Article 96 of the Saudi Labor Law
المادة 96 من نظام العمل · الباب السادس: شروط العمل وظروفه
Article 96 sets how to calculate the wage of a worker paid by the piece, by output or by commission, using the average actually received over the days actually worked.
Official text (Arabic)
This article has not been amended since the law was issued.
1- إذا كان أجر العامل محددًا على أساس القطعة أو الإنتاج يعتمد متوسط الأجر الذي تقاضاه عن أيام عمله الفعلية في السنة الأخيرة من خدمته، لغرض حساب أي من الحقوق المقررة له بموجب هذا النظام.
2 - إذا كان الأجر كله مبالغ العمولات أو النسب المئوية من المبيعات أو ما أشبه ذلك، مما تكون قابلة بطبيعتها للزيادة أو النقص، يحسب متوسط الأجر اليومي على أساس ما تقاضاه العامل عن أيام العمل الفعلية مقسومًا عليها.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 96 explained in plain English
Many workers do not receive a fixed monthly salary; their wage is set by the number of pieces they produce, or by a percentage of the sales they achieve. When calculating their legal rights (such as the end-of-service award or other rights set out in the Labor Law), a question arises: which wage do we use? Article 96 answers this with two rules:
- Wages by the piece or by output: the average wage the worker received for the days actually worked in the last year of their service is used, and this average is used to calculate any right due to them under the law.
- Wages that are entirely commissions or percentages: if the worker's whole wage consists of amounts of commissions or percentages of sales or the like, which by nature increase and decrease, the average daily wage is calculated by dividing the total the worker received for the days actually worked by the number of those days.
The basic idea in both cases is the same: rely on what the worker actually received, and on the days actually worked alone, so that the average is not affected by days on which the worker did not work at all. This protects the worker from having their rights calculated on a low wage that does not reflect their real income, and gives the employer, at the same time, a clear standard that can be applied.
Relationship of the article to its neighbors: Article 96 complements Article 95, which deals with the case where the wage is not stated at all in the contract or the work organization regulations, and refers to the wage for similar work in the establishment, then the custom of the profession, then the assessment of the Labor Disputes Settlement Authority. Article 96, by contrast, assumes the wage is set but variable by nature, and sets out the method for reaching its average. It is followed by Article 97, which requires the employer to continue paying 50% of the wage when a worker is detained in cases connected with the work, which also requires knowing the value of the wage used.
Because calculating the average may raise disputes over records and the number of days actually worked, the worker is advised to keep evidence of what they received, and to consult a labor lawyer if there is a dispute.
Practical example
Fahad works as a sales representative for a company in Jeddah, and his entire wage is a percentage of the sales he achieves, which rises in some months and falls in others. When his service ended, the company needed to determine his wage in order to calculate his rights. Under paragraph 2 of Article 96, the company added up everything Fahad received for the days he actually worked and divided it by the number of those days, arriving at an average daily wage that it adopted as the basis for calculating his dues, without looking at the highest or lowest months individually.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Active contributorFrequently asked questions about Article 96 of the Saudi Labor Law
How is a piecework worker's wage calculated for the end-of-service award?
Under paragraph 1 of Article 96, the average wage the worker received for the days actually worked in the last year of their service is used, and this average is used to calculate any right due to them under the Labor Law.
Are days of absence or stoppage counted in the average?
In both cases the text relies only on days actually worked; for commission-based pay, the total the worker received is divided by the number of those days actually worked.
What is the difference between Article 95 and Article 96?
Article 95 deals with the case where the wage is not stated at all in the contract or the regulations, and refers to the wage for similar work, then custom, then the assessment of the Labor Disputes Settlement Authority. Article 96 deals with a wage that is set but variable (piece, output or commission) and explains how its average is calculated.
What if the wage is a mix of a fixed salary and commission?
Paragraph 2 of Article 96 speaks expressly about the case where the wage is entirely commissions or percentages, and the text does not expressly address a mixed wage, so it is advisable to consult a labor lawyer if there is a dispute.
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The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.