Regular Employee Contract Template for Saudi Arabia
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What is a Regular Employee Contract?
The Regular Employee Contract is a fundamental document used to establish employment relationships in Saudi Arabia, designed to comply with the Saudi Labor Law and related regulations. This contract is essential for any business operating in Saudi Arabia when hiring full-time employees, whether Saudi nationals or expatriates. It encompasses all mandatory elements required by local law, including basic employment terms, compensation structures, working hours, leave entitlements, and end of service benefits. The document ensures compliance with various regulatory requirements including social insurance (GOSI) registration, Wage Protection System (WPS) regulations, and where applicable, Saudization requirements. This template is adaptable for various employment levels while maintaining consistency with legal requirements and protecting both employer and employee interests.
About the Regular Employee Contract
A Regular Employee Contract is your essential legal document for establishing employment relationships in Saudi Arabia. This comprehensive agreement ensures you comply with the Saudi Labor Law (Royal Decree No. M/51) and related regulations while protecting both employer and employee rights throughout the employment relationship.
When do you need this document?
You need a Regular Employee Contract whenever you're hiring full-time employees in Saudi Arabia, whether Saudi nationals or expatriate workers. This applies to permanent positions, fixed-term contracts exceeding three months, and any role requiring social insurance registration through GOSI. The contract is mandatory for compliance with the Wage Protection System (WPS) and essential when sponsoring foreign workers for employment visas. You'll also need this document to satisfy Nitaqat (Saudization) requirements and ensure proper documentation for labor ministry inspections.
Key legal considerations
Your contract must include several critical elements to ensure legal validity under Saudi law. The probation period cannot exceed 180 days for indefinite contracts, and you must clearly specify whether the contract is definite or indefinite term. Compensation details must align with WPS requirements, including mandatory bank transfer arrangements and minimum wage compliance. The contract should address working hours (maximum 8 hours daily, 48 hours weekly), overtime calculations, and annual leave entitlements (21-30 days based on service length). End of service benefits calculations must follow the prescribed formula under Saudi Labor Law, and termination procedures must comply with notice requirements and valid reasons for dismissal.
Legal requirements in Saudi Arabia
Saudi Labor Law mandates specific contract provisions that you cannot modify or waive. Your contract must be written in Arabic (with authorized translations permitted) and registered with the Ministry of Human Resources and Social Development. Social insurance registration through GOSI is mandatory within 30 days of employment commencement, covering workplace injuries, disabilities, and old-age pensions. For expatriate employees, the contract must align with visa sponsorship requirements and include clear terms about residence permit responsibilities. The Wage Protection System requires salary payments through approved local banks with monthly electronic filing of wage data. Additionally, contracts must comply with Nitaqat color classification requirements, particularly regarding the ratio of Saudi to non-Saudi employees in your organization.
GOVERNING LAW
Applicable law
This Regular Employee Contract is drafted to comply with Saudi Arabia law. Key legislation includes:
Social Insurance Law: Regulations governing mandatory social insurance contributions for employees, including workplace injury insurance and pension contributions through GOSI (General Organization for Social Insurance)
Wage Protection System (WPS) Regulations: Regulations requiring employers to pay wages through approved local banks and submit wage files to the Ministry of Human Resources and Social Development
Ministerial Decision No. 1982 dated 6/4/1437H: Regulations regarding work hours, weekly rest days, and annual leave calculations
Nitaqat (Saudization) Program Regulations: Requirements for employing Saudi nationals and related quotas based on company size and sector
Saudi Data Protection Regulations: Guidelines for handling employee personal data and privacy protection requirements
Anti-Harassment Regulations: Workplace harassment prevention requirements that must be addressed in employment policies
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