Terminating an Employee in Saudi Arabia: Notice and Article 77

8 min readLast updated 15 November 2026

How an employer ends a contract lawfully: probation, 60 days' notice, Article 77 compensation, Article 80 dismissal, Qiwa, final settlement and fines.

Each route the Saudi Labour Law offers for ending a contract fixes its own notice, compensation and end-of-service award. Choose the wrong route, or skip its procedure, and a dismissal can be found to be a termination "for an illegitimate reason" under Article 77, with compensation to pay.

In short: during probation either party may end the contract, with no compensation or end-of-service award (Articles 53 and 54). An indefinite contract paid monthly needs a legitimate reason and at least 60 days' written notice from the employer; notice not given is owed as the wage for the notice period (Articles 75 and 76). Without a legitimate reason, the employer owes fifteen days' wage per year of service (indefinite) or the wage for the rest of the term (fixed-term), never less than two months' wage, unless the contract fixes the amount (Article 77). Dismissal without notice or award is limited to the nine cases in Article 80. Then record the end on Qiwa and settle within one week.

This guide follows the law as the Ministry of Human Resources and Social Development (MHRSD) publishes it. It is not legal advice; where a dismissal may be disputed, consult a lawyer first. What changed in February 2025 is in our guide to the Labour Law amendments.

The routes at a glance

Route	Article	Notice	End-of-service award	Compensation
Termination during probation	53, 54	None	Not due	None
Agreement of both parties, the employee's consent in writing	74(1)	As agreed	Full	None
Expiry of a fixed term	74(2)	None set by the Law	Full	None
Employer ends an indefinite contract for a legitimate reason	75	60 days (monthly wage) or 30 days	Full	None if notice is given
Termination without a legitimate reason	77	—	Full	Article 77 amount
Dismissal for cause	80	None	Not due	None
Employee leaves under Article 81	81	None	Full (keeps all statutory rights)	Possibly, under Article 77 (our reading)
Resignation	74, 79 bis, 85	30-day acceptance rule	Reduced by length of service	None

Award column: our summary of Articles 54, 80, 81, 84 and 85; see the end-of-service guide.

Termination during probation

Probation must be stated in the contract with its length, up to 180 days in total, and either party may end the contract during it (Article 53); no compensation or end-of-service award is due (Article 54). Two cautions. Article 19 of the 2025 Implementing Regulations leaves the Eid holidays, National Day, Founding Day and sick leave out of the count, so the 180th day falls later than a calendar suggests. And the unified contract in Annex 5 of the Regulations says either party may end it during probation "via the Portal", meaning Qiwa.

Ending an indefinite contract with notice

Article 75 lets either party end an indefinite contract for a legitimate reason with written notice:

Wage paid	Employer gives	Employee gives
Monthly	At least 60 days	At least 30 days
Not monthly	At least 30 days	At least 30 days

The Law does not define "legitimate reason". Our reading is that it should be real, documented and stated in the notice, because a termination found to lack one falls under Article 77 whatever notice was given.

During the employer's notice, the employee may take a paid day a week, or eight hours across the week, to look for work (Article 78). The employer may release the employee from work instead, but service runs to the end of the notice and the wage stays due. Skipping the notice costs the wage for the notice period, unless the parties agreed on more (Article 76). And no one may be dismissed for illness before using up the sick leave the Law gives (Article 82).

Fixed-term contracts and expatriate staff

A non-Saudi's contract must be written and fixed-term (Article 37), so Article 75's notice periods do not reach expatriate staff. On the employer's side, a fixed-term contract ends when its term expires (Article 74(2)), by agreement with the employee's written consent (Article 74(1)), under Article 80, or in the other Article 74 cases such as force majeure or permanent closure. The Law gives no notice route for ending it early, so our reading is that any other early termination risks the Article 77 amount: the wage for the rest of the term. Unless the contract fixes the compensation, a contract with a year to run would cost a year's wage. For a departing expatriate, see the final exit checklist.

Article 77: compensation for termination without a legitimate reason

Unless the contract fixes the compensation for termination by either party for an illegitimate reason, the party harmed is entitled to:

Fifteen days' wage for each year of service, if the contract is indefinite.
The wage for the remaining period of the contract, if it is fixed-term.
In either case, not less than two months' wage.

This is the text as amended by Royal Decree M/46 of 5/6/1436H (2015); the 2025 amendments left it unchanged. Before then, the labour dispute bodies assessed the amount.

Article 80: dismissal without notice, award or compensation

The employer may dismiss without award, notice or compensation only in nine cases, and only after giving the employee the opportunity to state their objections:

Assault on the employer, the responsible manager, a superior or a subordinate, at or because of work.
Failing essential obligations, disobeying lawful orders or deliberately ignoring posted safety instructions, despite a written warning.
Proven misconduct, or an act against honour or trust.
A deliberate act or omission meant to cause material loss, reported to the authorities within 24 hours of the employer learning of it.
Forgery to obtain the job.
Appointment under probation.
Unexcused absence of more than 30 days in a contract year or 15 consecutive days, after a written warning at 20 days (or 10).
Exploiting the position for personal gain.
Disclosing the employer's industrial or commercial secrets.

Dismissal is also a disciplinary penalty (Article 66(6)), so our reading is that the disciplinary rules apply too: no charge for a violation discovered more than 30 days earlier (Article 69); written notice of the charge, questioning and a record on file (Article 71); a written decision, open to an internal grievance within 30 days and then the labour courts (Article 72). Keep the warnings, the report and the objection record: a challenge turns on them.

Article 81: when the employee leaves without notice

The employee may leave without notice, keeping all statutory rights, in seven cases, among them: the employer fails essential contractual or statutory obligations; deceived the employee about the terms when contracting; imposes fundamentally different work; treats the employee cruelly, unjustly or humiliatingly; ignores a known serious hazard; or, by unfair treatment or breach, pushes the employee into appearing to end the contract themselves.

Our reading is that such a departure is not a resignation that reduces the award under Article 85, and that the employee may also seek Article 77 compensation; the labour courts decide that.

Resignation

A resignation is accepted once 30 days pass without a reply; the employer may postpone acceptance by up to 60 days only where the work requires it, with a written, reasoned explanation given within those 30 days; the employee may withdraw within seven days unless already accepted (Article 79 bis; details in the amendments guide). Article 85 then pays one third of the award after two to five years, two thirds after more than five and under ten, and the full award from ten.

Recording the termination on Qiwa

Article 18 of the Implementing Regulations requires employers to document contracts electronically on MHRSD's approved platform, Qiwa. The Annex 5 unified contract adds that notices and acts relating to the contract take legal effect only through the platform's approved services and forms, documented there; mail, email or hand delivery are allowed only where the platform has no service for the act.

Our reading: a letter alone is not enough. Record the termination on Qiwa, with a reason and end date matching the legal route, and keep the letter on file. Since 16 April 2025 an employee can also submit a termination request from Qiwa Individuals, choosing a reason and last working date; MHRSD says the termination conditions must be met. Check that reason against the facts, because the award and the settlement deadline depend on how the contract ended.

Final settlement, end of service and the service certificate

Pay within one week of the end of the contract, or two weeks if the employee ended it; work-related debts may be deducted (Article 88).
The award: half a month's wage for each of the first five years, a month's wage for each later year, on the last wage, part years pro rata (Article 84). The end-of-service calculator applies Articles 84 and 85.
Notice pay and compensation under Articles 76 and 77, where due, come on top.
Service certificate: on request and free, stating start date, end date, profession and last wage, with nothing that harms the employee's prospects; return every document the employee deposited (Article 64).

The fines that apply

MHRSD's Ministerial Resolution 112377 (1447/08/21) sets these per worker, by establishment size:

Row	Violation	Class	20 or fewer	21–49	50 or more
34	Employees' contracts not documented electronically	Serious	SAR 300	SAR 500	SAR 1,000
36	Wage and dues not settled within one week, or two where the worker ended the contract	Not serious	SAR 1,000	SAR 2,000	SAR 3,000
37	No service certificate, or deposited documents not returned	Not serious	SAR 1,000	SAR 2,000	SAR 3,000
39	Wages and dues not paid on time into the approved bank account, or withheld without a court order	Serious	SAR 300	SAR 300	SAR 300

The schedule's general section (rows 1 to 57) has no row for terminating without a legitimate reason; that is a claim the employee brings to the labour courts. The full schedule is in our violations guide.

How SCPL helps employers

SCPL runs HR administration for companies from Dammam and Riyadh. For terminations:

Contracts and employee files drafted to Saudi labour law, authenticated on Qiwa and kept to the standard an inspection expects: HR outsourcing and Qiwa services.
Termination paperwork: notices, warning letters and investigation records drafted to the Labour Law, and the termination recorded on Qiwa.
The leaver sequence: end-of-service, leave encashment and dues calculated to law, then GOSI and insurance removal and exit processing: onboarding and offboarding.

SCPL works on your portals under delegated access you control; who leaves, and why, stays your decision. Contact SCPL to discuss your leavers.

FAQ

What notice must an employer give to terminate an employee in Saudi Arabia?

On an indefinite contract paid monthly, at least 60 days in writing; where the wage is not monthly, at least 30 days (Article 75). Notice not given is paid as the wage for the notice period (Article 76). Fixed-term contracts, which include every non-Saudi's, end on their date.

How is Article 77 compensation calculated?

Fifteen days' wage per year of service for an indefinite contract, or the wage for the remaining term of a fixed-term contract, never less than two months' wage, unless the contract fixes the compensation.

Can an employer dismiss without end-of-service benefits?

Only in the nine cases in Article 80, which include probation, after letting the employee state their objections and with the written warnings some cases require.

Official sources

Verify current requirements directly with the authorities — the Labour Law and its Regulations change, and the official text is always ahead of any guide, including this one.