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A Fixed Term Agreement is a legally binding employment contract that establishes a working relationship for a predetermined period under Saudi Arabia's employment laws. Unlike indefinite contracts, these agreements specify exact start and end dates, making them ideal for temporary positions, project-based work, or seasonal employment needs.

When do you need this document?

You'll need a Fixed Term Agreement when hiring employees for specific projects with clear timelines, such as construction projects, seasonal retail positions during Ramadan or Hajj periods, or temporary replacements for employees on extended leave. Companies also use these agreements for probationary periods before offering permanent positions, or when engaging specialist consultants for defined deliverables. If you're establishing a new business operation and want to assess staffing needs before committing to permanent hires, fixed term agreements provide the necessary flexibility while maintaining legal compliance.

Key legal considerations

Under Saudi Labor Law, fixed term agreements cannot exceed four years in duration, and you must clearly specify the contract period to avoid automatic conversion to an indefinite contract. The agreement must include mandatory provisions for end of service benefits, which accrue from the first day of employment and must be paid upon contract completion. You're required to provide at least 30 days' written notice before contract expiration if you don't intend to renew, and the employee has the right to equivalent notice if they choose not to continue. Wage Protection System compliance is mandatory, meaning you must register salary payments electronically and maintain timely payment schedules. The contract must also address working hours, leave entitlements, and termination conditions that align with current labor regulations.

Legal requirements in Saudi Arabia

Saudi Arabia's Ministry of Human Resources and Social Development requires all employment contracts to be registered through the Qiwa platform within seven days of execution. Your Fixed Term Agreement must comply with Saudization (Nitaqat) program requirements if applicable to your business size and sector, maintaining required ratios of Saudi to non-Saudi employees. Social insurance contributions are mandatory for all employees, and you must register workers with the General Organization for Social Insurance (GOSI) within 15 days of employment start. The agreement must specify job classifications that align with Saudi Standard Classification of Occupations (SSCO) codes, and include provisions for mandatory medical insurance coverage. All contract terms must be available in Arabic, and if the employee doesn't speak Arabic, you must provide translation in their native language to ensure full understanding of rights and obligations.