End Of Contract Letter Template for Saudi Arabia

When ending an employment relationship in Saudi Arabia, you need a properly structured End Of Contract Letter that complies with Saudi Labor Law. This formal document serves as official notification of contract termination and protects both parties by clearly documenting the conclusion of the employment relationship, final settlements, and ongoing obligations.

When do you need this document?

You must use an End Of Contract Letter when a fixed-term employment contract reaches its natural expiration date, when both parties agree to terminate the contract early, or when ending employment due to specific circumstances outlined in Saudi Labor Law. The document is particularly crucial for expatriate employees whose work visa and residency status depend on their employment contract. You also need this letter when an employee resigns after completing their notice period, when completing probationary periods unsuccessfully, or when restructuring requires position elimination. HR departments use this document to maintain compliance records and facilitate smooth transitions for departing employees.

Key legal considerations

Your End Of Contract Letter must include specific elements to ensure legal compliance under Saudi Labor Law. The document must clearly state the termination date, reference the relevant contract clause or labor law article supporting the termination, and outline the employee's entitlement to end-of-service benefits as calculated under Article 84. You must address the return of company property, including equipment, documents, and access cards, and specify any post-employment obligations such as confidentiality or non-compete clauses. The letter should confirm final settlement amounts, including outstanding salary, unused vacation days, and gratuity payments. For expatriate employees, you must address visa cancellation procedures and timeline requirements to avoid penalties.

Legal requirements in Saudi Arabia

Under Saudi Labor Law (Royal Decree No. M/51), you must provide proper notice as specified in Article 75, typically 60 days for indefinite contracts or 30 days for fixed-term contracts. The letter must comply with Article 74 regarding termination procedures and include accurate calculation of end-of-service benefits per Article 84, which requires half a month's salary for each of the first five years and one month's salary for each subsequent year. Article 88 mandates that you issue a service certificate detailing employment duration, position held, and final salary. The document must be in Arabic or include certified Arabic translation, bear official company letterhead and authorized signatures, and maintain copies for labor office compliance. You must also ensure the letter addresses Wage Protection System requirements and final GOSI contributions, while providing clear timelines for visa processing and departure procedures for expatriate workers.