Annual leave is a guaranteed entitlement for every worker covered by the Saudi Labor Law, and it rests on two simple rules: a minimum duration that cannot be contracted away, and a cash payout for accrued days not used when the employment relationship ends. This page covers the statutory duration, when it rises from 21 to 30 days, and how the encashment is calculated in practice — under the Labor Law issued by Royal Decree M/51, as amended by Royal Decree M/44 of 1446H, effective 19 February 2025.

How long is statutory annual leave?

The statutory minimum is 21 paid days per year. The entitlement rises to 30 days once the worker completes five continuous years of service with the same employer.

| Continuous service with the employer | Annual leave entitlement | | --- | --- | | Under five years | No less than 21 days | | Five continuous years or more | 30 days |

These are floors, not ceilings: longer leave granted by the contract or the establishment's work regulations remains valid because it favors the worker, while any agreement below the minimum has no effect.

Two rules often overlooked: advance pay and no waiver

The Law settles two points that frequently go unnoticed:

  • Leave pay is due in advance — the wage for the leave days is paid before the leave starts, not at the usual month-end.
  • The worker may not waive the leave during service — the leave exists for actual rest, and trading it for cash while still employed is not a route the Law recognizes.

Encashment of unused leave when the relationship ends

When the employment relationship ends — by resignation, contract expiry, or otherwise — the worker is entitled to pay for the accrued leave days not used. The payout is normally calculated on the worker's daily wage due, and three elements directly move the figure:

  1. The wage definition used for the calculation.
  2. The employment contract and the allowances it specifies.
  3. The actual payroll records for the final months.

A simple worked example

A worker is entitled to 21 days of annual leave, used only 10, and the employment relationship then ended:

  • Remaining accrued days: 21 − 10 = 11 days.
  • If the daily wage due is 100 riyals, the encashment is 11 × 100 = 1,100 riyals.

The exact figure in any given case depends on the actual daily wage as shown by the contract and payroll. Since leave encashment is normally settled within the same final-entitlements package, the other exit amounts can be reviewed with the end-of-service calculator, alongside the rest of the labor section.

Points to check before signing a final settlement

  • Confirm that the leave balance in the settlement matches actual attendance and leave records.
  • Verify the daily-wage basis used for the encashment against the payroll records.
  • Note that five continuous years of service raise the annual entitlement to 30 days, which changes the day balance for the later years.

When do you need a licensed lawyer?

The information above describes the general rule, but some situations become case-specific and no general article can resolve them, including:

  • A dispute over the actual leave balance between the employer's records and the worker's account.
  • A dispute over the wage definition the encashment is calculated on, especially where variable allowances exist.
  • Leave encashment entangled in a wider dispute over dismissal or final entitlements before the Labor Court.

In those situations the facts of the individual file are decisive, and consulting a licensed lawyer or labor advisor before signing any final settlement allows the file to be assessed on its actual documents. The statutory route for disputes starts with a labor complaint via the Qiwa platform, then the Labor Court if settlement fails.