Labor lawyer in Riyadh and Tabuk – Usus Law Firm

You want to leave your job, or your employer wants to end your contract: what should you know before taking the step? Ending an employment contract in Saudi Arabia can happen in several ways, and each one affects the end-of-service award, compensation and the notice period. The rules also differ a great deal between a fixed-term contract and an indefinite (open-ended) contract. Here we bring together the common ways a contract ends, what follows from each, and links to the detailed explanations.

Ways an employment contract ends, and their effect

How it endsEnd-of-service awardCompensation
A fixed-term contract reaches its end dateFullNo compensation, as a rule
Mutual agreementAs agreed and as the law providesAs agreed. See the mutual termination template
Worker resigns from an indefinite contractDepends on length of service (Article 85)None if notice was given
Worker resigns from a fixed-term contract before it endsDepends on length of serviceThe employer may claim compensation. Read Article 77
Employer ends the contract without a legitimate reasonFullArticle 77 compensation
Dismissal for one of the reasons in Article 80May be lostNone. Read Article 80
Worker leaves because the employer breached its obligationsFullMay be owed compensation. Read Article 81

The notice period

In an indefinite contract, the party who wants to end it must notify the other party in writing before termination, by a period set by the law and the contract, and recent amendments to the Labour Law changed these periods. If the terminating party does not observe the notice period, it must pay the other party the equivalent of the wage for the notice period or whatever remains of it. The current periods, after the 2025 amendments, are explained in Article 75 of the Labor Law.

What is the penalty for breaking an employment contract?

Saudi law does not punish an employee for leaving a job, and no one can be forced to keep working. The consequence of ending a contract the wrong way is financial, and it depends on who ended it and how:

What happenedThe usual consequence
Either party ends an indefinite contract without serving the notice periodPays the other the wage for the notice period, or whatever remains of it
The employer ends the contract without a legitimate reasonOwes the worker compensation under Article 77, on top of the end-of-service award
The worker leaves a fixed-term contract early without a legitimate reasonThe employer may claim compensation under Article 77, and the end-of-service award follows the resignation rules
The worker leaves because the employer breached the contractNo penalty for the worker, who may claim full rights. Read Article 81
Dismissal for serious misconduct listed in Article 80No compensation, and the award may be lost. Read Article 80

The contract itself may set a different compensation amount, within what the law allows. Before signing a settlement, estimate your position with the end-of-service calculator.

How to resign properly

  1. Read your contract: is it fixed-term or not? What notice period does it set?
  2. Submit your resignation in writing and keep proof of the date it was delivered.
  3. Serve the notice period, or agree in writing to be released from it.
  4. Calculate your dues with the end-of-service calculator, and do not sign a final settlement (clearance) before you receive them.
  5. Ask for a service certificate and, if you are an expatriate, follow up the transfer of services or exit procedures. Read about the sponsorship (kafala) system.

Frequently asked questions

Can my employer refuse my resignation?

In an indefinite contract, the worker may end it by giving notice. In a fixed-term contract, leaving before it ends without a legitimate reason may make the worker liable to compensate the employer, but the worker cannot be forced to stay.

Does resigning cancel my right to the end-of-service award?

Not entirely, as a rule: after two years you are entitled to one third of it, after five years two thirds, and after ten years the full award. Read Article 84.

Thinking of resigning, or has your contract been ended?

The team at Usus Law Firm reviews your position before you take any step, as part of its labour cases practice, in Riyadh and Tabuk, and advises in English.

This article is general legal information and is not a substitute for advice on your specific case. Court proceedings in Saudi Arabia are in Arabic; the official Arabic text of each law prevails.

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