What Saudi Labor Law Says
Saudi Labor Law (Article 109) clearly defines annual leave entitlements:
- Less than 5 years of service: 21 working days per year
- 5 years or more: 30 working days per year
Important: The law says working days, not calendar days — and the difference matters significantly in calculations.
Who is entitled to leave?
Any employee who has completed 90 days of service is entitled to full annual leave. Before that: no legal entitlement exists.
How to calculate leave correctly?
Practical example
An employee with a basic salary of SAR 5,000 + housing allowance of SAR 1,500:
Daily leave pay = (Basic salary + Housing allowance) ÷ 30 = (5,000 + 1,500) ÷ 30 = SAR 216.67 per day
Annual leave pay (21 days) = 216.67 × 21 = SAR 4,550
Leave carry-over rights
An employee may defer their leave by agreement with the employer, but it is not permissible to:
- Deny them leave for more than two consecutive years
- Force them to work without compensation during their leave period
Cash compensation upon termination
Upon contract termination, the employee is entitled to cash compensation for unused leave balance — even if the contract ended by resignation.
Calculation: Remaining days × daily pay rate
Common mistakes that cost employers
| Mistake | Potential Consequence |
|---|---|
| Deducting public holidays from leave days | Ordered to compensate |
| Calculating 21-day leave after 5 years | Difference owed + fine |
| Not paying leave compensation upon dismissal | Legal claim |
| Forcing work during leave | Double compensation |
Advice for employees
Always keep a written record of your leave balances. The law protects you — but documentation is essential in any dispute.
Have a question about your annual leave? Message me on LinkedIn.