End a role in Saudi Arabia, the right way.
Answer a few questions and the toolkit builds your evidence pack — a valid reason, the 60-day notice and the full end-of-service award. On an employer termination the whole award is due, and Saudization shapes who you can let go.
Saudi Arabia — the Labor Law (Royal Decree M/51): a valid reason, 60 days’ notice and the Art. 84 end-of-service award (15/30 days per year, full on employer termination). Nitaqat restricts letting Saudi nationals go. No income tax.
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Ending a role & end-of-service, done right — for Saudi employers
Saudi Arabia has no separate redundancy statute: a role is ended on a valid reason with notice under the Labor Law (Royal Decree M/51), and the employee is owed the end-of-service award under Art. 84. On an employer termination the FULL award is due. This free AI toolkit walks you through a valid termination, calculates the award and builds the evidence pack.
The process, step by step
- Valid reason — record a valid reason for the termination; the Labor Law requires a lawful ground for ending any indefinite contract.
- Notice — give 60 days’ written notice for a monthly-paid employee (30 days otherwise), or pay in lieu.
- End-of-service award — calculate the Art. 84 award on the last wage: 15 days per year for the first five years, 30 days per year thereafter; on employer termination the full award is due.
- Check Saudization — Nitaqat rules restrict terminating Saudi nationals, and large layoffs draw HRSD scrutiny.
- Final pay — settle the award, any pay in lieu of notice, accrued leave and outstanding wages.
End-of-service award
The end-of-service award (مكافأة نهاية الخدمة, Art. 84) is calculated on the last wage at a graduated rate:
| First 5 years of service | 15 days’ wage per year |
| Each year beyond 5 years | 30 days’ wage per year |
Calculated on the last wage, pro-rata for part-years. On employer termination (including a role made surplus) the FULL award is due — the Art. 85 reductions (nil under 2 years, one-third at 2–5 years, two-thirds at 5–10 years) apply only to resignation.
Notice periods
| Paid monthly (indefinite term) | 60 days’ written notice |
| Paid otherwise | 30 days’ written notice |
Labor Law Art. 75 — notice may be paid in lieu. A valid reason must be given for any termination.
Invalid dismissal & Saudization
Saudi Arabia requires no committee pre-authorisation to reduce headcount, but a termination for an invalid reason triggers Art. 77 compensation — for an indefinite contract, 15 days’ wages per year of service, with a minimum of two months’ wages (a fixed-term contract pays the wages for the remaining period). Saudization (Nitaqat) restricts terminating Saudi nationals, and the Ministry scrutinises large layoffs.
Common questions
How much end-of-service award is due?
On the last wage: 15 days’ pay for each of the first five years of service and 30 days’ pay for each year after that. On an employer termination the full award is paid — the reductions that cut the award apply only when the employee resigns.
Does resigning change the award?
Yes. The Art. 85 reductions apply only to resignation: nothing under two years, one-third from two to five years, two-thirds from five to ten, and the full award at ten years or more. On employer termination the full award is always due.
What if the reason is invalid?
An invalid-reason dismissal triggers Art. 77 compensation — for an indefinite contract, 15 days’ wages per year of service with a minimum of two months’ wages.
Is the award taxed?
No. Saudi Arabia levies no personal income tax, so the end-of-service award is paid untaxed.
Reference: Labor Law (Royal Decree M/51), arts. 75, 77, 84 & 85; hrsd.gov.sa. General information for employers, not legal advice.