The Notice Period and Terminating an Employment Contract in the Saudi Labor Law

The notice period in Saudi labor law is no longer equal between the two parties. Royal Decree M/44, in force since 19 February 2025, changed Article 75 from a symmetric rule into an asymmetric one: 30 days on the worker, and 60 on the employer, where the wage is monthly.

This means that every contract or regulation still writing “60 days from either party” loads the worker with a longer obligation than the law imposes today. This guide explains how the contract ends, when the notice period is due and when it is not due at all, what the cash alternative to it is, and what the compensation is when termination occurs without a legitimate reason.

1. How does an employment contract end?

Article 74 enumerates the cases in which the employment relationship ends, and M/44 widened them by two new cases. The cases are:

• Agreement of the two parties, provided that the worker’s consent is in writing.
• Expiry of the specified term in the contract, unless it is expressly renewed.
• The unilateral will of either party in an indefinite-term contract, under Article 75.
• Resignation, a case added by M/44 in clause 3 bis.
• Reaching retirement age under the social insurance law, unless the two parties agree to continue.
• Force majeure.
• Permanent closure of the establishment.
• Termination of the activity in which the worker is employed, unless otherwise agreed.
• A final judicial ruling terminating the contract in bankruptcy proceedings, the second case added by M/44 in clause 7 bis.
• Any other case provided for by another law.

The distinction between these cases is not formal: the notice period, the compensation and the reckoning of entitlements differ by case, which is why your system needs to record the reason the relationship ended and not only its date.

2. The notice period: 30 days or 60?

Article 75 applies to indefinite-term contracts terminated for a legitimate reason, and its periods today run as follows:

• Monthly wage, worker terminating: written notice at least 30 days in advance.
• Monthly wage, employer terminating: written notice at least 60 days in advance.
• Non-monthly wage: at least 30 days from either party.

What exactly changed

Article 75 before the amendment was symmetric: notice of the period agreed in the contract, provided it was not less than 60 days if the wage was monthly, and 30 otherwise, from either party.

The amendment therefore halved the worker’s obligation in the monthly-wage case and left the employer’s obligation as it was. Its practical result is that any contract template still writing “60 days from either party” loads the worker with twice what the law imposes. This is a clause worth reviewing in older contracts.

When no notice period is due at all

A fixed-term contract has no notice period under Article 75, because the article concerns indefinite-term contracts alone. A fixed-term contract ends with the expiry of its term under Article 74. As for terminating it early without a legitimate reason, that does not give rise to a notice period but to the compensation in Article 77, which is an entirely different matter explained in section four.

A conflation occurs here: writing a notice period into a fixed-term contract and then treating it as though it were a statutory obligation. The law does not require it here, and what is written in the contract remains a contractual obligation between the two parties rather than a statutory one.

3. The cash alternative to notice

Whoever terminates an indefinite-term contract without observing the notice period prescribed in Article 75 is bound to pay the other party an amount equal to the worker’s wage for the notice period, unless the two parties agree on more than that. This is the text of Article 76.

Three elements in this article are frequently misread:

• The obligation is mutual: it falls on the worker as it falls on the employer, each according to their own period. A worker who left work without 30 days’ notice is bound by the equivalent of 30, and an employer who terminated without 60 is bound by the equivalent of 60.
• The basis is the worker’s wage in both cases, not each party’s own wage.
• “Unless the two parties agree on more”: the contract may raise the equivalent. It may not lower it below the statutory limit against the worker’s interest, because Article 8 invalidates every condition contravening the law, and likewise invalidates every release or settlement of the worker’s statutory rights occurring during the currency of the contract, unless it is more favourable to them.

4. Compensation for unlawful termination

Article 77 addresses a different case: termination without a legitimate reason, not termination without notice. The compensation in it, unless the contract stipulates its own compensation, runs as follows:

• Indefinite-term contract: the wage for 15 days for each year of the worker’s service.
• Fixed-term contract: the wage for the remaining term of the contract.
• And in both cases, the compensation is not less than two months’ wage.

The compensation is due to the injured party, so it is not an obligation on the employer alone. The two-month limit is a floor and not a ceiling, and it applies even where the proportional calculation comes to less than it.

The difference between Articles 76 and 77 is the difference between two different breaches: the first is a penalty for not observing the period, and the second is compensation for a termination that has no legitimate reason. Either may occur without the other.

5. The worker’s right to look for work during the notice period

If the employer is the one who gave notice, the worker may under Article 78 be absent for a full day in the week or 8 hours during the week to look for other work, while remaining entitled to their wage for the period of absence. They may choose the day or the hours, provided they notify the employer at least one day beforehand.

This right is conditional on the notice having issued from the employer. If the worker is the one who gave notice, the article does not grant them this period.

6. The service certificate and settlement of entitlements

When the relationship ends, two separate obligations fall on the employer: one conditional on the worker’s request, and the other bounded by a defined deadline.

The service certificate (Article 64)

The employer must give the worker, upon their request and without charge, a service certificate stating their date of joining work, the date it ended, their occupation and the last wage they received, and it must not include anything that could damage their reputation or reduce their employment opportunities. The employer must also return to them all the certificates and documents deposited with the employer.

Settlement of entitlements (Article 88)

The deadline is a general rule with one carve-out:

• The general rule: whenever the worker’s service ends, whatever caused it to end, the employer pays the wage and settles the entitlements within one week at most of the date the contractual relationship ends.
• The one carve-out: where the worker is the one who ended the contract, within no more than two weeks.

The employer may deduct any debt owed by the worker that arose because of the work. This deadline is frequently overlooked in practice, and it is a short period that starts from the day the relationship ends, not from the day the clearance is completed.

7. What your system should record

A file that answers termination questions needs dated facts, not a single result:

• The type of contract: fixed-term or indefinite, because it determines whether a notice period is due at all.
• The periodicity of the wage: monthly or non-monthly, because it determines 30 days or 60.
• The terminating party, because the period differs with it, and so do the settlement deadline and the right to look for work.
• The date of the written notice itself, not only the date of the last working day.
• The reason for the ending under the cases in Article 74.
• The job-search days used during the notice period, because they are paid.
• The date the service certificate was handed over and the deposited documents returned.

8. Practical cases

A fixed-term contract terminated early

There is no statutory notice period here. If the termination was without a legitimate reason, what is due is the compensation in Article 77, which is the wage for the remaining term of the contract with a minimum of two months’ wage.

A worker who left work without notice

They are bound by the equivalent of their own notice period under Article 76, that is 30 days if their wage is monthly. That said, Article 81 provides cases in which a worker leaves work without notice while retaining their statutory rights in full, which this guide does not cover.

The employer terminated the contract and asked the worker not to attend

Article 76 ties the cash equivalent to not observing the period. The law at this point does not address relieving the worker of attendance during the period, which is why the documents need to be clear as to whether the period was actually run or substituted by its equivalent.

The wage includes a variable commission

Articles 76 and 77 calculate on “the worker’s wage”, and the law at this point does not detail the wage components that enter into that calculation. Excluding commissions and percentages from the wage by agreement of the two parties appears in Article 86 in respect of the end-of-service award alone, and Article 8 invalidates every condition contravening the law. The particular case is to be referred to the statutory text and the competent authority.

9. A checklist before terminating any contract

• Is the contract fixed-term? If so there is no statutory notice period, and the route is Article 77 rather than Article 75.
• Is the wage monthly? And was the correct period applied: 30 for the worker and 60 for the employer?
• Is the notice in writing and dated?
• If the termination is by agreement of the two parties, is the worker’s consent in writing as Article 74 requires?
• Was the worker granted the paid weekly job-search day whenever the notice came from the employer?
• Will the entitlements be settled within one week for any ending of the worker’s service, and within two weeks where the worker is the one who ended the contract?
• Is the service certificate ready with its four elements whenever the worker requests it, and were the deposited documents returned?
• Does the contract template in use still write “60 days from either party”? If so it loads the worker with more than Article 75 in its current wording requires, and it needs review.

10. Why a mishandled termination turns into a problem

Termination errors do not surface on the day they occur. They surface when a document is asked for: when was the notice given? Who gave it? Was it in writing? Were the entitlements settled within their deadline? At that moment the difference between a file that preserves the facts and a file that preserves the date of the last working day is the difference between an answer and an attempt at recovery.

It grows worse when these facts are managed in scattered files: the notice in an email, the clearance in a spreadsheet, and the job-search days in an attendance record that treats them as absence and deducts them from the salary.

This is where it pays to have an employee’s facts in a single file. That is what Qoyod HR provides: a single employee file holding the contract, the documents and their expiry dates with an alert before them, an attendance record for each employee, and their leave, salary and end-of-service entitlements. End-of-service, overtime and leave-balance calculations are built into the system. It is a standalone HR system with its own subscription, and the link with Qoyod accounting is available now.

For resignation and its own particular rule, see Resignation: Article 79 bis. For dismissal without an award and leaving work without notice, see Articles 80 and 81.

To estimate the entitlements accompanying termination, the end-of-service award calculator will help you, and for more guides and templates browse the HR Resource Centre.

Frequently asked questions

How long is the notice period in the Saudi Labor Law?

In indefinite-term contracts with a monthly wage: at least 30 days if the worker is the terminating party, and at least 60 days if the employer is the terminating party. If the wage is not monthly the period is 30 days from either party. This is the wording of Article 75 after the M/44 amendment.

Is the notice period still 60 days from both parties?

No. Article 75 before the amendment was symmetric and required 60 days from either party if the wage was monthly, whereas the wording in force distinguishes: 30 on the worker and 60 on the employer. Any template still writing the old wording loads the worker with more than the law requires.

Does a fixed-term contract have a notice period?

No. Article 75 concerns indefinite-term contracts alone, and a fixed-term contract ends with the expiry of its term under Article 74. As for terminating it early without a legitimate reason, that gives rise to the compensation in Article 77 rather than to a notice period.

How much is the compensation for termination without a legitimate reason?

Unless the contract stipulates its own compensation: the wage for 15 days for each year of service in an indefinite-term contract, and the wage for the remaining term in a fixed-term contract, and in both cases the compensation is not less than two months’ wage. It is due to the injured party, whoever that is.

When are a worker’s entitlements paid after the contract ends?

Article 88 provides that the employer pays the wage and settles the entitlements within one week at most whenever the worker’s service ends, whatever caused it to end, and within no more than two weeks where the worker is the one who ended the contract. The employer may deduct any debt owed by the worker that arose because of the work.

Is the worker entitled to days to look for work during the notice period?

Yes, if the employer is the one who gave the notice. Article 78 provides that the worker may be absent for a full day in the week or 8 hours during the week with pay, while notifying the employer at least one day beforehand. The article does not grant them this right if they are the one who gave the notice.

Statutory references

This guide rests on the Saudi Labor Law: Article 64 (the service certificate and the return of documents), Article 74 (cases in which the contract ends), Article 75 (the notice period), Article 76 (the cash equivalent of notice), Article 77 (compensation for unlawful termination), Article 78 (looking for work during notice) and Article 88 (deadlines for settling entitlements).

On the effect of the amendments made by Royal Decree M/44 of 1446 AH, in force since 19 February 2025: Articles 74 and 75 were amended by it, and the amendment of Article 75 is the subject of the second section of this guide. As for Articles 64, 76, 77, 78 and 88, this guide has not established an explicit amendment status for them, so it is not sound to assert that they were or were not amended, and reference on that point goes to the updated statutory text.

This guide is a regulatory explanation, not legal advice. In an existing dispute or a particular case, the statutory text and the competent authority remain the reference.