Annual Leave Calculation in Saudi Arabia

Employee Entitlement to Annual Leave in Saudi Arabia

  • Overview: Every employee working in KSA has the right to receive fully paid annual leave each year. This article outlines the calculation formula and provisions regarding vacation pay, salary, and leave encashment in Saudi Arabia.

Annual Leave Calculation

  • According to Article 109 of Saudi Labor Law, annual leave entitlement is as follows:
  • 21 days for employees with less than 5 years of service tenure.
  • 30 days for employees with more than 5 years of service tenure.
  • Example calculation:
  • Total Monthly Salary = SR 10,000.
  • Annual Leave Days = 21 days.
  • Leave salary calculation formula: Salary / 30 X Annual leave days.
  • Vacation pay calculation: 10,000 / 30 X 21 = SR 7,000.
  • Transportation allowance is also mandated to be paid during annual leave as per Article 2 of Saudi Labor Law.

Timing for the Leave

  • Article 109 and 110 stipulate that annual leave must be taken in the year it accrues.
  • Employer’s rights and responsibilities:
  • Scheduling annual leave according to work requirements, with a 30-day advance notice.
  • Postponing annual leave for up to 90 days in the following year.
  • Written consent required for further postponement, not exceeding one year.

Leave Encashment

  • Leave encashment involves cash payment for accrued leaves based on gross salary.
  • Provisions:
  • Prohibited during employee’s service tenure (Article 109).
  • Permitted for departing employees (Article 111).
  • Wages definition includes basic salary and other benefits (Article 2).

Annual Leave and Other Vacation

  • Eid vacation and public holidays are separate from annual leave (Article 112).
  • Example: If an employee takes 30 days’ annual leave during a month with Eid, they will receive 30+4 days.

Annual Leave and Sick Leave

  • Article 82 permits employees to combine annual leave with sick leave for rest.

Annual Leave for Domestic Workers

  • Domestic workers, like housemaids and drivers, are entitled to 30 days of paid leave after two years of service.

Calendar or Working Days?

  • Saudi Labor Law doesn’t specify whether annual leave comprises calendar or working days, but it’s commonly based on calendar days.

Transportation Allowance

  • Employees are entitled to transportation allowance during annual leave, as defined in Article 2 of Saudi Labor Law.

Useful Calculators