Saudi Arabia, the largest economy in the Middle East, is transforming rapidly under Vision 2030. The region is diversifying away from oil into technology, tourism and manufacturing sectors. This shift is fueling the private sector growth. 

In Q1 2024, the non-oil sector expanded by 5.3% while private sector employment grew by 8.4% yearly. This growth has increased the demand for new talent. However, hiring in Saudi Arabia must align with strict labor laws.

This is especially essential when it comes to probation periods, which serve as a critical phase in assessing new hires. This article offers a comprehensive overview of probationary periods in Saudi Arabia to help employers ensure legal compliance and make informed hiring decisions.

Definition of a Probation Period in Saudi Arabia

In Saudi Arabia, a probation period, known as “fatra al-tajrouba”, is a legally defined initial phase within an employment contract that allows both parties to assess the working relationship. It is governed by Article 53 of the Saudi Labour Law and subsequent amendments.

During this period, the employer assesses the employee’s performance and suitability for the role. On the other hand, the employee evaluates the workplace environment, job expectations and management style.

Saudi Arabia’s labor laws serve as employers’ critical risk management tool. The recently amended laws and Nitaqat Saudization policies are introducing more complex guidelines for employers.

Employment contracts must be in writing and bilingual (Arabic and another language if applicable). In case of any dispute, the Arabic version takes precedence. The probation concludes by either termination or automatic transition into a permanent employment agreement. 

Lengths of Probationary Periods in Saudi Arabia

Probationary periods in Saudi Arabia are regulated under the Saudi Labour Law (Royal Decree No. M/51 of 2005), with key changes introduced in February 2025 amendments. These amendments extended the maximum probation period from 90 to 180 days.

This includes any agreed extensions. The six-month limit also includes weekends and public holidays and applies regardless of the contract. Once the 180 calendar days are reached, the probation period can not be extended further.

At this point, the employment could either end or transition automatically into permanent employment.

Permanent or Indefinite Contracts

In Saudi Arabia, indefinite-term contracts are commonly used for Saudi nationals, while expatriate workers are generally employed under fixed-term agreements. Regardless of contract type, employment typically begins with a probationary period. 

If the initial period is shorter than the maximum 180 days, it may be extended once by mutual written consent. For expatriate workers, contracts must be fixed-term and in writing.

If no duration is specified, the duration of the employee’s work permit (Iqama) is the contract term. If neither party terminates the contract during probation, it automatically becomes a permanent agreement for Saudi nationals. 

It would also continue under the original fixed-term arrangements for expatriates.

Fixed-term or Definite Contracts

Under Saudi Labour Law, fixed-term employment contracts are limited-duration contracts. They are standard for employing expatriate workers. The fixed-term contracts typically specify a defined term, such as one or two years.

They can include a probationary period to evaluate a new hire before the full term begins. Fixed-term contracts can be renewed. However, if an agreement is renewed for two consecutive terms, or if the original contract term and its renewals reach three years (whichever is shorter). 

And both parties continue the employment relationship, it is automatically converted into an indefinite-term contract.

Legal Considerations for the Probation Period in Saudi Arabia

Probation periods in Saudi Arabia are regulated by the Saudi Labor Law and enforced by the Ministry of Human Resources and Social Development (MHRSD). The laws define the responsibilities of both employers and employees during the trial phase. This includes the termination, contract language, social insurance and working conditions.

Pay and Working Conditions

Employees in Saudi Arabia are entitled to basic labor protections during probation periods. This includes timely payment of wages and social insurance coverage. Employers must pay salaries through the WPS to ensure transparency.

Saudi nationals in the private sector must receive at least SAR 4,000 per month. This counts toward Saudization Nitaqat System quota calculations. Expatriate workers don’t have a mandated minimum wage.

Their pay is contractually negotiated. Public sector Saudi employees receive SAR 3,000 per month. The average monthly salary in Saudi Arabia is approximately SAR 11,000, equivalent to USD 2,932.

All Saudi employees and their employers contribute to the General Organization for Social Insurance (GOSI). The contributions start at 9% initially, gradually increasing by 0.5% until it reaches 11%.

Employers also pay an additional 2% for occupational hazards coverage. For non-Saudi employees, only a 2% occupational hazards contribution applies, mandatory from the start of employment, including the probation period. 

A new Social Insurance Law is effective as of 1st July 2025, and will apply to new hires without prior contributions.  

Termination and Notice

The Saudi Labour Law permits the employer or the employee to terminate the employment contract without cause, compensation, or entitlement to the End-of-Service Benefits (EOSB).  

As per the February 2025 amendments, only one day’s notice is required. However, if termination occurs near the end of probation, the employer must provide at least seven days’ notice before the final day. 

If the employee is found at fault or fails a mandatory medical test, they are responsible for their return travel costs. In all other cases, the employer typically bears this expense. Employees dismissed during the probation period are not entitled to statutory EOSB. 

These benefits only apply after completing two years of service. They are calculated as half a month’s wage for the first five years and one month’s wage for each subsequent year.

For confirmed employees, termination without cause requires compensation and advance notice: 60 days for indefinite contracts and 30 days for fixed-term contracts.

Vacation / Holidays

Saudi Arabia observes 12 public holidays each year. If any of these fall during the probationary period, the employee is entitled to the day off with full pay. If required to work on a public holiday, they must be compensated at 200% of their regular rate.

Annual leave entitlement begins after one year of continuous service, at a statutory minimum of 21 days per year. This increases to 30 days after five years of service. 

Since the probationary period cannot exceed 180 days, employees typically do not meet the minimum service threshold to take annual leave during this phase. 

However, if the contract transitions to permanent status or ends early, the employee may be entitled to prorated compensation for any accrued leave.

Benefits of Probation Periods in Saudi Arabia

Probation periods offer advantages for both workers and employers.

  • For Employees

Employees gain a defined period to experience their new work environment.

Employees have a flexible pathway to resign within the probationary period.

New employees are protected by fundamental labor rights.

Employers are expected to provide training and guidance during probation.

  • For Employers

Employers can assess a worker’s performance, reliability, and cultural fit.

Employers can terminate the employment contract more easily during probation.

Eliminate the financial and legal risks of an unsuitable hire.

Lead to higher engagement and a more productive and profitable start.

Conclusion

As Saudi Arabia continues its economic transformation under Vision 2030, hiring practices are evolving, in line with the law. The Saudi labor laws outline a structured and regulated probation period. It has played a crucial role in establishing compliance and effective employment relationships.

The financial costs of a bad hire are dire. With increased enforcement, where over 14,000 labor inspections were conducted in 2023 by the Saudi Ministry of Human Resources, employers must ensure complete compliance with probation regulations.

For international companies that are unfamiliar with local labor frameworks, expert support is essential. Remote People offers guidance and solutions to sail through Saudi Arabia’s employment and probation rules with ease.

Frequently Asked Questions

No. While not legally required, probationary periods are strongly recommended. If included, they must be specified in a written contract. The maximum allowable duration is 180 calendar days, including extension.

Yes. Either party can terminate the contract without cause or compensation, provided at least one day’s notice is given. Employees terminated during this period are not entitled to EOSB, which only applies after two years of continuous service. 

Yes. All expatriate employees must have a written contract in Saudi Arabia. If no duration is specified, the contract will match the validity period of the employee’s Iqama (work permit).