Regular Employment Contract Template for Saudi Arabia

A Regular Employment Contract is the fundamental legal document that establishes and governs the employment relationship between you as an employer and your employee in Saudi Arabia. This contract must comply with the comprehensive framework of Saudi employment law, primarily the Saudi Labor Law (Royal Decree No. M/51), and serves as your primary protection against employment disputes while ensuring regulatory compliance.

When do you need this document?

You need a Regular Employment Contract whenever you hire a new employee in Saudi Arabia, whether they are Saudi nationals or expatriate workers. This includes situations where you're formalizing existing informal employment relationships, converting temporary arrangements to permanent positions, or ensuring compliance during labor inspections. The contract is mandatory for all employment relationships and must be executed before the employee begins work. You'll also need to update or renew these contracts when significant terms change, such as salary adjustments, role modifications, or when converting from fixed-term to unlimited contracts.

Key legal considerations

Your employment contract must include several mandatory provisions under Saudi law. The probation period cannot exceed 90 days and must be clearly specified, during which either party can terminate without notice. Working hours are strictly regulated, with a maximum of 8 hours per day and 48 hours per week during Ramadan, reducing to 6 hours daily. You must specify the exact salary amount and payment method, as electronic payment through the Wage Protection System (WPS) is mandatory for most employers. Annual leave entitlements, sick leave provisions, and end of service gratuity calculations must comply with statutory minimums. The contract should clearly outline grounds for termination and notice periods, as wrongful termination can result in significant compensation obligations.

Legal requirements in Saudi Arabia

Saudi employment law imposes specific requirements that your contract must address. You must comply with Saudization (Nitaqat) program requirements if applicable to your business size and sector, maintaining minimum ratios of Saudi employees. Social insurance registration through GOSI is mandatory for all employees, and contribution rates must be clearly understood. For expatriate employees, the contract must align with their visa and work permit conditions, including job title consistency and sponsor obligations. The contract must be in Arabic or include an Arabic translation, and both parties must sign before a witness or have it notarized. Additionally, you must register the contract with the Ministry of Human Resources and Social Development within 60 days of execution, and maintain proper documentation for labor inspection purposes.