Saudi Arabia’s Labour Law sets a generous annual leave floor by Gulf standards: 21 calendar days of paid leave once an employee has completed a year of service, rising to 30 calendar days once they pass five years. Unlike many jurisdictions where leave pay catches up at the next payslip, the Saudi rule is unusually strict — leave must be paid in full, in advance of the holiday.

This guide walks through the rules in Articles 109 to 115 of Royal Decree No. M/51, who is covered, how the entitlement scales with service, the obligation to pay before leave begins, and the pitfalls international employers most often hit when they translate the law into a payroll system designed around the Gregorian calendar.

Key takeaways

The Saudi Labour Law mandates 21 calendar days of paid annual leave for the first five years of continuous service, increasing to 30 calendar days from the start of the sixth year onward.
Annual leave must be paid at the full wage, including all fixed allowances and supplements.
The wage for the leave period must be paid in advance, before the employee starts the holiday — not at the next monthly payroll cycle.
Annual leave is pro-rated for employees with less than one year of service, and any unused balance must be paid out on termination.
Many Saudi employers operate on the Hijri calendar, while their HR systems run on the Gregorian one. Mixing the two without a conversion rule is a common source of underpayments.

The statutory minimum: 21 days, then 30

The annual leave entitlement sits in Articles 109 to 113 of the Saudi Labour Law (Royal Decree No. M/51). Once an employee completes a year of continuous service, they are entitled to 21 calendar days of paid annual leave. From the start of their sixth year of service onward, that figure jumps to 30 calendar days.

Years of continuous service completed	Statutory annual leave
1 to 5	21 calendar days
5 and above	30 calendar days

The entitlement is expressed in calendar days, which means weekends and public holidays falling within a leave period are counted toward the entitlement unless the contract or company policy says otherwise. Many employers improve on this by carving out Fridays and public holidays, but the statutory minimum uses calendar days.

For a market comparison across the region, see how Singapore’s seven-to-fourteen-day scale and the Philippines’ five-day service incentive leave stack up against the Saudi figure. By Asia-Pacific standards, the Saudi minimum is on the higher end, particularly once the five-year increase kicks in.

Eligibility and pro-rated leave

Two questions decide what an employee is owed: are they covered by the Labour Law, and have they completed enough service to take or be paid for leave?

Coverage under the Labour Law

The Labour Law covers all private-sector employees in Saudi Arabia, regardless of nationality, salary, or job category. There are limited carve-outs in the Act itself for categories such as domestic workers, who are governed by separate regulations. For the typical office, retail, hospitality, construction, or industrial workforce, the section on annual leave applies in full.

Pro-rated leave for under one year

An employee who has not yet completed twelve months of continuous service is entitled to a pro-rated portion of the annual leave figure based on the period actually worked. In practice, this matters most at termination: if a worker resigns or is dismissed after seven months, the employer must pay out seven-twelfths of the 21-day entitlement, not zero.

The standard formula used by Saudi payroll teams is: (days of service ÷ 365) × annual entitlement, rounded according to company policy. For complex cases — for example, an employee who started part-way through a Hijri year and left part-way through a Gregorian one — agree the rounding rule in writing before the calculation.

Pay during annual leave

Annual leave is paid at the employee’s full wage. The Saudi Labour Law defines the full wage as the basic salary plus all allowances and supplements that form part of the contractual package — for example, housing, transport, and any fixed cost-of-living or position allowances. Variable elements such as discretionary bonuses or commissions are generally excluded unless the contract treats them as a fixed monthly entitlement.

The crucial part of the rule sits in Article 109: the wage for the annual leave period must be paid to the employee before the leave begins. Most monthly payrolls process leave like any other paid month, with the employee receiving the same payslip on the usual date. Under the Saudi rule, that is not enough — if an employee starts a 21-day holiday on the 5th of the month, the full leave wage must be in their hands before they leave, even if it sits outside the regular payroll cycle.

This is one of the cleanest examples of where a global HR system, configured for end-of-month payroll, will fail Saudi compliance unless the leave-pay-in-advance rule is implemented as a separate step.

Employer obligations under the Labour Law

Saudi employers covered by the Labour Law have five core obligations on annual leave:

Grant the statutory minimum — 21 days for the first five years of service, 30 days thereafter — once the employee qualifies.
Pay leave at the full wage, including all fixed allowances and supplements.
Pay the leave wage in advance, before the holiday begins.
Pro-rate annual leave for employees with less than one year of service, including on termination.
Maintain leave records for each employee, accurate enough to support a Ministry inspection or a dispute.

A sixth obligation, often overlooked, is to pay out unused annual leave on termination. This applies whether the employee resigns, is dismissed, or reaches the end of a fixed-term contract. Employers cannot lawfully extinguish accrued statutory leave without payment.

What employees are entitled to

The corresponding rights for employees are straightforward:

Right to 21 to 30 days of paid leave based on completed years of service.
Right to be paid the full wage during annual leave, including fixed allowances.
Right to receive leave wages in advance of the holiday period.
Right to a pro-rated payout on termination for unused accrued leave.

Carry-over and timing of leave are typically handled by mutual agreement between employer and employee, subject to operational scheduling. Employers can require leave to be taken within a defined window, but they cannot use scheduling rules to extinguish accrued leave entirely.

Hajj and Umrah leave: a separate entitlement

A frequent source of confusion is whether religious pilgrimage leave eats into the annual leave bucket. It does not. Hajj leave of 10 to 15 days is a separate statutory entitlement available to Muslim employees who have not previously performed Hajj, granted once during the period of employment. Annual leave taken in the same year is unaffected.

If you operate a leave policy that lumps “religious leave” and “annual leave” into a single allowance, you are out of step with the Labour Law. Track the two separately so that an employee taking Hajj does not lose their statutory annual leave for the year.

Common pitfalls

Saudi-based and multinational employers tend to fall into the same four traps when administering annual leave.

1. Missing the five-year increase

The jump from 21 to 30 days happens at the start of the sixth year of continuous service. Payroll systems that lock the entitlement at the first-year figure and never escalate are a leading cause of underpayments discovered at termination. Audit your leave configuration against tenure at least once a year.

2. Paying leave on the regular payroll cycle

Article 109 requires leave wages to be paid in advance of the leave period. A global HR system that pushes leave pay through the usual end-of-month run will technically breach the law for any leave that starts before payday. Build a separate “advance leave wage” step into the leave approval workflow.

3. Forgetting unused leave on termination

The pro-rated payout rule applies to every termination, voluntary or involuntary, whether the employee has been with you for fourteen months or fourteen years. A clean off-boarding checklist that calculates the leave balance before the final settlement avoids labour disputes that often end in front of the Saudi labour courts.

4. Mixing Hijri and Gregorian calendars

This is the pitfall unique to Saudi Arabia. The Labour Law refers to years of service without specifying the calendar, and many Saudi employers track employment milestones — start dates, anniversaries, leave anniversaries — on the Hijri (Islamic lunar) calendar, while the rest of their HR stack runs on the Gregorian calendar. The Hijri year is roughly 11 days shorter, so an “annual” entitlement renewed on the Hijri date arrives slightly sooner each Gregorian year.

Pick one calendar, document the choice in the contract or employee handbook, and apply it consistently to leave accrual, anniversaries, and the five-year service threshold. Switching calendars mid-employment is the fastest way to create a payroll dispute.

For broader context on how annual leave fits alongside sick leave, parental leave, and statutory holidays, see our overview of the main types of leave employers manage.

Frequently asked questions

How many days of annual leave do Saudi employees get?

Employees with one to five years of completed continuous service are entitled to 21 calendar days of paid annual leave. From the start of the sixth year onward, the entitlement increases to 30 calendar days. The figures sit in Articles 109 to 113 of the Saudi Labour Law (Royal Decree No. M/51).

Is annual leave paid in advance in Saudi Arabia?

Yes. The Labour Law requires the wage for the annual leave period to be paid before the leave begins, not at the next regular payroll cycle. This applies to the basic salary plus all fixed allowances and supplements that form part of the contractual wage.

Are weekends and public holidays counted in annual leave?

The statutory entitlement is expressed in calendar days, so weekends and public holidays that fall within the leave period are counted toward it unless the contract or company policy says otherwise. Many Saudi employers improve on the floor by excluding Fridays and public holidays from the leave count, but they are not required to.

Can unused annual leave be carried forward in Saudi Arabia?

Yes, by mutual agreement between the employer and the employee. The Labour Law does not impose a fixed carry-over cap, leaving the detail to the contract or company policy. On termination of employment, however, any accrued and unused annual leave must be paid out in full.

Are Hajj and Umrah leave part of annual leave?

No. Hajj leave of 10 to 15 days is a separate statutory entitlement available once during employment to Muslim employees who have not previously performed the pilgrimage. It does not reduce the annual leave balance for the year in which it is taken.

Does annual leave apply to employees with less than one year of service?

Annual leave is pro-rated for employees who have not yet completed twelve months of continuous service. The pro-rated balance is most relevant at termination, where the employer must pay out the unused portion at the full wage.

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Putting it into practice

If you employ staff in Saudi Arabia, the practical to-do list is short:

Confirm employment contracts state the 21-to-30-day annual leave entitlement clearly, with the five-year escalation.
Configure your HR or payroll system to auto-increment leave at the five-year mark of continuous service.
Build an “advance leave wage” step into your leave approval process so the wage is paid before the holiday begins.
Decide whether you operate on a Hijri or Gregorian leave year and document the choice in the contract.
Keep accurate leave records that survive a Ministry of Human Resources audit, and pay out unused leave automatically on termination.

A modern leave management system handles the 21-to-30-day step-up, the pro-rata calculation for first-year leavers, and the full-wage payout on termination automatically — so the next time someone resigns at year four with eleven days banked, the final settlement is correct without anyone having to dig through Royal Decree M/51.