Non Fixed Term Contract Template for Saudi Arabia

A Non Fixed Term Contract is the standard employment agreement for permanent positions in Saudi Arabia, establishing an employment relationship that continues indefinitely until terminated by either party according to Saudi Labor Law provisions. Unlike fixed-term contracts that specify an end date, this agreement provides both employers and employees with greater flexibility while ensuring compliance with the Kingdom's comprehensive employment regulations.

When do you need this document?

You need a Non Fixed Term Contract when hiring employees for permanent positions in Saudi Arabia, whether for Saudi nationals or expatriate workers. This contract is essential for establishing clear employment terms for roles such as managers, administrative staff, technical professionals, or any position intended to continue long-term without a predetermined end date. It's particularly important when you want to provide job security to valued employees while maintaining operational flexibility. The contract is also required when transitioning fixed-term employees to permanent status or when establishing new employment relationships that don't have natural expiration points.

Key legal considerations

Your contract must comply with Saudi Labor Law (Royal Decree No. M/51) and include mandatory provisions such as probationary periods, working hours limitations, overtime compensation, and annual leave entitlements. Critical clauses should address salary payment through the Wage Protection System, end-of-service benefit calculations, and termination procedures including notice periods and severance payments. You must ensure GOSI registration and contributions are properly addressed, along with any applicable Saudization requirements under Nitaqat regulations. The contract should clearly define job responsibilities, reporting structures, confidentiality obligations, and disciplinary procedures to prevent future disputes and ensure enforceability under Saudi law.

Legal requirements in Saudi Arabia

Saudi employment law mandates specific contract elements including employee identification details, job titles, workplace locations, and compensation structures. You must register the contract with the Ministry of Human Resources and Social Development and ensure GOSI enrollment within the prescribed timeframes. The agreement must specify working hours that comply with Saudi Labor Law maximums, overtime rates at 150% of regular pay, and minimum annual leave of 21 days. Salary payments must be processed through WPS-approved banks with regular reporting to authorities. For expatriate employees, the contract must align with visa and Iqama requirements, while Saudi national employment must meet Saudization quotas where applicable. Termination provisions must follow prescribed notice periods and end-of-service benefit calculations based on employee tenure and salary history.