The Ministry of Human Resources and Social Development in Saudi Arabia has released updated rules on how overtime is calculated for private sector workers. These regulations ensure proper compensation for employees working beyond standard hours, especially during holidays and emergencies.

Overtime Calculation in Saudi Arabia

According to Saudi labor law, companies in the private sector must follow a standard 48-hour work week, which averages to 8 hours per day. Any work performed beyond these hours qualifies as overtime and must be compensated accordingly.

Standard Overtime Rate

Employees are entitled to a 50% increase over their base hourly wage for each hour worked overtime. For example, if a worker earns 20 SAR per hour, the overtime rate would be 30 SAR per extra hour (20 base + 10 extra).

Holiday and Special Occasion Overtime

For work done on holidays and special events, overtime is paid at 150% of the normal wage. Thus, a worker earning 20 SAR per hour would be paid 50 SAR for each holiday overtime hour.

Penalties for Non-Payment of Overtime

The Ministry has mandated that overtime must not exceed 720 hours annually. Employees must give written consent to work beyond this limit. Failure to adhere to these regulations can lead to strict penalties:

• Employers who delay or fail to pay due wages will be fined.

• If the violation is repeated, the establishment's services will be suspended until all pending payments are cleared.

• Firms may be barred from hiring new staff temporarily as a disciplinary measure.

• Companies must maintain proper records of all overtime hours worked.

• Advance notice of overtime is required, except in emergencies.

• Employees must consent to any hours beyond the legal overtime limit.

Working Hours in the Private Sector

Every organization must comply with the 8-hour daily work limit. Any increase in working hours requires the employee’s documented approval. This provision ensures transparency and protects worker rights in accordance with Saudi labor law.

How Are Overtime Hours Calculated?

The Ministry simplified the overtime formula for private companies. If an employee’s hourly wage is 20 SAR, then the overtime compensation for regular extra hours is 30 SAR per hour, and 50 SAR per hour during holidays.