with the Ministry of Human Resources and Social Development within seven days of the employee starting work. You must ensure compliance with the Wage Protection System (WPS) by including electronic salary transfer requirements and maintaining detailed payroll records. Foreign workers require additional contract provisions covering residency permit conditions, repatriation obligations, and passport retention policies. The contract must reflect recent labor law reforms, particularly regarding women's employment rights, flexible working arrangements, and enhanced protections for domestic workers. All contracts must include GOSI registration requirements and specify the employer's obligations for occupational hazards insurance and social insurance contributions.