Annual Leave Rights and Cash Encashment under Article 111 of Saudi Labor Law
Articles 109, 110, and 111 of the Saudi Labor Law govern annual paid leave and accrued vacation compensation:
- Statutory Leave Duration: Employees are entitled to a minimum of 21 paid calendar Days per year, increasing to 30 calendar Days once continuous service reaches 5 Years.
- Article 111 Encashment: Upon contract conclusion or termination, the employee is legally entitled to cash compensation for all unused accrued leave Days, calculated on the basis of the last drawn actual wage (basic salary plus regular allowances).
Frequently Asked Questions
The daily wage is calculated by dividing the final actual monthly wage (including housing and transportation allowances) by 30 Days.
No. Article 111 guarantees that unused leave Days must be compensated in cash upon termination or expiration of the employment contract.