How is overtime pay calculated in Saudi Arabia?
Published
Overtime pay is the amount due when an employee works beyond standard working hours. Under Saudi labor rules, overtime compensation is the hourly wage plus 50% of the employee's basic hourly wage. Work during public holidays and official vacations is treated as overtime.
The examples on this page use a fictional business (Al Waha Office Supplies). Figures are illustrative only and are not real business data or sector benchmarks.
Short answer
Overtime pay compensates work outside standard hours. In Saudi Arabia, the key point is that overtime is not just a normal hour. It is the hourly wage plus the statutory addition based on basic hourly wage.
Practical formula
Hourly wage = Monthly wage ÷ Approved monthly work hoursOvertime hourly pay = Hourly wage + 50% of basic hourly wageTotal overtime pay = Overtime hourly pay × Overtime hours
Worked example
An employee has SAR 6,000 monthly basic salary, and the approved monthly hours are 240. The employee works 10 overtime hours.
Basic hourly wage = 6,000 ÷ 240 = SAR 2550% addition = SAR 12.50Overtime hourly pay = SAR 37.50Total overtime pay = 37.50 × 10 = SAR 375
Common mistakes
| Mistake | Effect |
|---|---|
| Calculating overtime on net salary | The result cannot be reviewed |
| Ignoring official holiday hours | The employee is underpaid |
| Not documenting approval and hours | Disputes at review or claim time |
Cases that need attention
| Case | Note |
|---|---|
| Work on holidays | Treated as overtime under HRSD guidance |
| Shift work | Review the approved working-hour basis |
| Compensatory leave | Requires employee consent and regulatory treatment |
| Annual overtime limit | Verify the applicable limit before relying on it |
Example 2: employee with fixed allowance
If monthly wage is SAR 7,500, made of SAR 6,000 basic and SAR 1,500 allowance, total hourly wage may be SAR 31.25 while basic hourly wage is SAR 25. Overtime hourly pay = 31.25 + 12.50 = SAR 43.75. This shows why basic wage and allowances must be separated.
Frequently asked questions
Is work on a public holiday overtime?
Saudi HRSD guidance states that working hours performed during holidays and official vacations are considered overtime hours.
Can overtime be compensated with leave instead of cash?
The law allows paid compensatory leave instead of overtime wages with the employee's consent and according to the regulations.
Is 240 monthly hours always correct?
No. It is only an example. Use the approved working-hour basis in the contract, company policy, and applicable rules.