Your final settlement has four parts
| Item | When it applies | Legal basis |
|---|---|---|
| End-of-service award | Always, when the employer ends the contract | Article 84 |
| Compensation for unlawful dismissal | If there was no valid reason | Article 77 |
| Notice pay | If the required notice was not given | Articles 75 and 76 |
| Unused annual leave | If you had leave days left | Article 111 |
These are separate entitlements. Compensation for an unlawful dismissal does not replace or reduce your end-of-service award – you are entitled to both.
1. The end-of-service award
When the employer ends the contract, you receive the full award under Article 84: half a month’s wage for each of the first five years and a full month’s wage for each year after that, with part years in proportion. The resignation reductions in Article 85 do not apply, because you did not resign. The wage used is your last actual wage, including regular allowances such as housing and transport.
Daily wage: SAR 400.00 (monthly ÷ 30)
- 5 yrs × 15 days/yrSAR 30,000.00
- 2 yrs × 30 days/yrSAR 24,000.00
- Estimated entitlementSAR 54,000.00
2. Compensation for unlawful dismissal (Article 77)
If the contract is ended for a reason that is not legitimate, the party harmed is entitled to compensation, unless the contract itself sets a specific amount. Article 77 sets the default:
- Indefinite (open-ended) contract: 15 days’ wage for each year of service.
- Fixed-term contract: the wage for the remaining period of the contract.
- In both cases, the compensation can never be less than two months’ wage.
Example A – indefinite contract, 7 years
Last wage SAR 12,000, so 15 days’ wage is SAR 6,000. Seven years × SAR 6,000 = SAR 42,000. This is more than the two-month minimum (SAR 24,000), so the compensation is SAR 42,000.
Example B – indefinite contract, 1.5 years
Last wage SAR 8,000. Fifteen days’ wage is SAR 4,000, so 1.5 years gives SAR 6,000. That is below the two-month minimum of SAR 16,000 – so the compensation is SAR 16,000.
Example C – fixed-term contract
A two-year contract at SAR 10,000 a month is ended without a valid reason with eight months still to run. The compensation is the wage for the remaining period: 8 × SAR 10,000 = SAR 80,000.
If your contract states its own compensation for early termination, that clause applies instead of the Article 77 formula.
3. Notice pay (Articles 75 and 76)
Since the amendments that came into force on 19 February 2025, the minimum notice for ending an indefinite contract of a monthly-paid worker is 60 days when the employer ends it and 30 days when the worker resigns. Workers who are not paid monthly have a minimum of 30 days. A contract can set a longer period.
If the required notice is not given, the party that ended the contract must pay the other party the wage for the notice period. For a monthly wage of SAR 12,000 and 60 days’ notice, that is SAR 24,000.
4. Unused annual leave
If you leave before using the annual leave you have earned, you are entitled to the wage for those days. With a wage of SAR 12,000, each leave day is worth SAR 400, so 10 unused days are SAR 4,000.
Putting it together
For the worker in Example A – 7 years, last wage SAR 12,000, indefinite contract, dismissed without a valid reason, no notice given, 10 days of leave left:
| Item | Amount |
|---|---|
| End-of-service award (Article 84) | SAR 54,000 |
| Compensation (Article 77) | SAR 42,000 |
| Notice pay – 60 days (Articles 75–76) | SAR 24,000 |
| Unused leave – 10 days | SAR 4,000 |
| Total final settlement | SAR 124,000 |
Checking only the end-of-service award would have missed more than half of what this worker is owed.
When none of this applies
- Dismissal for a reason listed in Article 80 (for example assault, serious misconduct or long unjustified absence), after the procedure the law requires, can remove both the award and the compensation.
- A dismissal for a valid reason that is not covered by Article 80 still gives the full end-of-service award, but no Article 77 compensation.
- If you resigned, Article 85 reductions apply to the award instead – see our guide on resignation vs termination.
Deadlines and next steps
- Ask for the reason for dismissal in writing, and keep your contract, payslips and any notice letter.
- The employer must pay your dues within one week of the end of the contract (Article 88).
- If you believe the dismissal was unlawful or your dues are incomplete, file a complaint through the Ministry of Human Resources and Social Development’s labour dispute services. Do this promptly – labour claims are subject to time limits.
Calculate your Saudi end-of-service award →
Questions
Do I get end-of-service and Article 77 compensation together?
Yes. They are separate entitlements; compensation for unlawful dismissal does not reduce the end-of-service award.
What is the minimum compensation for unfair dismissal in Saudi Arabia?
Two months’ wage, for both indefinite and fixed-term contracts, unless the contract sets its own compensation.
How much notice must a Saudi employer give since 2025?
At least 60 days for a monthly-paid worker on an indefinite contract, or the notice pay instead.