Annual Overtime Ceiling

What the annual overtime ceiling is

The annual overtime ceiling (الحد الأقصى السنوي للعمل الإضافي) is the number that overtime hours may not exceed within a year. It was set by the Implementing Regulation (اللائحة التنفيذية) of the Saudi Labor Law (نظام العمل) in Article 22 of the Implementing Regulation. It is 720 hours a year, and it may be exceeded with the worker’s consent.

This ceiling is separate from the daily and weekly limits on hours, and separate from the pay due for each overtime hour. It is a ceiling on the total of hours across a whole year, and it comes with a condition that must be stated whenever the figure is.

The text as it appears in the Implementing Regulation

Here is the Arabic text of Article 22 of the Implementing Regulation:

في تنفيذ أحكام (المادة السادسة بعد المائة) من النظام لا يجوز أن تزيد ساعات العمل الإضافية خلال السنة على سبعمائة وعشرين ساعة؛ ويجوز بموافقة العامل زيادة عدد الساعات الإضافية عن ذلك.

The English rendering is ours, not an official translation. In implementing the provisions of Article 106 of the Labor Law, overtime hours during the year may not exceed seven hundred and twenty hours, and the number of overtime hours may be increased beyond that with the worker’s consent.

Three things in that sentence are examined alongside one another:

• The figure. 720 hours during the year. It is a number of hours, not days.
• The exception in the same sentence. The increase is allowed with the worker’s consent. Anyone who states the figure as an absolute ceiling that cannot be exceeded has stated only half the rule.
• The reference to Article 106 of the Labor Law. The text begins by saying it is in implementation of Article 106 of the Labor Law, so it is tied to that Article and does not stand apart from it.

The figure is from the Implementing Regulation in the edition published in April 2025. In the sources we reviewed, we found no other figure, so the latest published edition of the Implementing Regulation should be consulted before it is applied.

Article 106 of the Labor Law, which the Implementing Regulation implements

Article 106 of the Labor Law allows the employer not to be bound by Articles 98 and 101 of the Labor Law and by paragraph 1 of Article 104 of the Labor Law in four cases. The first is annual stocktaking, preparing the budget, liquidation, closing the accounts, preparing for sales at reduced prices and preparing for the seasons, provided the number of days does not exceed thirty days in the year. The second is work to prevent a dangerous accident, to repair what it caused or to avert a certain loss of perishable materials. The third is meeting an abnormal pressure of work. The fourth is Eids, seasons, other occasions and seasonal works that the Minister determines by a decision.

Article 106 of the Labor Law then closes with two provisions. Actual working hours in all these cases may not exceed ten hours a day or sixty hours a week, and the Minister determines by a decision the maximum number of overtime hours that may be permitted in the year. The annual ceiling is therefore a matter that the Labor Law delegates, and it is the Implementing Regulation that stated a number.

Has a ministerial decision been issued on the annual maximum?

Article 106 of the Labor Law refers the setting of the annual maximum to a decision of the Minister. In the sources we reviewed, we found no ministerial decision on this subject, and the only figure we found is the one in Article 22 of the Implementing Regulation. We therefore neither assert that a decision exists nor that one does not, and we present the figure as attributed to the Implementing Regulation.

We also found no explanation of whether the ceiling of 720 extends to all overtime or is confined to hours performed in the cases of Article 106 of the Labor Law. The text speaks of overtime hours without qualification (ساعات العمل الإضافية), and it says it is in implementation of Article 106 of the Labor Law. We stop at the wording, and anyone who needs certainty in a particular case should go to the statutory text and the competent authority.

What counts as an overtime hour

Article 107 of the Labor Law settles part of this. Where operations are on the weekly standard of working hours, the hours that exceed the hours adopted for that standard are overtime hours. All hours worked on holidays and Eids are overtime hours.

Because Article 22 of the Implementing Regulation speaks of overtime hours without qualification, the cautious course is to include holiday and Eid hours in the total, and we found no text that excludes them from it. Holidays are covered under public holiday leave.

To whom the ceiling is applied

The text does not say for each worker in so many words. But making the increase depend on the worker’s consent indicates that the count is made for each worker individually, and not for the establishment on the total of its workers’ hours. This is a reading of the text and not a phrase in it.

For the work that paragraphs 2, 3 and 4 of Article 108 of the Labor Law exclude from Articles 98 and 101 of the Labor Law, the Implementing Regulation sets replacement limits on hours. Article 108 of the Labor Law does not exclude that work from Article 107 of the Labor Law on overtime, and in the sources we reviewed we found no text that says whether the same annual ceiling applies to it.

A calculation: where a worker stands against the ceiling in mid year

On average the ceiling is 720 ÷ 12 = 60 hours a month. Suppose a worker’s overtime hours in the first four months were 70, then 65, then 80, then 75.

• Total so far: 70 + 65 + 80 + 75 = 290 hours.
• The proportionate share for four months: 60 × 4 = 240 hours, so the worker is ahead of it by 50 hours.
• The remainder of the ceiling: 720 minus 290 is 430 hours for the remaining eight months, which is about 53.75 hours a month.

Reaching the ceiling shows up late for an establishment that does not keep a running total for each worker, because each month looks ordinary and the sum is discovered at the end of the year. The figures are assumed to show how the calculation works.

This calculation takes the year as starting from the first day of the first month. We found no provision that fixes the day from which the year over which the hours are added starts. Article 10 of the Labor Law provides that the periods of the Labor Law are computed on the Hijri calendar unless the contract or the work regulation (لائحة تنظيم العمل) provides otherwise, and we found nothing that says whether that rule extends to a period stated in the Implementing Regulation.

The consent that takes hours past the ceiling

Take a worker whose overtime reached 700 hours late in the year, where the establishment needs another 60 hours from the worker before the year ends. The total is 700 + 60 = 760, so the excess over the ceiling is 760 minus 720 = 40 hours. Those forty hours are what depends on the worker’s consent. The first 20 fall within the ceiling.

The Implementing Regulation allows hours beyond 720 with the worker’s consent. The text does not set the form of the consent, and we found nothing that requires it to be in writing, nothing that says whether it is a general consent or one for each occasion, and nothing that sets a further ceiling after consent. As a practical precaution, the consent can be written down, stating the amount agreed and its duration.

The text makes the increase depend on the consent of the worker, and it names no employer or other body to stand in for it. Anything beyond that, in describing a particular case, is for the competent authority.

Compensatory rest and its effect on the total

Article 107 of the Labor Law, after the amendment by Royal Decree M/44, allows the employer, with the worker’s consent, to credit paid compensatory leave days in place of the pay for overtime hours. Article 22 bis of the Implementing Regulation sets its conditions: the two parties agree on the duration of the assignment and the amount of leave, the leave is not less than one and a half hours for each hour of work, and compensatory leave in the year does not exceed 30 days in any circumstances.

If 40 overtime hours were credited as compensatory leave, the leave would be not less than 60 hours (40 × 1.5). In the sources we reviewed, we found no text that says whether these hours stay in the total towards the 720 after they have been compensated by leave, so the cautious course is to record them and add them unless the contrary is shown. Compensatory leave and the basis of overtime pay are set out in our guide to compensatory rest and the basis for computing overtime.

Figures that look alike and should not be mixed

• 720 hours a year. The ceiling on total overtime hours, in Article 22 of the Implementing Regulation, which may be exceeded with the worker’s consent.
• 10 hours a day or 60 hours a week. The ceiling on actual hours in the four cases of Article 106 of the Labor Law, and it is set in the Labor Law.
• 30 days in the year. It is written in the first case of Article 106 of the Labor Law alone and does not extend to the other cases. The four cases and their limits are set out under working hours exemptions.
• 30 days in the year for compensatory leave. A quite different ceiling, in Article 22 bis of the Implementing Regulation.
• 8 hours a day or 48 a week. The ceiling in Article 98 of the Labor Law on the standard the employer adopts, presented under statutory working hours.

Each of these figures measures something different: an annual total, a daily and weekly ceiling, a number of days, and a limit on leave. A table that places them in one column erases the difference between them.

What the annual ceiling does not provide

• It does not set the pay. What an overtime hour earns under Article 107 of the Labor Law is separate from the number of hours.
• It does not change the ceilings of Article 98 of the Labor Law. The daily and weekly ceilings remain on the standard the employer adopted, unless a case in Article 106 of the Labor Law applies.
• It does not count days of work. It is a number of hours, and it is not measured in days.

The phrase “a ceiling of 720” does not take the place of the text of the Implementing Regulation. Anyone who refers to it should cite “Article 22 of the Implementing Regulation of the Labor Law” and not merely the number.

What to record

This is a practical recommendation and not a requirement of the Implementing Regulation:

• A running total for each worker. Overtime hours accumulated since the start of the adopted year, compared monthly with the proportionate share.
• A written definition of the year. The contract or the work regulation states when the year over which hours are counted starts.
• Consents. The worker’s consent to hours beyond 720, with its date and the amount agreed.
• What was converted to leave. Hours credited as compensatory leave, with their proportion and date.

Provisions relied on for the annual overtime ceiling

The provisions relied on are those of the Saudi Labor Law as published by the Ministry of Human Resources and Social Development: Article 106 (the four cases, the ten and sixty hour bound and the delegation of the annual maximum to a ministerial decision), Article 107 (overtime hours and compensatory leave), Article 98 (the daily and weekly ceilings), Articles 101 and 104 (the daily rest rule and paragraph 1 on the weekly rest, which Article 106 lets the employer disregard in its four cases), Article 108 (the excluded categories) and Article 10 (Hijri periods). From the Implementing Regulation, in the edition published by the same Ministry in April 2025: Article 22 (the annual ceiling of 720 hours), Article 22 bis (compensatory leave) and Article 23 (replacement limits for excluded work). Royal Decree M/44 of 1446H, in force since 19 February 2025, amended Article 107 of the Labor Law, and it did not amend Articles 98, 106 or 108 of the Labor Law.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.