What is Overtime Calculation?
Overtime calculation is the process of computing the additional pay due to an employee for hours worked beyond the standard working hours defined by the Saudi Labour Law or the employment contract.
How It Works
- Identify the standard working hours — typically 8 hours per day, 48 hours per week.
- Capture the actual hours worked from the time and attendance system.
- Calculate the hourly rate from the monthly wage.
- Multiply overtime hours by 1.5 of the regular hourly wage.
- Apply the same multiplier for work on weekly rest days and public holidays, subject to the labour law.
Saudi Context
Article 107 of the Saudi Labour Law requires overtime to be paid at 150% of the hourly wage. The Ministry of Human Resources and Social Development and Mudad payroll system enforce documentation requirements. Employers must keep overtime records for inspection.
Example
An employee earns SAR 9,000/month basic — about SAR 50/hour (9,000 ÷ 30 ÷ 6). They work 12 overtime hours. Overtime pay = 12 × 50 × 1.5 = SAR 900 added to the monthly payroll.