Overtime Calculation in Saudi Arabia: Labor Law Rules and Example

You work as a sales supervisor with a salary of SAR 9,600, of which SAR 7,200 is basic. Since the start of the season, your manager has asked you to stay two hours after work on most days. At the end of the month, the payslip shows nothing for these hours, or an amount calculated on the basic salary alone. How much are you really owed?

The direct answer: every hour you work above eight hours a day or 48 hours a week (six hours or 36 hours for Muslims in Ramadan) is an overtime hour. Its pay is your normal hourly wage plus 50% of your basic wage (Article 107 as amended). You may be compensated with paid leave instead of money, but only with your consent.

When does an hour count as overtime in Saudi Arabia?

Article 98 of the Labor Law does not allow a worker to actually work more than eight hours a day if the employer uses the daily standard, or more than forty-eight hours a week if it uses the weekly standard. In Ramadan, actual working hours for Muslims are reduced to six hours a day or thirty-six hours a week.

Every hour above the standard used in your workplace is overtime. All working hours on official holidays and Eid days are overtime.

There are special rules. Article 99 allows hours to be raised to nine a day for some categories and types of work. Article 100 allows shift work in businesses whose nature requires it, with the Ministry's approval, provided the average over three weeks or less does not exceed eight hours a day or 48 a week. Article 106 allows the employer not to follow the hour limits in specific cases:

• Annual stocktaking, preparing the budget, liquidation and closing accounts, and preparing for sales seasons.
• Preventing a serious accident or repairing what resulted from it.
• Dealing with an unusual workload.
• Holidays, seasons, occasions and seasonal work set by a decision of the Minister.

These cases allow the limit to be exceeded, but they do not cancel overtime pay. The extra hour remains overtime and the worker is entitled to its pay. Even in these cases, actual working hours may not exceed ten hours a day or sixty hours a week. The Implementing Regulations set an annual cap of 720 overtime hours, which may be exceeded only with the worker's consent (Article 22 of the regulations).

Article 108 excludes certain categories from the hour limits, including people in senior management positions, preparatory and complementary work before and after the main work, work that is intermittent by nature, and guards and cleaners, except civil security guards. The job title alone is not enough. The article requires a position whose holder has the employer's authority over workers, so the word "manager" in your contract does not automatically put you in this category.

Do breaks count as working hours?

No. Article 101 does not allow a worker to work more than five consecutive hours without a break for rest, prayer and meals of at least half an hour, or to stay at the workplace more than twelve hours a day. Article 102 excludes rest, prayer and meal breaks from actual working hours.

So if you stay in the office ten hours, including a real one-hour break, your actual work is nine hours. If you are asked to work during the break, record the instruction and the time, because Article 102 says that during the break the worker is not under the employer's authority and is not required to stay at the workplace.

Friday is the weekly rest day as a rule. After informing the labour office, the employer may replace it with another day, and the rest day is paid.

What is the overtime calculation formula in Saudi Arabia?

Article 107, as amended, requires the employer to pay for each overtime hour a wage equal to the hourly wage plus 50% of the basic wage. So the fifty percent is calculated on the basic salary, while allowances are included in the hourly wage itself. That is why multiplying the full hourly wage by 1.5 may not be accurate.

Total salary SAR 9,600: SAR 7,200 basic and SAR 2,400 allowances.

If we assume, for illustration, a month of 240 working hours (30 days × 8 hours), the full hourly wage is SAR 40, and the basic part of the hour is SAR 30.

Overtime hourly pay = 40 + (50% × 30) = SAR 55.

Ten overtime hours in a month = SAR 550.

The method for working out the hourly wage itself may differ depending on the contract, the type of wage and fixed or variable allowances. So start with your contract and your payslip to know your basic salary exactly.

Can the employer give leave instead of overtime pay?

Yes, but only with your consent. The amendment added a new option: the employer may, with the worker's consent, give paid compensatory leave days instead of overtime pay. Article 22 bis of the Implementing Regulations sets the rules:

• A written agreement stating the overtime period and the amount of leave, which may not be less than one and a half hours of leave for each overtime hour.
• The employer may set the leave date within 60 days of the overtime, unless agreed otherwise.
• Compensatory leave may not exceed 30 days a year.
• If the worker leaves the job before using it, he is entitled to its pay in the final settlement.
• Compensatory leave is separate from your annual leave balance and is not deducted from it.

Do not claim both the pay and the leave for the same hour after you have actually used the alternative. If you object to how the leave was calculated, explain why and what you received.

How do you prepare an overtime claim?

• A monthly table: for each day, start and finish times, breaks and extra hours.
• Written instructions: an email or message from the manager asking you to stay late or work on your rest day.
• Attendance and fingerprint records, although fingerprints alone do not prove you were working the whole time.
• Payslips, to show what was paid and what was not.
• The employment contract, to show the basic wage and the standard used.

The process starts with a labour complaint through the electronic services of the Ministry of Human Resources and Social Development for a friendly settlement. If it does not end in settlement, the case is referred to the Labour Court.

A labour claim is not accepted after twelve months from the end of the employment relationship, except with an excuse the court accepts or an admission by the employer (Article 234). But do not wait until the job ends: every month that passes weakens witnesses' memory and loses messages.

What are the common mistakes in overtime claims?

• Calculating the 50% on the total salary instead of the basic wage, so the claim is larger than the right and your position becomes weaker.
• Relying on fingerprint records alone without instructions or messages proving you were working.
• Including rest, prayer and meal breaks in working hours.
• Signing a final clearance (mukhalasa) that does not mention overtime or keep your right to it.
• Delaying the claim for years until evidence is lost or the twelve months after leaving are almost over.

This is general information based on the official Arabic texts of Saudi laws, which prevail over any translation. It is not legal advice for your specific case.

Practical solutions for the worker and the employer

If you are the worker:

• Record your hours daily from now on, and keep every written instruction.
• Ask HR for a statement of approved overtime hours and what was paid for them.
• If you are offered compensatory leave, agree only in writing and after knowing its amount and date.
• If your request is refused, file a labour complaint with your table and payslips attached.
• If you leave the job, make sure the final clearance mentions overtime or keeps your right to it.

If you are the employer:

• Make every overtime assignment a written or electronic instruction stating the number of hours and days, as the work regulations require.
• Pay overtime as a separate item in the payroll, calculated on the basic wage as the law requires.
• If you choose compensatory leave, document the worker's consent, the number of hours and the matching leave.
• Review the jobs you treat as excluded, and make sure they meet the conditions of Article 108.
• In a dispute, prepare a joint statement of attendance, instructions and payments before the dispute reaches court.

The calculation changes with the basic wage, the allowances and how the work was assigned. Send us your contract, payslip and table of hours on WhatsApp, and we will explain what you are owed and what you need to prove.