How is an overtime hour paid?

What the article says

The first paragraph of Article 107 requires the employer to pay for overtime hours an additional wage equal to the hourly wage plus 50% of the worker's basic wage. It also allows the employer, with the worker's consent, to credit paid compensatory leave days instead of the overtime pay, and leaves the details to the Implementing Regulation.

"The employer must pay the worker an additional wage for overtime hours equal to the hourly wage plus fifty percent (50%) of the worker's basic wage. The employer may, with the worker's consent, credit the worker with paid compensatory leave days instead of the wage due for the overtime hours."

Labor Law, Article 107, paragraph 1 as amended. Unofficial translation; the Arabic text published by the Bureau of Experts at the Council of Ministers is the authoritative version.

Paragraphs 2 and 3 complete the rule:

• Weekly standard: if the establishment works on the weekly standard of working hours, the hours above those set for that standard are overtime hours.
• Holidays and Eids: all working hours performed on holidays and Eids are overtime hours.

What changed in 2025

Royal Decree M/44 kept the 50% rate unchanged. It added the option of crediting paid compensatory leave days instead of overtime pay, with the worker's consent, and left the related provisions to the Regulation. This applies from 19 February 2025.

Who it applies to

It applies to workers covered by the Labor Law, meaning anyone who works under an employment contract for the benefit of an employer, under the employer's management or supervision, for a wage (Article 5).

This explainer covers the private sector under the Labor Law. The article does not apply to the groups excluded by Article 7, which include domestic workers, agricultural workers and private shepherds. If your job falls under the civil service or a military system, this page does not cover it, so please check the rules that govern your position.

A general example with hypothetical numbers

Suppose an employee has a basic wage of SAR 7,200 a month and an actual wage of SAR 9,600 (the basic wage plus SAR 2,400 in allowances), and works on the daily standard of eight hours.

Article 107 does not say how the hourly wage is worked out. As an illustration, if the monthly wage is divided by 30 days (the Article 2 definition of a month, unless the contract or the work regulations say otherwise) and then by eight hours, and the actual wage is used for "the hourly wage" because Article 2 defines "wage" as the actual wage, then:

• Hourly wage: 9,600 ÷ 30 ÷ 8 = SAR 40.
• Basic wage per hour: 7,200 ÷ 30 ÷ 8 = SAR 30, and half of that is SAR 15.
• Overtime hour: 40 + 15 = SAR 55, so ten overtime hours come to SAR 550.

A hypothetical example with round numbers. The way the hourly wage is derived here is a reading of the text, not an express rule. The Implementing Regulation is the reference for the details, and the Ministry of Justice labor calculator, a guidance tool, can be used for comparison.

Common misconceptions

• "Overtime is only 50% of the basic wage." The text takes the full hourly wage and then adds 50% of the basic wage to it.
• "The employer can swap overtime pay for leave whenever it likes." Compensatory leave in place of pay requires the worker's consent.
• "Work on Eid is paid at the normal rate." All working hours on holidays and Eids are overtime hours (paragraph 3).
• "The weekly rest day can be paid out in cash." Article 104 says the weekly rest day may not be replaced with a cash payment.

Related articles

• Article 98: the ceiling on actual working hours, eight hours a day or 48 hours a week, and the Ramadan reduction for Muslims. See the Ramadan working hours page.
• Article 101: no more than five consecutive hours without a break of at least half an hour, and no more than twelve hours a day at the workplace.
• Article 104: the weekly rest day, on full pay and at least 24 consecutive hours.
• Article 106: lists cases in which the employer may set aside the limits of Articles 98 and 101 and paragraph 1 of Article 104, including annual stocktaking and meeting an unusual work pressure, provided actual working hours do not exceed ten hours a day or 60 hours a week. The Minister sets by decision the maximum overtime hours permitted in a year.
• Article 2: the definitions of basic wage, actual wage and month.

Official sources

• The Labor Law on the Bureau of Experts at the Council of Ministers website (Arabic), for Articles 107, 98, 101, 104, 106 and 2.
• The labor calculator on the Ministry of Justice portal, which includes overtime and is labelled by the ministry as a trial guidance release.

Text reviewed on 28 September 2026.