Permanent Contract Template for Saudi Arabia

A Permanent Contract is a legally binding employment agreement that establishes an ongoing employment relationship between an employer and employee in Saudi Arabia. Unlike fixed-term contracts, permanent contracts provide job security and comprehensive benefits while ensuring compliance with Saudi Labor Law and related regulations. You need this document whenever hiring employees for indefinite periods, whether they are Saudi nationals or expatriate workers.

When do you need this document?

You require a Permanent Contract when establishing long-term employment relationships in Saudi Arabia. This includes hiring full-time employees for senior management positions, specialized technical roles, or any position where you intend to maintain an ongoing employment relationship. The contract is essential for compliance with Nitaqat Saudization requirements and ensures proper registration with the Ministry of Human Resources and Social Development. You also need this document when converting temporary or contract workers to permanent status, or when hiring expatriate employees who require work visa sponsorship.

Key legal considerations

Your Permanent Contract must include a probation period not exceeding 90 days under Saudi Labor Law, during which either party may terminate the employment with notice. The contract must specify working hours, which cannot exceed 8 hours per day or 48 hours per week, with reduced hours during Ramadan for Muslim employees. You must include provisions for annual leave entitlements, sick leave, and end-of-service benefits calculated according to Saudi Labor Law requirements. The contract should address social insurance registration with GOSI, wage protection system compliance for electronic salary transfers, and termination procedures including notice periods and severance calculations.

Legal requirements in Saudi Arabia

Under Saudi Labor Law, your Permanent Contract must be written in Arabic and registered with the Ministry of Human Resources and Social Development within the prescribed timeframe. You must ensure compliance with Wage Protection System regulations by establishing electronic salary transfer arrangements through approved banks. The contract must specify social insurance contributions and workplace injury coverage through GOSI registration. For expatriate employees, you must include visa sponsorship obligations and ensure compliance with Nitaqat Saudization quotas. The contract must also incorporate mandatory leave entitlements including annual leave, sick leave, maternity leave, and religious holidays as specified under Saudi law.