Saudi Overtime Calculation: Article 107 + Free Calculator

Put the same salary and the same number of hours into three different Saudi overtime calculators and you will usually get three different numbers. This is not a coding bug. Most of them compress Article 107 of the Saudi Labor Law into "hourly rate × 1.5" — a shortcut that is correct in exactly one situation: when the entire salary is basic pay with no allowances at all.

The Ministry of Human Resources and Social Development states the rule in one sentence: the employer shall pay the worker an additional wage for overtime hours equivalent to the hourly wage plus 50% of his basic wage. Those are two different bases, and almost every English-language guide currently on the first page of Google collapses them into one.

This guide explains the formula as the law writes it, when an hour actually becomes an overtime hour, what the recent amendments changed, and then hands you a free calculator that applies all of it instantly.

When does an hour become overtime? (Article 98)

Article 98 caps actual working hours at 8 hours a day or 48 hours a week. Every actual working hour beyond that limit is paid as an overtime hour. Three cases are routinely missed by manual calculations:

Ramadan: working hours for a Muslim worker drop to 6 hours a day or 36 hours a week. Someone who worked 8 hours during Ramadan has earned two overtime hours — even though that is their ordinary shift for the rest of the year.
Establishments on the weekly standard: if the operation is based on the weekly standard of working hours, hours in excess of that standard count as overtime, even when no single day passed 8 hours.
Public holidays and Eid: all working hours performed on public holidays are overtime hours from the first hour, not from the ninth.

The Article 107 formula: actual wage plus half the basic

Article 107 requires the employer to pay, for each overtime hour, the hourly wage plus 50% of the basic wage. The formula therefore has two components sitting on two different bases:

The hourly wage is derived from the actual wage — basic salary plus fixed recurring allowances such as housing and transport.
The 50% uplift is derived from the basic salary alone.

In the working form generally applied (a 30-day month at 8 hours a day):

Actual hourly wage = monthly actual wage ÷ 240
Basic hourly wage = monthly basic salary ÷ 240
Overtime hourly rate = actual hourly wage + (0.5 × basic hourly wage)

This is where the calculators diverge. Multiplying the whole actual wage by 1.5 overpays. Multiplying the basic alone by 1.5 underpays the worker and opens the establishment to a labor claim. The two formulas only converge when there are no allowances at all.

You will also see guides dividing by 26 working days instead of 30 calendar days, and a few that offer a "+25% or +50%" tier. Article 107 sets one premium, 50%, and the monthly-to-hourly divisor is the one your work regulation actually declares — which is why the daily-versus-weekly field in your registered regulation quietly defines your overtime bill.

Worked examples in riyals

Example 1 — basic salary with no allowances: SAR 6,000, and 10 overtime hours:

Basic hourly wage = 6,000 ÷ 240 = SAR 25
Overtime hourly rate = 25 + 12.5 = SAR 37.5
Due for 10 hours = SAR 375 (this is the only case where the × 1.5 shortcut is correct)

Example 2 — basic 6,000 plus fixed allowances of 2,000, and 10 overtime hours:

Actual hourly wage = 8,000 ÷ 240 = SAR 33.33
Uplift = 0.5 × (6,000 ÷ 240) = SAR 12.5
Overtime hourly rate = SAR 45.83 — due for 10 hours = SAR 458.33
For comparison: the "actual × 1.5" formula gives SAR 500 (an overpayment that is not owed), and the "basic × 1.5" formula gives SAR 375 (short of the statutory entitlement)

Example 3 — an 8-hour shift during Ramadan for a Muslim worker, basic 9,000, no allowances:

The statutory limit in Ramadan is 6 hours, so the seventh and eighth hours are overtime
Overtime hourly rate = 37.5 + 18.75 = SAR 56.25 — due for that single day: SAR 112.5 on top of salary

Example 4 — 8 hours worked on a public holiday, basic 7,500, no allowances:

All eight hours are overtime: 8 × (31.25 + 15.625) = SAR 375 for the day on top of the wage

What the recent amendments changed

The recent amendments to the Labor Law, in force since 1446/1447H (2025), added the flexibility establishments had been asking for: an employer may now, with the consent of the worker, calculate days of compensatory paid leave in lieu of the wage due for overtime hours. Two conditions carry the weight here — the substitution is an agreement, not a unilateral decision, and written documentation is what you rely on in a dispute.

The quantitative ceiling still stands: overtime may not exceed 720 hours a year, and going beyond that requires the worker's consent. That cap sits in Article 22 of the Executive Regulations, not in the statute itself, which is one reason it is so often absent from payroll policy. An establishment that does not track this balance per employee usually discovers the breach at the first complaint, not before it.

Calculate it instantly with the free calculator

Rather than applying the formula by hand for each employee, the free overtime calculator returns the figure directly: enter the basic salary, the allowances and the number of hours, and it separates the base of the hourly wage from the base of the uplift exactly as Article 107 separates them. If you are reviewing broader entitlements, the end-of-service calculator and the annual leave calculator run on the same statutory rules, and the guide to the Saudi labour rights calculator walks through how the articles fit together.

For employers: overtime is a reconciliation line before it is a payroll line

From a compliance angle, overtime is not simply an amount appended to the payslip at month end. Wages disbursed through the Mudad platform are matched against the wage documented in the contract, and any additional disbursement not justified by documented hours data shows up as a variance in the Wage Protection System — exactly as a shortfall does. Establishments that compute overtime in an Excel sheet separate from the attendance system, then key the result manually into payroll, are building a gap between three data sources that are supposed to say the same thing.

The fix is not more spreadsheets. It is one connected chain: the attendance system documents the hours, the statutory formula is applied automatically on its two distinct bases, and the result flows into the payroll file uploaded to Wage Protection. Overtime then becomes an auditable number at any moment rather than a monthly judgement call.

Is overtime in your establishment computed with the statutory formula, or with the shortcut? We review the calculation path with you, from the attendance system through to the Wage Protection file, and identify the variances before they turn into claims. Book a free diagnostic session.