Working hours and wages

Article 107 of the Saudi Labour Law:how overtime pay is calculated

Article 107 requires the employer to pay the hourly wage plus fifty percent of the basic wage for each overtime hour. The 1446H amendment added paid compensatory leave as an option if the employee agrees.

Article 107
Explanatory guidance

Article 107 sets the overtime rate, and the rate is a minimum. An employer can agree to pay more, but cannot pay less even if the employee agrees, because statutory entitlements cannot be waived.

Royal Decree M/44 of 1446H amended the first paragraph to add a new option. Instead of overtime pay, the employee can be given paid compensatory leave, if they agree and as the Regulations set out.

The text of the article

01The employer shall pay the worker for overtime hours an additional wage equal to the hourly wage plus 50% of the basic wage. The employer may, with the worker's agreement, credit the worker with paid compensatory leave days in place of the wage due for overtime hours, as detailed by the Regulations.
02Where the establishment operates on a weekly standard of working hours, hours exceeding that standard are overtime hours.
03All hours worked on holidays and feast days are treated as overtime hours.
Status of the text: Paragraph 1 amended by Royal Decree M/44 dated 8/2/1446H, effective 20/8/1446H. Paragraphs 2 and 3 are unchanged.

The official reference is the Arabic text published by the Bureau of Experts at the Council of Ministers.

The English above is a working translation.

The formula and the hours limit

An overtime hour is paid at the ordinary hourly wage plus half the basic hourly wage. That works out to 1.5 times only when the whole wage is basic. To get the hourly wage, divide the monthly wage by thirty, then by the daily working hours.

Article 106 also applies. It allows the usual hours to be exceeded in certain cases, as long as actual working hours do not go above ten a day or sixty a week.

Weekly hours change when overtime starts

If an employer works to weekly hours, overtime is the time worked beyond the agreed weekly total, not beyond each day. This suits flexible shifts where one day is long and another short.

Holiday hours count in full

Under paragraph 3, every hour worked on a holiday or feast day is overtime, not only the hours beyond a normal day. Eight hours worked on a feast day are all paid at the overtime rate.

Compensatory leave needs the employee's agreement

The employer cannot switch overtime pay to leave on its own. The 1446H text requires the employee's agreement and leaves the details to the Regulations. An employer using this option needs the employee's consent on record and a leave balance the employee can see.

What payroll should show

Overtime hours for each employee, taken from attendance records and not from a manager's estimate.
The hourly wage used and its basis, so the employee can check it.
Holiday and feast-day hours shown separately, since all of them are overtime.
Overtime on its own payslip line, not merged into another amount.
Any compensatory leave balance, with evidence of the employee's agreement.

Common mistakes

Computing overtime on the basic wage alone

The text requires the hourly wage plus half the basic wage. Anything less underpays the employee.

Paying a flat allowance instead

A fixed amount does not replace the calculation. If it is less than the Article 107 entitlement, the employer still owes the difference.

Imposing compensatory leave

The option needs the employee's agreement. Converting overtime to leave on a management decision alone does not comply with the amended text.

How Barez applies this article

Overtime derived from attendance

Hours come straight from the attendance record, with no separate spreadsheet or manual entry.

Paid through payroll at the legal rate

The overtime allowance enters payroll as its own line at the statutory rate and shows on the employee's payslip.

Assigned before it is worked

Overtime is assigned and approved first, so the employer has proof that the hours were requested.

Sources

This page is explanatory guidance, not legal advice. In a dispute, rely on the official text and consult the Ministry of Human Resources and Social Development or a licensed lawyer.

Article 107

Frequently asked questions

What is the overtime rate in Saudi labour law?

At least the hourly wage plus 50% of the basic hourly wage. An employer can agree to pay more, but not less.

Is work on a weekly rest day or holiday overtime?

Yes. Paragraph 3 of Article 107 treats all hours worked on holidays and feast days as overtime hours, so the whole day is paid at the overtime rate.

Can overtime be paid as time off instead?

Yes, since the 1446H amendment. Paid compensatory leave can replace overtime pay, but only if the employee agrees and as the Regulations set out.

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