Employment Contracts in Saudi Arabia
Employment contracts form the legal foundation of every working relationship in Saudi Arabia. Saudi Labour Law strictly regulates how contracts are created, registered, renewed, and terminated to protect both employees and employers — especially expatriate workers.
- Types of employment contracts
- Probation period rules
- Contract registration requirements
- Renewal and extension rules
- Employer obligations
- Employee obligations
- Legal protections
- Termination impact
- Dispute resolution
- Expat-specific contract rules
1. What is an Employment Contract?
An employment contract is a legally binding agreement between an employer and an employee that defines rights, duties, wages, working conditions, and obligations.
Under Saudi Labour Law, employment contracts are mandatory and legally enforceable documents. No employment relationship is legally valid without a proper contract.
2. Types of Employment Contracts
- Fixed-term contract: Contract with a defined start and end date
- Unlimited contract: Open-ended contract without expiry date
- Seasonal contract: For specific seasonal work
- Project-based contract: Linked to project completion
- Part-time contract: Limited working hours
For expatriates, contracts are usually fixed-term and linked to residency (Iqama).
3. Probation Period Rules
- Maximum probation: 90 days
- May be extended to 180 days with written agreement
- Either party may terminate during probation
- No EOSB during probation
- No notice period required unless stated in contract
4. Contract Registration
Employment contracts must be officially registered in Saudi systems such as:
- Qiwa platform
- GOSI (Social Insurance)
- HRSD systems
Unregistered contracts weaken employee legal protection.
5. Contract Renewal Rules
- Fixed contracts can be renewed by mutual agreement
- Repeated renewals may convert to unlimited contract
- Automatic renewal clauses are legally valid
- Non-renewal must follow notice rules
6. Employer Obligations
- Pay salary on time
- Provide safe work environment
- Register employee legally
- Respect working hour limits
- Provide leave entitlements
- Pay EOSB
7. Employee Obligations
- Perform assigned duties
- Follow company policies
- Respect workplace rules
- Maintain confidentiality
- Comply with Saudi laws
8. Contract Termination Impact
Contract type affects termination rights:
- Fixed-term → Compensation may apply if terminated early
- Unlimited → Notice period applies
- Probation → Easy termination
9. Contract Disputes
Disputes may arise from:
- Unpaid salary
- Illegal termination
- Contract violations
- EOSB denial
- Working condition disputes
Disputes can be filed through HRSD, labour courts, and Najiz platform.
10. Expat-Specific Contract Rules
- Contracts linked to Iqama
- Transfer rules apply
- Sponsorship system impacts contracts
- Exit/re-entry linked to contract validity
- Employer controls contract documentation