When someone gets a job in Saudi Arabia, they usually sign something called an employment contract. This is a legal paper that explains everything about the job—like how much they’ll be paid, what kind of work they’ll do, how long the job will last, and what rules they have to follow.

But did you know there are two main types of employment contracts in Saudi Arabia?

They are:

• Fixed-term contracts
• Non-fixed (or indefinite) contracts

If those names sound a little confusing, don’t worry! In this blog post, we’ll explain each one clearly and simply so you can understand what they mean, how they’re different, and which one might be better for certain situations.

What Is an Employment Contract?

Let’s start with the basics. An employment contract is like a written promise between a worker and an employer. It says:

• What kind of work the person will do
• How much they will be paid
• When the job starts
• What time they should work (like from 9 to 5)
• If there are any days off
• How long the job will last
• What happens if one side wants to stop the contract

This contract protects both the worker and the employer. It makes sure everyone is clear on what to expect. Now let’s look at the two main types.

What Is a Fixed-Term Contract?

A fixed-term contract is a job contract that has a clear start date and end date. It tells you exactly how long the job will last.

Example:

Let’s say you sign a contract that says your job will be from January 1, 2025 to December 31, 2025. That’s a fixed-term contract because it ends after one year.

Key Features of Fixed-Term Contracts:

• The end date is already written in the contract
• The contract ends automatically unless both sides want to renew it
• It’s often used for project-based jobs, temporary positions, or seasonal work
• Employers can renew it, but after 3 renewals or 4 years, it becomes a non-fixed contract by law (according to Saudi Labor Law)

Pros of Fixed Contracts:

• Good for short-term projects
• Helps companies hire staff for a specific time only
• Clear start and end dates

Cons of Fixed Contracts:

• Less job security for workers
• Can end even if the worker wants to stay
• Might not offer the same long-term benefits

What Is a Non-Fixed (Indefinite) Contract?

A non-fixed contract is a job contract that does not have an end date. It continues until someone decides to end it—either the employer or the worker.

Example:

You get hired with a contract that just says “Start Date: March 1, 2025,” but there’s no end date. That means you’ll work as long as both sides are happy.

Key Features of Non-Fixed Contracts:

• No set end date
• The job continues until someone gives notice (usually in writing)
• Common for long-term or permanent jobs
• Either side can end it, but they must follow notice rules under Saudi Labor Law

Pros of Non-Fixed Contracts:

• More job security
• Often comes with better benefits (like bonuses, paid leave, etc.)
• Builds long-term trust between worker and employer

Cons of Non-Fixed Contracts:

• Harder for employers to end the contract quickly
• Workers might feel “stuck” if they want to leave suddenly
• May require formal termination notice and sometimes end-of-service benefits

How Do You Know Which Contract You Have?

It’s simple! Just look at your job contract:

• If there is a clear end date, it’s a fixed contract
• If there is no end date, it’s a non-fixed contract

Also, your employer (or HR department) should tell you which type it is when you sign the contract.

What Happens When a Contract Ends?

For Fixed-Term Contracts:

• The contract ends automatically on the end date
• If the company wants to keep the worker, they must renew the contract
• If not, the worker moves on and the employer does not need to renew

For Non-Fixed Contracts:

• Either side can end the contract with written notice (usually 30–60 days)
• The employer must have a valid reason, especially if they’re the one ending it
• The worker may receive end-of-service benefits based on how long they worked

What Does Saudi Labor Law Say?

Saudi Arabia’s Labor Law protects both employers and employees. Here are some important points:

1. Maximum Contract Renewals: If a fixed-term contract is renewed 3 times, or if the employee works for more than 4 years on the same contract, it becomes a non-fixed contract.

2. Termination Rules:

• Employers must give a valid reason to terminate a non-fixed contract
• Workers must give proper notice if they want to leave early
• In some cases, end-of-service pay is required

3. Probation Periods: Most contracts start with a probation period (usually 90 days). During this time, the contract can be ended with less notice.

Which One Should You Choose?

It depends on your needs and your job.

If you’re a worker, ask yourself:

• Do I want something permanent?
• Am I okay if the job ends after a few months?

If you’re an employer, ask:

• Do I need someone just for a project or season?
• Do I plan to keep this employee for a long time?

Final Thoughts

Understanding the difference between fixed and non-fixed contracts in Saudi Arabia is very important. It helps both workers and employers avoid confusion or legal trouble.

Before signing anything, always read your contract carefully. If you’re not sure, ask someone you trust or a legal advisor to explain it to you. Your contract is more than just paper—it’s your guide to your job, your rights, and your future.

Bonus Tip:
Keep a copy of your signed contract in a safe place. You might need it later!

Whether you’re a Saudi business owner looking for manpower supply or a job seeker looking for an exciting job opportunity in the kingdom, get in touch with the Yaqoot Manpower Services in Saudi Arabia to get your job done the hassle-free way.