Overtime creates confusion in Saudi workplaces. It happens due to stricter labor enforcement heading into 2026. Every worker wants to know if they’re getting paid fairly. Similarly, employers want to stay compliant and avoid penalties. The (MHRSD) Ministry of Human Resources and Social Development regulates the Saudi Labor Law. The overtime must follow clear legal rules set by the law. Possible only if you understand them properly.
Overtime refers to working beyond the legally permitted hours. If any worker works more than the regular hours, it is said to be overtime in Saudi Arabia. Gain detailed insights about how overtime is calculated in the Kingdom. The guide is written to talk about overtime calculation by using formulas, legal references, and real-world examples. Manage payroll or track your own work hours by understanding overtime today. The knowledge protects your reputation in an environment where audits and labor complaints are rising.
What Is Considered Overtime Under Saudi Labor Law
Overtime is any work performed beyond 8 hours per day or 48 hours per week as per the Saudi law. The overtime is calculated differently in Ramadan. Overtime applies to work exceeding 6 hours per day for Muslim employees during the Holy month. Overtime must be paid at 150 percent of the worker’s basic hourly wage. Employers can’t require overtime without the worker’s consent. The exception is in limited cases.
Definition of overtime in KSA:
Saudi Labor Law defines:
Overtime as any work performed beyond the maximum daily or weekly working hours. Overtime pay becomes a legal obligation when an employee crosses these limits. It does not serve as a benefit.
Daily vs weekly overtime thresholds:
An employee is eligible for overtime pay when they work more than 8 hours in a day or 48 hours in a week. Crossing the weekly limit still triggers overtime, even if daily hours seem normal.
Difference between regular hours & overtime hours:
In Saudi Arabia, the regular hours fall within legal limits. Overtime hours start immediately after those limits end. It may also require higher compensation.
Role of employment contracts in overtime eligibility:
Employment contracts may define schedules. However, they cannot override the Saudi Labor Law. Overtime applies regardless of contract wording if actual work exceeds legal limits.
Guideline for Saudi Arabia’s Labor Laws
Understanding the overtime calculation in KSA necessitates a solid grasp of Saudi Arabia’s labor laws. These laws shape the framework for employers and employees to operate. They directly impact overtime calculation KSA.
The Labor Law in Saudi Arabia is the basis of employment regulations. It defines maximum working hours, rest days, and overtime rules. These help in calculating the overtime in KSA. Employers comply to these regulations of countrys. They have to ensure they are using a valid KSA overtime calculator.
One of the core principles of these laws is the definition of regular working hours. It excludes break times. Knowing this is important for correct overtime calculation in KSA. The regular workweek comprises of forty eight hours. These are divided into eight hours per day. Remembering this is highly important for accurate overtime calculation KSA.
Employers in Saudi Arabia should be aware of the importance of designating rest days for their employees. If an employee works on their assigned rest day, utilize the correct Saudi overtime calculator to calculate their overtime pay. This is where the overtime calculator in KSA comes into play. It helps employers ensure accurate compensation.
The Saudi overtime calculator can simplify this process. It allows employers to effortlessly compute overtime calculation KSA. This generates precise calculations.
Standard Working Hours Regulations in Saudi Arabia:
Standard working hours in KSA are limited to eight hours per day or forty-eight hours per week. The Holy month of Ramadan follows different schedules. The working hours for Muslim employees are reduced to six hours per day or thirty-six hours per week in the sacred month. However, employers must provide rest breaks. They are obligated to give at least one full weekly day off. Any work beyond these limits is considered overtime.
Normal working hours:
Saudi law sets working hours at 8 hours per day or 48 hours per week. Employers must structure schedules within these limits.
Weekly rest day rules:
Every employee must receive at least one paid rest day per week. It is usually Friday when Saudi Arabia follows a day off, unless the job requires otherwise.
Breaks, prayer times, and exclusions:
Meal breaks and prayer times do not count as working hours if employees are free from work duties.
Maximum daily working hours:
Labor law restricts excessive daily hours, even with overtime. Continuous overwork can trigger violations during inspections.
Important note:
Enforcement and payroll audits are becoming more frequent in 2026. This makes accurate tracking essential.
Working Hours During Ramadan:
The working hours in Ramadan are changed that that of regular days and months. The Saudi labor law offer muslim employees to work less than they usually do on regular days.
Reduced working hours for Muslim employees:
During Ramadan, Muslim employees work a maximum of six hours per day or thirty-six hours per week. The leverage is often provided to muslim employees so that they can pray and make the best during their fast.
Ramadan schedule for non-Muslim employees:
The timings remain 8 hours per day for non-Muslim workers during Ramadan. Non-Muslim employees usually follow regular schedules unless the employer applies a unified Ramadan policy.
When overtime applies during Ramadan:
Any hour worked beyond the reduced Ramadan limits by employees counts as overtime. If this happens, it must be paid at overtime rates.
Common employer mistakes during Ramadan payroll:
Employers often make a common mistake during Ramadan. They forget to adjust overtime thresholds during Ramadan. This may lead to underpayment and disputes.
Overtime Calculation Formula in Saudi Arabia: Steps Involved
Saudi law applies a 150 percent overtime rate. Let’s understand how it works.
How to Calculate the Hourly Wage
Monthly Salary ÷ 30 ÷ 8 = Hourly Wage
This formula standardizes wages across payroll systems.
How to Calculate the Overtime Rate
Hourly Wage × 1.5 = Overtime Rate
This reflects the legally required overtime premium.
Final Overtime Pay Formula
Overtime Rate × Overtime Hours = Total Overtime Pay
This method aligns directly with Saudi Labor Law requirements.
Practical Overtime Calculation Examples
Example: Weekday overtime calculation
Monthly salary: Riyal 6,000
Hourly wage: 6,000 ÷ 30 ÷ 8 = Riyal 25
Overtime rate: 25 × 1.5 = Riyal 37.5
Overtime hours: 8
Overtime pay: 8 × 37.5 = Riyal 300
Example: Weekend overtime calculation
Employee works 6 hours on a rest day
Hourly wage: Riyal 25
Overtime rate: Riyal 37.5
Overtime pay: 6 × 37.5 = Riyal 225 + daily wage
Example: Public holiday overtime calculation
Employee works 8 hours on a public holiday
Receives full daily wage + 8 hours at 150 percent
Total compensation equals nearly double pay
Example: Over time, during Ramadan
Ramadan daily limit: 6 hours
Employee works 8 hours
Extra hours: 2
Overtime rate applies to both hours
Overtime pay: 2 × hourly wage × 1.5
When Is Overtime Pay Mandatory?
Overtime has become mandatory to pay when your workers work more than the regular daily and weekly working hours. They are also eligible to ask for overtime when they work on weekends, on holidays, and on night shifts. As an employer, it’s your responsibility to make payments on time so that you can avoid any future disputes.
Exceeding daily working hours:
Any work beyond 8 hours requires overtime pay.
Exceeding weekly working hours:
Crossing 48 hours per week triggers overtime even if daily limits appear normal.
Working on weekends:
Work on rest days must include overtime compensation.
Working on official public holidays:
Holiday work always qualifies for additional pay.
Night work (10 PM – 6 AM):
Night work often involves overtime unless part of an approved shift system.
Article 107 clearly states that employers must pay overtime in these cases.
Overtime Pay for Weekends & Public Holidays:
Overtime pay calculation is different when your workers work on their weekends and public holidays. Similarly, the Saudi labour law mentions clearly the difference between the rest day pay and overtime pay. For instance, if a worker is supposed to do work on a holiday, they’ll get a chance to earn double compensation.
How weekend overtime is calculated:
Employees receive their normal daily wage plus overtime for each hour worked.
How public holiday overtime is calculated:
Holiday work includes regular pay plus 150 percent overtime for hours worked.
Difference between rest day pay and overtime pay:
Rest day pay covers the day. Overtime pay covers the hours.
Why holiday work often equals double compensation:
Combining daily wage and overtime rate results in nearly double earnings.
Who Is Exempt from Overtime Pay in Saudi Arabia:
In Saudi Arabia, many high-level executives are exempted from the list. Managers and supervisors do not fall in the category of overtime pay. Sales and field workers also do not qualify for overtime. Employers are not required to provide overtime pay to flexible and special contract employees. This category is also exempt from the list.
Managers and supervisors:
Employees with real authority over hiring and discipline may be exempt.
Sales and field employees:
Roles performed outside offices often follow special rules.
Flexible or special contract employees:
Eligibility depends on contract structure and actual job duties.
Importance of role definition:
Poorly defined roles increase legal risk and misclassification penalties.
Overtime Rules for Part-Time & Flexible Workers:
Both part-time and flexible workers can claim their overtime pay when they work more hours than those defined in their employment contracts.
When part-time overtime applies:
Part-time employees qualify for overtime when they exceed contracted hours.
Contractual working hour limits:
Contracts define normal hours. However, the law governs overtime entitlement.
Example calculation:
Contract: 4 hours/day
Worked: 6 hours
Extra 2 hours count as overtime and pay at 150 percent.
Penalties for Non-Compliance with Overtime Laws:
Employers in Saudi Arabia can face many legal issues if they fail to meet compliance matters. If any dispute arises, employees have the right to file a complaint against their employer. The complaint can be filed through the MHRSD platforms. After an audit, if an employer proves guilty, they’ll face a fine imposed by the authorities. Employers may also be required to pay unpaid overtime. Failing to pay overtime on time will lead them to face reputational damage.
Labor disputes:
Employees can file complaints through the MHRSD platforms.
MHRSD penalties:
Authorities may impose fines after inspections or audits.
Payroll audits and back-pay risks:
Employers may need to pay unpaid overtime retroactively.
Reputation damage:
Non-compliance affects employee trust and employer branding.
Best Practices for Employers (2026 Ready)
Employers can follow the best practices to make their business run flawlessly. Start by leveraging time tracking systems to record employee timings and attendance. Defining overtime policies is necessary to avoid any dispute. Beforehand, adjust schedules for Ramadan and set clear payroll policies. Moreover, internal reviews must be regularly performed to eliminate financial risks. Staying updated is the golden rule as Saudi labour law has become tighter in 2026.
Accurate time tracking:
Use biometric or digital attendance systems.
Clear overtime policies:
Define overtime rules clearly in contracts.
Ramadan and holiday planning:
Adjust schedules and payroll rules in advance.
Regular payroll audits:
Internal reviews reduce legal and financial risks.
Stay updated:
Labor law enforcement continues to tighten in 2026.
Benefits of Using HR Software for Overtime Management
Managing overtime in Saudi Arabia can get confusing, especially with changing schedules, Ramadan hours, and tighter inspections. HR software helps simplify this by automatically calculating overtime according to Saudi labor law, reducing manual effort and payroll mistakes.
With real-time tracking, employers can easily monitor working hours while employees can clearly see their overtime and earnings. This transparency helps build trust and reduces disputes. The software also creates clear payroll reports, which are helpful during audits or compliance checks.
By handling weekends, public holidays, and Ramadan rules accurately, HR software makes overtime management smoother and less stressful for Saudi employers.
Choosing the Right HR Software Solution:
The right choice of HR software brings you many benefits. That’s why it’s very important to take the decision wisely when you have to select the software solution for your business.
Automating overtime calculations:
Overtime can be calculated through HR software such as Pittant. Don’t rely on outdated and manual methods when you have an option to automate your tasks. Automation eliminates manual errors.
Reducing payroll mistakes:
Leveraging HR software is a great solution. No need to put anything manual. Systems apply legal formulas consistently. Utilizing them will reduce errors that often come when you calculate everything on a manual basis.
Supporting audits:
Using HR software to calculate overtime will support your findings during the audit. Digital records simplify inspections and disputes.
Managing complex scenarios:
When you say goodbye to old, traditional methods, you’ll manage everything more smartly. Modern software handles Ramadan, shifts, and holidays. It is far better than recording anything manually.
Final Verdict:
Overtime calculation requires accuracy to calculate. Both the employer and employees need awareness about it. Having proper knowledge helps maintain compliance. Enforcement becomes tighter in 2026. Therefore, both parties benefit from understanding legal working limits. The proper information about overtime formulas is equally important. Special rules for weekends and Ramadan have their significance. Knowing them gives employees the right to work under rules set by Saudi law. Provide awareness to employers pay overtime correctly. The correct amount of payment calculated builds trust. This avoids disputes and protects businesses from penalties.
Require help with overtime calculation? Get assistance from Pittant’s team. Our team has proper systems and updated policies in place. We help you manage overtime fairly and stress-free for your workers.
FAQs
What is the overtime rate in KSA?
Saudi Law sets overtime pay at 150 percent of the worker’s regular hourly wage.
How is the hourly wage calculated for overtime?
Divide the monthly salary by thirty days. Then divide by eight working hours.
Is overtime essential during Ramadan?
Yes. Any work beyond reduced Ramadan hours qualifies as overtime.
Are weekends and public holidays considered overtime?
Absolutely!
Work on rest days or holidays requires overtime compensation. It is an additional pay than the regular one.
How is the basic salary used to calculate the value of an employee’s annual leave in Saudi Arabia?
To determine annual leave pay, the basic salary is divided by thirty days to find the daily rate.
Can annual leave be split into parts? What are the conditions for this in Saudi Arabia?
Yes!
Saudi employees can split leave if approved by the employer. This workflow ensures continuity and mutual agreement.
What happens to unused annual leave when an employee’s service ends in Saudi Arabia?
At termination, unused leave is converted into cash compensation based on the employee’s basic salary.
Are there regulations on when the employer must approve or schedule annual leave for an employee in Saudi Arabia?
Saudi employers must approve leave, considering business needs. However, workers should request it in advance for approval.
Does Saudi labour law allow cash-out of annual leave while the employee is still in service?
Employees can cash out unused leave. Given that, it’s agreed upon with the employer and documented properly.
How many leave days is an employee entitled to after more than five years of continuous service with the same Saudi employer?
After five years of continuous work, your workers are eligible for thirty days of annual leave.
What types of leave other than annual leave might affect or reduce the accrual of annual leave in Saudi Arabia?
Various leave types can directly affect the annual leaves, including:
- Sick leave
- Unpaid leave, or
- Long-term absence.
How can payroll and HR software help correct the calculation and documentation of annual leave?
Softwares for payroll and HR are used to automate leave tracking. You can leverage them to get accurate pay calculations while maintaining compliance with Saudi labor regulations.
