This paper presents the annotation guidelines of the Balanced Arabic Readability Evaluation Corpus (BAREC), a large-scale resource for fine-grained sentence-level readability assessment in Arabic. BAREC includes 69,441 sentences (1M+ words) labeled across 19 levels, from kindergarten to postgraduate. Based on the Taha/Arabi21 framework, the guidelines were refined through iterative training with native Arabic-speaking educators. We highlight key linguistic, pedagogical, and cognitive factors in determining readability and report high inter-annotator agreement: Quadratic Weighted Kappa 81.8% (substantial/excellent agreement) in the last annotation phase. We also benchmark automatic readability models across multiple classification granularities (19-, 7-, 5-, and 3-level). The corpus and guidelines are publicly available: http://barec.camel-lab.com.