Factors to Consider when Signing an Employment Contract in Saudi Arabia

By signing an employment contract, you actually commit yourself with the employer for some months or years. Hence, it is an important decision of your life since you are going to sell your services to an employer. While making this decision, you need to consider several factors. Here we are providing you list of factors to consider while signing a contract. These factors are especially related to Saudi Arabian job market. However, most of the points are valid for other Middle East countries as well.

Benefits in Cash: This is obviously the basic factor and at least half of your decision depends upon it. You should compare your salary with the salary you are already getting and or other comparative offers you have right now. Obviously, you should go for a better salary. If your job is in some other country and you don’t know about the cost of living of that country, it is better to ask someone in that country about the salary offered to you. For example, if you are coming to Saudi Arabia from Pakistan and being offered SR 3,000/-. It is a good package if you convert this amount into PKR or INR but cannot be treated a good package in Saudi Arabia. Read your contract several times before signing it. Here we are providing some matters you should look into before signing a contract.

Housing: Normally in Saudi Arabia, housing or housing allowance is included in the job offer. If your employer is not providing you housing, you can ask for it. The employer is bound by the Saudi Labor Law to provide you one of housing or housing allowance. If housing allowance is provided in the offer, check analytically that it is around 20% or more of your basic salary. If it is less than 20% of your basic salary, you should not accept it in the contract and negotiate with your employer. Let me tell you one thing, average market rate of housing allowance is around 25% of basic salary. If the employer is providing you physical housing instead of housing allowance, check if the housing provided is comfortable. Again, the house provided to you should have a worth of at least 20% of your basic salary. You can ask several questions to determine if housing provided is reasonable.

  • How many rooms are there in the house provided to you
  • How far the accommodation is from the working area
  • If you are not given the independent house, is the room given to you independent?
  • How many people will be sharing the room if it is not independent?

Transportation Allowance: Transportation or Transportation allowance needs to be provided to you under labor law. You have all the rights to ask your employer to include it in your package if it is not already included. If transportation allowance is in the contract, it should be around 8-10% of your basic salary. If you are given car by the company, it should be according to your designation.

Vacations: According to Saudi Labor Law, you are allowed to have at least 21 days paid annual vacation. If the specified vacation is less than this, you may ask your employer to increase it to 21. Although it is not relevant to signing a contract but you should know that if you have completed five consecutive years in a company, you are entitled to have at least 30 days paid annual vacation. If some employer is violating these terms, he is violating the Saudi labor law. Please read this article for the details of “Vacations Allowed under Saudi Labor Law

Family Status: It is a very important factor to consider while signing an employment contract, especially in Saudi Arabia. If you are not given family status, you would not be allowed to bring your family to Kingdom irrespective of your designation in the company.

Air Tickets: Saudi Labor law discusses vacations but it does not discuss air tickets. So, you need to see how many tickets in a year are provided by your company to your home country. Some companies provide 2 return tickets in a year, some provide 1 in 3 years. Whatever the case is, it is an important factor to consider while signing an employment contract. You should also consider that the air tickets are given only for you or for the whole family.

Probation Period: Probation period can be maximum of 3 months according to Saudi Labor Law. In this period, both of you are free to leave each other unless the contract embodies a clause giving the right to terminate the contract to only one of them. (Article 53 of Saudi Labor Law)

Medical Facility: Normally, employees are covered by the medical insurance by the company. However, it is not a legal requirement of labor law. If you are given family status, you need to consider if the medical facility is given to all your family members.

Education to Children: Education to 2 – 3 children is provided by the employees to the employers above a certain grade. However, it depends upon the pure discretion of the employer.

Working Hours: Although it is not covered by the contract, but normally in Saudi Arabia, there are 48 working hours allowed in a week. If your employer is asking you to work more than that, you are actually entitled to overtime of 1.5 times of normal time wages. If you want to read about it in detail, please read this article. “Working Hours and Overtime in Saudi Arabia

Average Salary by Profession in Saudi Arabia: Asking for a package or accepting a job offer can be dodging for you if you don’t know about the average salary of your profession in Saudi Arabia, I have published an article regarding this from which you can take a guidance about the package to ask for. “Average Salary by Profession in Saudi Arabia

 

  • Aika Tha-ngamu

    hi,
    my company provided us with the accomodation but insist we shoulder water and electricity bills. my contracts stipulates ” accomodation provided by compny” . is this fair and according to labor law? please mention if any instance the law says on this. thanks

  • Sarah Mansoor

    If both spouses are working, can both claim housing allowance?

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