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Saudi Arabia Standard Time Zone (UTC+03:00) 

Undoubtedly, payroll is a critical process for any organization. The pay cycle in Saudi Arabia refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

In Saudi Arabia, the payroll frequency is weekly or monthly. The employer must make the payment for weekly employees once a week and make payments for monthly paid employees at least once a month. 

13th-month payments are not mandatory. However, employers can pay performance-based bonuses at their discretion. 

The national minimum wage in Saudi Arabia is 4,000 SAR per month. 

The Saudi labor law provides for a maximum ordinary working hours of 48 hours per week or eight hours per day. The working hours and rest periods should be scheduled in a way that no worker is present at the workplace for more than 11 hours a day. 

Social insurance documents should be kept for five years. Employers must retain employment records for at least six years. 

Employers must retain records of compensation and benefits information in Arabic unless they acquire permission from Saudi Arabia's Ministry of Labor to retain records in another language. 

For onboarding in Saudi Arabia, the following documents are required:

• Name 
• Personal identification number 
• Addresses 
• Bank account details 
• Driving license number 
• Phone number 
• Email address 
• Social security number 
• Work permit (for ex-pats) 
• Copy of Passport 

Saudi labor law allows employers to apply for a probation period; this is expressly stated in the employment contract. Probation can be for an initial period of 90 days and can be extended for a further 90 days with the agreement of the employee. 

Employees are entitled to 9 paid holidays annually, the dates of some of which vary year to year:

• February 22: Founding Day
• April 20-24: eid Al-Fitr
• June 28: Arafat Day
• June 27-30: Eid Al Adha
• September 24: Saudi National Day

If National Day falls on a weekend, a day in lieu is granted either on the day preceding or following the weekend. 

Employers must provide a total of 90 days of paid sick leave to all employees. The sick leave is paid at full wages for the first 30 days and at three-quarters of normal wages for the remaining 60 days. Employees who have used all of their paid sick leave are entitled to an additional 30 days of unpaid sick leave. 

Employers must provide female employees with ten weeks of paid maternity leave—four weeks prior to the baby's due date and six weeks after the birth of the baby. Maternity leave is unpaid for employees who have worked less than a year, at 50% of normal wages for employees who have worked between one and three years, and at full wages for employees who have worked more than three years. Employees who take maternity leave at full wages will be able to take their paid annual leave, but unpaid. Employees who take maternity leave at half wages will be able to take their paid annual leave but paid at half their normal wages. Employers must provide employees on maternity leave with medical care during pregnancy and delivery. 

Employers must provide new parents with one day of paid leave. 

Where the employee is on an indefinite-term contract, the minimum notice period for termination is 60 days. If the employee is not being paid on a monthly basis, the minimum notice period is 30 days. If the employee is on a fixed-term contract, the minimum notice of non-renewal is 30 days.

In all cases if the employment contract provides for a longer notice period, that longer period will apply. 

The amount of severance pay is defined in Article 84 of the Labour Law. This states that the employee is entitled to an end-of-service wage of a half-month wage for each of the first five years, and a one-month wage for each of the following years of employment. The end-of-service payment is calculated based on the last paid salary amount.  

Article 85 also stipulates that the employee is entitled to: 

• One-third of the payment after service of not less than two consecutive years and not more than five years  

• Two-thirds of the service is more than five successive years but less than ten years and to the 

• Full payment if his service amounts for ten or more years when the work relation ends due to the employee’s resignation.  

However, there are exceptions when severance is not mandatory:  

• When the employer assaults their employer or supervisor  

• When the obligations outlined in the employment contract are not fulfilled by the employee and has been warned in writing  

• Negligence or intent to cause harm to the employer  

• Dishonesty or forgery  

• When the employee is on probation  
• When the employee is absent from work for more than 20 days in a year or 10 consecutive days  

• Divulging in trade secrets 

In order to work legally in Saudi Arabia, foreign workers must obtain the proper permit or visa. 

Residency Visa: Residency visas allow foreign workers to work for a given worker for a period of up to one year and are renewable. In order to obtain a residency visa, employers must obtain approval from the Saudi Ministry of Foreign Affairs and provide employees with a letter of sponsorship before employees can apply at the Ministry of Foreign Affairs. Applications can also be sent online through the Ministry of Finance website. 

Work Permit: All employers must obtain a work permit from the Ministry of Labor for all foreign workers they hire after employees have obtained a residency visa. To apply for a work permit, employers must submit an application and a copy of the employment contract to the Ministry of Labor office or the Ministry of Labor website. 

Foreign workers in Saudi Arabia on a permanent basis must obtain exit visas in order to exit Saudi Arabia. 

Foreign workers who overstay their visa are subject to a fine of 10,000 and incarceration pending deportation proceedings. 

Female foreign workers generally must obtain additional permission from the Ministry of Foreign Affairs to obtain work permits and visas. 

Private employers are required to provide health insurance to foreign workers and their dependents. Visas and resident permits will not be issued or renewed for foreign workers without health insurance. 

Employers are not prohibited from carrying out background checks and these can be done at any stage in the hiring process. Nevertheless, it is recommended that checks should only be carried out where they are proportionate and necessary, and following an offer of employment. Where possible, applicants should be notified beforehand that their application will be conditional on background checks being carried out.  

Expatriate job applicants must also complete a satisfactory medical check and a police clearance check.