Contract Expired Letter Template for Saudi Arabia

A Contract Expired Letter is a formal document you must issue when a fixed-term employment contract reaches its natural conclusion in Saudi Arabia. This notice serves as official confirmation that the employment relationship will end on the predetermined expiration date, ensuring both employer and employee understand their rights and obligations during the transition period.

When do you need this document?

You need this letter whenever a fixed-term employment contract approaches its expiration date and will not be renewed. This commonly occurs with project-based positions, temporary assignments, or contracts with specific end dates. The letter is particularly important for expatriate employees who require proper documentation for visa cancellation and exit procedures. You should issue this notice at least 30 days before the contract expires to allow sufficient time for clearance procedures, final settlements, and administrative processes required by Saudi authorities.

Key legal considerations

The letter must clearly reference the original contract details, including contract number, start date, and expiration date. You must address end-of-service benefits calculations according to Saudi Labor Law requirements, particularly for employees who have completed one year of service. The document should specify final settlement amounts, including unused annual leave, overtime payments, and any outstanding allowances. For expatriate employees, you must address sponsorship transfer or exit visa procedures. The letter should confirm that both parties fulfilled their contractual obligations and outline the timeline for final clearance procedures.

Legal requirements in Saudi Arabia

Under Royal Decree No. M/51 (Saudi Labor Law), you must comply with specific provisions regarding contract expiration. Article 74 governs the natural expiration of fixed-term contracts and requires proper notification procedures. You must calculate and pay end-of-service benefits according to Article 84, which mandates specific formulas based on the employee's length of service and final salary. The letter must facilitate compliance with Article 88 requirements for issuing service certificates and completing final settlements. For expatriate workers, you must consider Resolution No. 60 regarding end-of-service benefit calculations and ensure compliance with Wage Protection System regulations for final payments. The document must also address Ministry of Human Resources and Social Development requirements for proper contract closure documentation.