Non Fixed Term Employment Contract Template for Saudi Arabia

A Non Fixed Term Employment Contract is the standard employment agreement for permanent positions in Saudi Arabia, creating an ongoing employment relationship without a specified end date. Under Saudi Labor Law (Royal Decree No. M/51), this contract type provides maximum job security for employees while giving employers the flexibility to maintain long-term workforce stability. You'll need this document whenever hiring employees for permanent positions in Saudi Arabia, whether they are Saudi nationals or expatriate workers.

When do you need this document?

You require a Non Fixed Term Employment Contract when establishing permanent employment relationships in Saudi Arabia. This includes hiring Saudi nationals for full-time positions, recruiting expatriate workers for ongoing roles, expanding your workforce with permanent staff, or converting fixed-term contracts to permanent arrangements. The document is essential for companies seeking to build stable teams while ensuring compliance with Saudi employment regulations and Nitaqat program requirements for Saudization quotas.

Key legal considerations

Several critical clauses must be included to ensure legal compliance and protect both parties. The probation period cannot exceed 180 days and must clearly define evaluation criteria and termination procedures. Working hours must comply with Saudi Labor Law limits of 8 hours daily and 48 hours weekly, with specific provisions for Ramadan. Leave entitlements must include annual leave (minimum 21 days), sick leave, and maternity leave as mandated by law. End of service benefits calculations must follow the statutory formula based on years of service. Termination clauses must distinguish between termination with and without cause, including notice periods and severance pay obligations. The contract must also address social insurance contributions to GOSI and compliance with Wage Protection System requirements for salary payments through approved banks.

Legal requirements in Saudi Arabia

Saudi Labor Law mandates that all employment contracts be written in Arabic, though bilingual versions are permitted for clarity. The contract must be registered with the Ministry of Human Resources and Social Development within 60 days of commencement. For expatriate employees, the contract must align with work permit conditions and specify the employee's profession as listed in their iqama. Employers must ensure compliance with Nitaqat program requirements, maintaining appropriate ratios of Saudi to non-Saudi employees based on company size and sector. Social insurance registration with GOSI is mandatory for all employees, with contributions calculated on basic salary. The contract must specify that wages will be paid through the Wage Protection System via approved local banks. Additionally, any amendments to the contract must be documented in writing and registered with relevant authorities to maintain legal validity.