End Of Fixed Term Contract Letter Template for Saudi Arabia

When your fixed-term employment contract in Saudi Arabia approaches its expiration date, you need an End Of Fixed Term Contract Letter to formally document the termination. This official letter serves as legal notification that the employment relationship is ending naturally upon contract completion, rather than through dismissal or resignation. Under Saudi Labor Law, employers must provide proper documentation when fixed-term contracts expire, making this letter essential for legal compliance and protecting both parties' interests.

When do you need this document?

You require an End Of Fixed Term Contract Letter whenever a fixed-term employment contract in Saudi Arabia reaches its predetermined end date. This applies to all types of fixed-term arrangements, including project-based contracts, seasonal employment, and temporary positions with specific duration limits. The letter is particularly crucial for expatriate employees who need official documentation to process visa cancellations, exit re-entry permits, or final exit procedures with Saudi immigration authorities. Companies must also use this document to demonstrate compliance with labor law requirements during Ministry of Labor inspections and to maintain proper employment records for audit purposes.

Key legal considerations

Your End Of Fixed Term Contract Letter must comply with specific provisions under Saudi Labor Law to be legally valid. Article 74 requires clear identification of the contract being terminated, including the original start date and specific end date. The letter must calculate and detail end-of-service benefits according to Article 84, which mandates payment of half a month's salary for each year of service for the first five years, and one month's salary for each subsequent year. You must also address final settlement obligations, including unused annual leave, overtime payments, and any outstanding allowances. The document should specify the employee's clearance procedures and confirm that all company property has been returned before final settlement payment.

Legal requirements in Saudi Arabia

Saudi Labor Law imposes strict documentation requirements for contract termination that your letter must satisfy. Under Article 75, you must provide written notice before the contract's natural expiration, though the specific notice period depends on your contract terms. Ministerial Resolution No. 4786 of 1436 H requires proper documentation procedures, including maintaining copies for labor authority inspection. For expatriate employees, you must coordinate with the Wage Protection System to ensure final salary payments are properly recorded and that no outstanding violations exist. The letter must be prepared in Arabic or include certified Arabic translation for official purposes, and should reference the employee's Iqama number and passport details for immigration processing. Additionally, you must ensure the letter is signed by authorized company representatives and includes the company's commercial registration number and official stamp to validate its authenticity with Saudi authorities.