Part of the guide: Saudi HR & Payroll Toolkit 2026: GOSI, End of Service, Days

Overtime Calculation in Saudi Labor Law (2026)

By Faizan Published October 27, 2026 13 min read HR & Payroll

Overtime calculation in Saudi Labor Law is easy to get wrong if you multiply every extra hour by 150% of the employee's total salary. Article 107 uses two different wage figures: the actual hourly wage and an extra 50% of the basic hourly wage. Mixing them up can leave a real difference in the monthly payslip.

For example, an employee earns SAR 6,000 basic salary and SAR 2,000 in qualifying allowances. Using the standard 30-day, eight-hour example published by the Ministry of Human Resources and Social Development (HRSD), ten overtime hours are worth SAR 458.33.

The steps below explain which hours count, how Ramadan and holidays affect the calculation, and how to check the answer in Excel or PHP.

Quick formula:

Hourly actual wage = Actual monthly wage / 30 / 8
Hourly basic wage  = Basic monthly wage / 30 / 8
Overtime hourly rate = Hourly actual wage + (Hourly basic wage * 0.50)
Overtime pay = Overtime hourly rate * Qualifying overtime hours

The 30-day and eight-hour divisors are from HRSD's published example. Do not assume that they cover every nonstandard contract or shift arrangement.

Normal Working Hours and Ramadan in Saudi Arabia

Article 98 sets the usual ceiling at eight actual working hours per day when the employer uses a daily standard, or 48 hours per week when it uses a weekly standard. During Ramadan, the limits for Muslim employees fall to six hours per day or 36 hours per week. Non-Muslim employees remain subject to the normal Article 98 limits unless another applicable arrangement provides otherwise.

Worker or arrangement	Daily limit	Weekly limit
Ordinary Article 98 standard	8 hours	48 hours
Muslim employee during Ramadan	6 hours	36 hours
Non-Muslim employee during Ramadan	Generally 8 hours	Generally 48 hours

These limits concern actual work, not simply the time between clocking in and leaving the building.

Suppose a worker clocks in at 8:00 a.m., takes a genuine one-hour lunch break and leaves at 5:00 p.m. The nine-hour span includes only eight actual working hours. Under Article 102, rest, prayer and meal breaks are not working time, provided the employee is genuinely free from work duties during those breaks.

There are related rules worth checking before approving a schedule:

Article 99: Certain categories of work may have a nine-hour daily limit or a reduced seven-hour limit, as specified by ministerial decision.
Article 100: Ministry-approved rotating shifts may use an average over three weeks or less, within the stated limits.
Article 101: Workers must receive a break of at least 30 minutes after no more than five consecutive working hours. The current Arabic text published by the Saudi Bureau of Experts specifies a ceiling of 11 hours at the workplace in a day. Some older English ministry material still says 12, so do not rely on an outdated translation.
Article 104: Friday is the default weekly rest day, with a permitted substitution process. The designated weekly rest is paid and must be at least 24 consecutive hours.

Ramadan payroll trap: The reduction to six working hours for Muslims does not, by itself, establish that every overtime hourly wage must be calculated using a divisor of six. HRSD's illustrated formula uses eight. Employers should check the relevant contractual arrangement and current guidance instead of silently switching divisors in the payroll application.

What Counts as Overtime Under Article 107?

You need to classify the time before you calculate the amount. The same hour should not be paid twice merely because it crosses more than one label in an attendance system.

Hours beyond the adopted daily or weekly standard

Under the daily standard, hours beyond the applicable normal limit ordinarily call for overtime assessment, subject to the lawful exceptions. Article 107 specifically says that establishments using a weekly standard treat hours beyond the adopted weekly standard as overtime.

If an employer applies a 48-hour weekly standard and a worker performs 52 qualifying hours, four hours exceed that standard. Where an employee has a shorter contractual week, check whether the agreed terms provide a more favorable overtime entitlement.

Do not calculate an eight-hour daily excess and a 48-hour weekly excess independently, then add overlapping hours together. That can double-count the same work.

Eid, public holidays and official vacations

Article 107 expressly counts all hours worked during holidays and official vacations as overtime. Article 112 separately provides for fully paid holiday leave on the occasions set by the regulations.

For instance, six hours actually worked during an applicable Eid holiday are six overtime hours. If the worker receives a monthly salary, the regular holiday entitlement and the extra pay for working those hours must be handled separately. Do not cut the monthly salary merely because the day was a paid holiday.

Friday and the designated weekly rest day

Friday work is not automatically overtime in every workplace. Article 104 allows an employer to substitute another weekly rest day for specified employees after notifying the relevant labor office and observing the applicable conditions.

A worker whose authorized regular schedule includes Friday may have ordinary working hours on Friday. A worker called in for additional hours on the designated weekly rest day after completing the normal week has a different situation. Assess the additional hours and preserve the employee's weekly rest entitlement.

Paying for extra work does not automatically permit an employer to buy out the required weekly rest. Article 104 says that weekly rest cannot simply be replaced with cash, subject to the exceptions provided by law.

For approved rotating shifts under Article 100, use the relevant authorized averaging arrangement rather than assuming that every shift longer than eight hours automatically attracts overtime.

Saudi Labor Law Overtime Formula Explained

Article 107's two wage components come from the definitions in Article 2.

Basic wage is the contractual wage for the employee's work, including qualifying periodic increments. Ordinary housing and transport allowances are not automatically part of this basic-wage figure.

Actual wage is broader. Depending on the contract and the legal definition, it can include the basic wage plus qualifying allowances, commissions, contractual bonuses and other wage components. Expense reimbursements are not automatically wages just because they appear on the same payslip.

That distinction gives the following formula for HRSD's standard monthly example:

A = (Basic salary + Qualifying allowances) / 30 / 8
B = Basic salary / 30 / 8
Overtime rate = A + (B * 0.50)
Total amount = Overtime rate * Overtime hours

The difference matters when allowances are substantial. Calculating the whole amount from basic salary can underpay the employee. Applying the 50% premium to the entire actual salary can produce a higher amount than the illustrated statutory formula, although a more favorable contractual rate may still apply.

Article 2 generally defines a month as 30 days unless the contract or work regulations stipulate otherwise. HRSD's official awareness guide also demonstrates the calculation with 30 days and eight hours. Use another denominator only after confirming that it is appropriate for the particular employee and arrangement.

Worked Saudi Overtime Examples in SAR

Consider a monthly-paid employee with these salary components:

Component	Amount
Basic salary	SAR 6,000
Housing allowance	SAR 1,500
Transport allowance	SAR 500
Actual monthly wage	SAR 8,000

Assume the allowances qualify as part of the actual wage and the standard 30-day, eight-hour calculation applies.

Step 1: Find the actual hourly wage.

8,000 / 30 / 8 = SAR 33.333333...

Step 2: Find the basic hourly wage.

6,000 / 30 / 8 = SAR 25.00

Step 3: Add the basic-wage premium.

25.00 * 50% = SAR 12.50
33.333333... + 12.50 = SAR 45.833333... per overtime hour

Step 4: Multiply by the qualifying hours.

10 * 45.833333... = SAR 458.33 after final rounding

Now suppose that, during one payroll period, the same worker records ten ordinary extra hours, eight extra hours on the designated weekly rest day after completing the normal schedule, and six hours worked on an official Eid holiday. Assume the time intervals do not overlap and all 24 hours qualify for overtime.

Overtime category	Hours	Amount
Extra hours on ordinary days	10	SAR 458.33
Additional designated rest-day hours	8	SAR 366.67
Hours worked on an Eid holiday	6	SAR 275.00
Total	24	SAR 1,100.00

The calculation uses the unrounded hourly rate, then rounds the total monetary amount. If you round the rate to SAR 45.83 first and multiply by 24, the answer is SAR 1,099.92. That is eight halalas lower.

The illustrative gross payroll before other adjustments would be SAR 8,000 normal actual wage plus SAR 1,100 overtime compensation, or SAR 9,100. GOSI uses its own contributory-wage rules, so do not assume that every gross payroll component is necessarily subject to the same deductions.

For related figures, see the HeadsNTail paycheck calculator and Saudi GOSI contribution rates for 2026.

Annual Overtime Limits, Exceptions and Paid Leave

Accurate arithmetic does not automatically make a work schedule lawful. The employer must also follow the working-hour, rest and overtime rules.

The 720-hour annual threshold

HRSD's overtime knowledge-centre page states that annual additional working hours must not exceed 720 hours, with an increase possible with the worker's consent under the relevant implementing provision.

Treat this as a compliance threshold, not a work target. Payroll software should warn as the accumulated overtime approaches the applicable limit, record employee consent where required and send exceptions for human review. It should not silently erase hours that the employee has already worked.

Article 10 generally uses Hijri periods unless the contract or work regulations provide otherwise. Confirm the employer's applicable counting period before implementing an annual limit using Gregorian database queries.

Article 106 exceptions

Article 106 addresses limited situations such as annual stocktaking and account closing, accident prevention, avoiding loss of perishable materials, unusual work pressure and specified seasonal activities. Annual stocktaking and related preparation work have a 30-day annual restriction in the article. That specific restriction should not be applied indiscriminately to all exceptions.

Even within Article 106 circumstances, the specified ceiling is ten actual working hours per day or 60 per week. These exceptions do not automatically remove the Article 107 overtime-pay obligation.

Article 108 categories

Article 108 removes Articles 98 and 101 from certain defined categories, including employees with genuine employer-like senior management authority, specified preparatory or intermittent work, and some guarding or cleaning functions. Regulations govern the relevant job classifications and limits.

A job title such as "supervisor" or "manager" is not enough to prove an exemption. Article 108 also does not expressly cancel Article 107 for everyone in those categories. Review actual responsibilities and the implementing rules before excluding a person from overtime calculations.

Paid time off instead of overtime wages

The amended Article 107 permits paid compensatory leave instead of overtime wages when the worker agrees. HRSD's awareness guide specifies these conditions:

Condition	Rule in HRSD guidance
Employee consent	Required
Leave earned	At least 1.5 hours for each overtime hour
Use of leave	Within 60 days, unless the parties agree otherwise
Annual compensatory leave	Maximum 30 days

For eight overtime hours, the minimum leave entitlement under that conversion is 12 hours. On an eight-hour working day, that equals one and a half working days. Track it separately from ordinary annual leave and retain the worker's consent.

These provisions were introduced with the 2025 amendments that took effect on 19 February 2025. They matter when reviewing older payroll systems or articles that only mention cash overtime compensation.

Excel and PHP Examples You Can Verify

A payroll formula should be easy to test with known figures. The example below is deliberately small enough to audit by hand.

Excel formula

Put basic salary in B2, housing in C2, transport in D2, other qualifying allowances in E2 and approved overtime hours in F2.

Cell	Paste this formula
G2	`=SUM(B2:E2)/30/8`
H2	`=B2/30/8*50%`
I2	`=ROUND((G2+H2)*F2,2)`

Column G calculates the actual hourly wage. H calculates the 50% premium on basic hourly wage. I calculates the payable overtime amount.

Test the formulas with B2 = 6000, C2 = 1500, D2 = 500, E2 = 0 and F2 = 10. Cell I2 should return 458.33.

If it returns 375.00, you may have used the basic wage for both components. If it returns 500.00, you may have applied 150% to the entire actual wage.

PHP example for a payroll application

This self-contained PHP example accepts the wage components, overtime hours and divisors. It validates the inputs so a negative number or zero divisor is not quietly accepted.

<?php

declare(strict_types=1);

function overtimePay(
    float $basic,
    float $allowances,
    float $hours,
    float $daysInMonth = 30.0,
    float $hoursPerDay = 8.0
): float {
    foreach ([$basic, $allowances, $hours, $daysInMonth, $hoursPerDay] as $value) {
        if (!is_finite($value)) {
            throw new InvalidArgumentException('All inputs must be finite numbers.');
        }
    }

    if ($basic < 0 || $allowances < 0 || $hours < 0 ||
        $daysInMonth <= 0 || $hoursPerDay <= 0) {
        throw new InvalidArgumentException('Invalid wage, hours or divisor.');
    }

    $divisor = $daysInMonth * $hoursPerDay;
    $hourlyActual = ($basic + $allowances) / $divisor;
    $hourlyBasic = $basic / $divisor;
    $rate = $hourlyActual + ($hourlyBasic * 0.50);

    return round($rate * $hours, 2);
}

echo number_format(overtimePay(6000, 2000, 10), 2), PHP_EOL;
echo number_format(overtimePay(6000, 2000, 24), 2), PHP_EOL;
echo number_format(overtimePay(6000, 2000, 0), 2), PHP_EOL;

Save the file as overtime.php and run:

php overtime.php

Expected output:

458.33
1,100.00
0.00

These three cases were also executed separately with PHP and captured in the accompanying verification screenshot. Add that screenshot here when uploading this article to your content management system. It shows the sample wages and the passing test outputs, not a real employee's payroll data.

Production warning: PHP floating-point values are suitable for demonstrating the formula but are not ideal as the authoritative representation of money. For production payroll, use fixed-precision decimals or a carefully designed integer minor-unit calculation, with a documented rounding policy.

Laravel overtime totals and overnight shifts

In a Laravel application, total the approved overtime hours using the period applicable to the employee. This example assumes an Overtime model with matching field names:

$approvedHours = Overtime::query()
    ->where('employee_id', $employeeId)
    ->where('status', 'approved')
    ->whereDate('work_date', '>=', $periodStart)
    ->whereDate('work_date', '<', $periodEndExclusive)
    ->sum('hours');

The end date is exclusive to avoid counting a boundary date twice. Set the dates using the applicable annual period and check that approved records agree with actual worked hours. An omitted approval record does not automatically eliminate wages legally due for work already performed.

If a shift runs from 10:00 p.m. on Thursday until 6:00 a.m. on Friday, do not assign every hour to Thursday merely because the employee clocked in then. Split the worked interval across relevant schedule or holiday boundaries, subtract genuine breaks and classify each part without duplicating the same minutes.

Records should include the date, actual start and end time, break duration, reason for overtime, wage components, approval details and payment status. Article 17 requires workplace records and a visible working-hour schedule; Article 9 governs Arabic records. Article 90 addresses regular wage payment.

Also reconcile unpaid overtime on termination. Article 88 generally requires settlement within one week after the employment relationship ends, or within two weeks when the employee terminates the contract. Unpaid overtime must not disappear during final settlement. See the Saudi end-of-service calculation guide for the related process.

FAQ and Final Payroll Checklist

How do I calculate overtime pay in Saudi Arabia?

Calculate the actual hourly wage, then add half of the basic hourly wage and multiply by qualifying overtime hours. In the HRSD 30-day, eight-hour example, SAR 8,000 actual wage and SAR 6,000 basic wage produce SAR 458.33 for ten overtime hours. Check the contractual wage components and the hours before applying the formula.

Is overtime always 150% of salary in Saudi Arabia?

No. Article 107 uses the hourly wage plus 50% of the hourly basic wage. If the actual wage includes housing or transport allowances, the result can differ from multiplying the entire actual hourly wage by 1.5. A contract or employer policy may provide a more favorable amount.

Do Muslim employees receive overtime after six hours in Ramadan?

Article 98 reduces their normal working-hour limit to six hours a day or 36 hours a week. Extra work must be assessed against the applicable working-hour arrangement. That does not automatically mean every employer must divide the monthly wage by six when finding the hourly rate.

Are Eid and Friday working hours paid as overtime?

Article 107 expressly treats work during official holidays as overtime. Friday depends on the employee's properly designated weekly rest day and normal schedule. Where another day has lawfully replaced Friday as the rest day, Friday is not automatically an overtime day.

What should payroll check before paying overtime?

Check the actual and basic wages separately, make sure the same hour is not counted twice, confirm the adopted working-hour standard, verify Ramadan and holiday classifications, preserve the weekly rest, and round only under a documented monetary policy. For compensatory leave, retain employee consent and the leave balance.

The calculation itself may take a minute. Checking the attendance record, wage base and legal classification is where most disputes can be prevented.

Official sources

This guide is general payroll information, not individualized legal advice. Verify unusual employment arrangements against current official rules before making a disputed payment.