Saudi employment is governed by the Labour Law (Royal Decree No. M/51 of 2005, as amended), enforced by the Ministry of Human Resources and Social Development (MHRSD). Key compliance areas include the Nitaqat Saudization quota system, End of Service Award (gratuity), GOSI social insurance contributions, and Wage Protection System (WPS) reporting through Musaned and Muqeem platforms.
Employees who complete at least 2 years are entitled to an End of Service Award: one-half month's wage per year for the first 5 years, and one month's wage per year thereafter. An employee who resigns after 2–10 years receives one-third (2–5 yrs) or two-thirds (5–10 yrs) of the full entitlement. Dismissal for cause may forfeit the award.
How ClockIt Helps
ClockIt calculates real-time gratuity accruals for every employee, factoring in the tiered formula and resignation/termination reason, so finance teams always have an accurate liability figure.
Normal working hours are 8 hours per day and 48 hours per week (reduced to 6 hours/day and 36 hours/week during Ramadan for Muslim employees). Overtime work must not exceed 3 hours per day. Overtime compensation is 150% of the basic hourly rate. Total hours including overtime must not exceed 11 hours per day.
How ClockIt Helps
ClockIt supports Ramadan scheduling modes that automatically reduce shift lengths and flag any scheduled duration exceeding the 6-hour Ramadan limit or the 11-hour total daily cap.
All private-sector companies must meet Saudization (Saudi national hiring) quotas under the Nitaqat system. Quotas vary by industry and company size (Platinum, Green, Yellow, Red tiers). Non-compliant companies (Yellow/Red) face restrictions on renewing or obtaining new work visas and can be fined.
How ClockIt Helps
ClockIt's workforce analytics display live Nitaqat ratios by department and company-wide, projecting which tier the company falls in and alerting HR before the status degrades.
The General Organization for Social Insurance (GOSI) covers occupational hazards and annuity programmes. For Saudi nationals, the combined contribution rate is 21.5% of wages (employer: 11.75% annuity + 2% hazard; employee: 9.75% annuity). For non-Saudis, only the occupational hazard contribution (2%) is required from the employer.
How ClockIt Helps
ClockIt separates Saudi and non-Saudi employees in payroll calculations, applies the correct GOSI rates for each category, and generates the monthly GOSI submission file.
Employees with less than 5 years of service are entitled to 21 days of paid annual leave per year. After 5 years, this increases to 30 calendar days per year. Employees working in hazardous or unhealthy environments may be entitled to additional leave as stipulated by ministerial decree.
How ClockIt Helps
ClockIt automatically upgrades annual leave accrual from 21 to 30 days when an employee crosses the 5-year service threshold, triggering payroll and HR notifications.
All private-sector companies must register on the WPS and pay salaries within 7 days of the agreed pay date. Non-compliant companies are automatically escalated through warning, suspension of new work permit services, and ultimately referral to the Labour Court. The WPS is linked to the Mudad platform.
How ClockIt Helps
ClockIt generates the WPS-compatible payroll files required for Mudad submission, tracking payment confirmation status per employee and alerting payroll teams before the 7-day deadline.
Start your free trial and automate your labour law compliance — from overtime to payslips.
Start Free Trial