Saudi Labor Law Article 74: When an Employment Contract Ends
Quick answer: Article 74 lists the cases in which a work contract in Saudi Arabia ends: written agreement, end of a fixed term, notice in an open-ended contract, resignation, retirement age, force majeure, closure of the business, end of the activity, a bankruptcy ruling, and any case set by another law. Resignation and bankruptcy were added by the amendments in force since 19 February 2025.
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The cases in Article 74
- Agreement of both parties to end the contract, as long as the worker agrees in writing.
- End of the term of a fixed-term contract, unless it was renewed under the law.
- The will of one party in an open-ended contract, with notice under Article 75.
- Resignation (added in 2025).
- The worker reaches retirement age under the Social Insurance Law, unless both sides agree to continue.
- Force majeure.
- Final closure of the establishment.
- End of the activity the worker was hired for, unless agreed otherwise.
- A final court ruling ending the contract in bankruptcy proceedings (added in 2025).
- Any other case set by another law.
What you get in each case
| How the contract ended | End of service award |
|---|---|
| Fixed term ended and not renewed | Full award |
| Employer ended it with notice | Full award |
| Employer ended it without a valid reason | Full award + Article 77 compensation |
| Worker resigned | Reduced by service (Article 85) |
| Retirement age, force majeure, closure | Full award |
| Dismissal under Article 80 | No award (Article 80) |
The full award is half a month's wage for each of the first 5 years and a full month for each year after that. See Article 84 for the formula.
Notice in open-ended contracts (Article 75)
- If the worker ends the contract: written notice at least 30 days before.
- If the employer ends it: written notice at least 60 days before.
- The notice must give a legitimate reason. If the notice period is not respected, the other side is owed the wage for the notice period.
Termination by agreement: be careful
Ending the contract by agreement needs the worker's written consent. Read the paper before you sign: it may say you waive compensation, or describe the exit as a resignation, which can reduce your end of service award.
This guide explains the law in plain words and is not legal advice. Check the official text with HRSD for your own case.
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Frequently asked questions
What is Article 74 of the Saudi Labor Law?
It lists the cases in which a work contract ends, such as agreement, end of term, resignation, retirement, force majeure and closure of the business.
What changed in Article 74 in 2025?
Resignation was added as a separate case, and so was a final court ruling ending the contract in bankruptcy proceedings.
Do I get full end of service when my fixed-term contract ends?
Yes. A contract that ends on its date and is not renewed is not a resignation, so the full award applies.
What is the retirement age in Article 74?
The amended article refers to the retirement age in the Social Insurance Law, and both parties can agree to continue working after it.
How much notice must I give to resign?
In an open-ended contract, at least 30 days' written notice from the worker. The employer must give 60 days.
Official sources
This guide explains the general rules. It is not legal advice.