Do you have some extra time on your hands believing that overtime is not need in your company? You may have heard from others that overtime is forbidden in the Kingdom. This is absolutely incorrect as employers in the Kingdom are require to pay for overtime worked by their employees. Overtime shall be paid for hours work above 48 per week with a compensation rate of 100% of regular pay. In this article, we provide you best method of How to calculate overtime in Saudi Arabia?
Saudi Arabia is one of the richest countries in the Arab world and it has a massive population which makes its economy grow at a very high rate. The labor market of Saudi Arabia is also one of the most active and successful economies in the Gulf region. It hosts millions of expats from all across the world and provides them with good career opportunities.
Overtime is one of the privileges of an employee working in Saudi Arabia. This is to compensate for the long hours he puts up working for the company. Overtime is also a way to attract more qualified and skilled workers as it is usually given as monetary compensation rather than an extended break from work.
Overtime is very common in Saudi Arabia, and sometimes it becomes a necessity. But there are some rules that you should be aware of. Saudi Arabian labor law stipulates that employees who work overtime receive 150% of their usual wage for the first two hours of overtime, and 200% for any additional hours worked.
This payment is irrespective of seniority or job title. The important thing to remember is that over time can only begin after eight hours of work have been complete. Furthermore, no more than three hours of overtime may ever be work in one day.
How to Calculate Overtime in KSA?
Here we provide you with a step-by-step on Overtime Calculation in KSA.
1. Calculate your hourly rate of pay. This is your regular rate of pay, which you can find on your pay stub.
2. Multiply your hourly rate of pay by 0.5. This is the overtime rate for an hour of work in Saudi Arabia.
3. Multiply the overtime rate by the number of hours worked over eight per day or 40 per week to calculate the amount owed for overtime for each day or week worked.
For example, an employee with a monthly basic salary of SR 3,000 has worked for 50 overtime hours in a month. Here’s how you’d calculate your overtime salary:
Monthly Basic Salary = SR 3,000.
Normal Working Hours = 8 hours/day.
Wages per Hour = 3,000 / 30 days / 8 hours = SR 12.5.
Overtime per hour = SR 12.5 X 1.5 = SR 18.75.
Total Overtime = SR 18.75 X 50 overtime hours = SR 937.50
Basic Rules and Regulations for Overtime in Saudi Arabia
Calculating overtime in Saudi Arabia can be a little tricky, but don’t worry—we’re here to explain it all!
- First, let’s start with the basics: According to Article 107 of the Saudi Labor Law, the employer must pay the worker an additional amount for overtime working hours. It sounds simple enough, right? But there are a few things you should know that might help you understand exactly how much your employees should be paid for overtime work.
- If your company operates on weekly working hours, then any hours that exceed the normal daily working hour will be considered overtime. For example, if your employee usually works from 9 am-6 pm on weekdays, any hours worked after 6 pm will count as overtime hours.
- It’s also important to know that all hours worked during holidays and Eid days will be consider overtime as well. If a holiday falls on a weekend or regular day off for your employee, you do not need to give them an additional day off in lieu of their time working on that day.
Working Hours During Ramadan
If you are living in Saudi Arabia, you may be wondering how to calculate overtime during Ramadan. The answer is pretty straightforward: overtime is calculate exactly the same way during Ramadan as it is any other time of the year.
Saudi Arabia has a few regulations on working hours during Ramadan that all Saudi employers must follow when they have employees who are fasting. Here they are:
For Muslim Workers
Saudi Labor Law states that Muslim workers are allow to work 6 hours a day or 36 hours per week during Ramadan. This is an average of 6 hours a day over 6 days, but there may be variations in work schedules as long as they respect Article 98 of the law.
For Non-Muslim Workers
Saudi Labor Law states that non-Muslim workers are allow to work 8 hours a day or 48 hours per week during Ramadan. This is an average of 8 hours a day over 6 days, but there may be variations in work schedules as long as they respect Article 98 of the law.
If you are not working during Ramadan, your daily working hours will be eight hours a day or 48 hours a week. Overtime pay is calculate at 50% of your basic wage for the first two hours and 100% of your basic wage for each hour after that.
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