Written Contract Of Employment Template for Saudi Arabia

A Written Contract Of Employment is your essential legal document for establishing any formal employment relationship in Saudi Arabia. Under Saudi Labor Law, specifically Royal Decree No. M/51, you are legally required to create a written employment contract that clearly defines the terms and conditions of employment between you and your employee.

When do you need this document?

You need this contract whenever you hire any employee in Saudi Arabia, whether Saudi national or expatriate worker. The contract becomes mandatory before an employee begins work and is essential for processing work permits and residency applications through the Ministry of Human Resources and Social Development. You'll also need it when converting informal work arrangements into legally compliant employment relationships, when hiring domestic workers, or when establishing employment terms for part-time or fixed-term positions. Saudi authorities require this document for labor inspections, social insurance registrations, and Wage Protection System (WPS) compliance.

Key legal considerations

Your employment contract must include several mandatory elements to ensure legal compliance. You must specify the employee's job title, duties, and reporting structure, along with clear compensation details including basic salary, allowances, and benefits. The contract should define working hours in compliance with Saudi Labor Law's 8-hour daily and 48-hour weekly limits, and include provisions for overtime compensation. You need to address probationary periods (maximum 90 days for most positions), annual leave entitlements (minimum 21 days), sick leave provisions, and termination procedures. The contract must also cover social insurance obligations, end-of-service benefits calculations, and any applicable non-compete clauses. For expatriate employees, include visa sponsorship responsibilities and residency permit obligations.

Legal requirements in Saudi Arabia

Saudi Labor Law mandates that your employment contract be written in Arabic, though you may include additional language versions. You must register the contract with the Ministry of Human Resources and Social Development and ensure compliance with Saudization (Nitaqat) requirements if applicable to your business category. The contract must align with Wage Protection System regulations, requiring electronic salary transfers through approved Saudi banks. You need to include mandatory social insurance coverage under the Social Insurance Law, covering workplace injuries, unemployment, and pension contributions. For companies with specific Nitaqat classifications, the contract must demonstrate compliance with Saudi national hiring quotas. The agreement should also address workplace safety requirements as outlined in Ministerial Resolution No. 70273/1440, ensuring employee working conditions meet Saudi standards.