Annual leave balance and pay: 4 steps

Managing annual leave takes four steps: work out what the employee has earned, set the dates and give at least 30 days' notice, pay the leave in advance before it starts, then track carried-over days and settle the balance if the employee leaves. The basis is Article 109 of the Saudi Labor Law: annual leave of no less than 21 days for each year, rising to at least 30 days once the employee has completed five continuous years with the employer, and paid "in advance".

This follows the absence and lateness deductions: that covered what payroll takes off; this covers days the employee is owed.

The four steps

1. Calculate the balance from the start date

Count from the start date, not from January. The entitlement is 21 days a year, becoming 30 days after five years of continuous service as defined in Article 2. To track it month by month, divide the entitlement by 12: 1.75 days per month worked in the first five years, and 2.5 days after. The balance on any day = days earned in past years + the current year's share − days actually taken.

2. Set the dates and give 30 days' notice

Paragraph 2 of the same article lets the employer set leave dates to suit the work, or grant leave in rotation so work keeps running, and requires notifying the employee of the dates at least 30 days ahead. It also says the employee takes the leave in the year it is due, and may not give it up or take cash instead of it while still employed.

3. Pay the leave in advance

In the law, wage means the actual wage: basic pay plus the additions due, such as commission and allowances, set out in the Article 2 definitions, and a month is thirty days unless the contract or regulations say otherwise. So one day of leave pay = actual monthly wage ÷ 30, and leave pay = number of days × daily pay, paid before the first day on its own voucher stating the dates.

4. Track carried-over days and settle on leaving

Article 110 lets the employee carry all or part of the leave into the following year with the employer's agreement, and lets the employer postpone it for work reasons by up to 90 days after the end of the year it was due; anything longer needs the employee's written consent and may not go beyond the end of the following year. If the employee leaves before using the balance, Article 111 entitles them to pay for the days not taken, and to leave pay for part of a year in proportion to the time worked.

A WhatsApp example

A salesperson started on 1 July 2024 with an actual monthly wage of 4,500 riyals, so a day's pay is 150 riyals. They took 21 days for the first year and only 10 for the second year, which ended on 30 June 2026. They ask for 15 days off, and the shop owner writes:

Owner: What is the salesperson's leave balance? They want 15 days from 6 December

System: The balance is 18 days: 11 left from the second year, and 7 for 4 months of the current year. More than 90 days have passed since the end of the second year, so carrying those 11 days needs their written consent, and the last date for them is 30 June 2027. I suggest the leave uses those first, then 4 days from the current year.

Owner: Agreed

System: I sent the date notice today, more than 30 days before the start, asking them to confirm the carried-over days in writing. Leave pay is 2,250 riyals (15 × 150), and the payment voucher is ready to go out before 6 December. 3 days will remain.

More on running staff matters from the same chat in business management over WhatsApp.

Checklist before approving leave

Step	Question	Evidence
Balance	Counted from the start date at the right rate?	A balance sheet by year and days taken
Dates	Was the employee notified 30 days ahead?	A dated written notice
Pay	Calculated on actual wage and paid before the start?	A separate voucher with the leave dates
Carry-over	Postponed more than 90 days?	The employee's written consent