Article 74 Saudi Labor Law: Every Ending Case After 2025

By Legal Consultant Mostafa Diab
Published: November 9, 2026
Last updated: November 9, 2026

What does Article 74 of the Saudi Labor Law say about how an employment contract ends?

Article 74 Saudi Labor Law lists every legal way an employment contract ends. Since the amendments that took effect on 19 February 2025, it has eight main cases plus two added ones: resignation (case 3 bis) and a final bankruptcy court decision (case 7 bis).

The article does not set any money itself. The reason the contract ended decides whether you receive the full end-of-service award, a reduced award, compensation, notice pay or nothing.

This guide explains each case, what it means for your end-of-service benefits, the Qiwa steps for ending a contract, and how to write a non-renewal letter for a fixed-term contract.

You can book a consultation on WhatsApp with the team at Al-Safwa Law Firm for Advocacy and Legal Consultations to review your documents and explain your legal options clearly.

Table of Contents

Article 74 Saudi Labor Law at a glance

Article 74 is the Labor Law provision that lists the cases in which an employment contract ends: written mutual agreement, expiry of a fixed term, notice under Article 75, resignation, retirement age, force majeure, permanent closure, end of the activity, a bankruptcy court decision, and any case set by another law. Each case carries different end-of-service rights.

Two cases were added in 2025: resignation (3 bis) and the end of a contract through bankruptcy proceedings (7 bis).
Resignation now has its own procedure: under Article 79 bis it is treated as accepted after 30 days without a reply.
Money depends on the reason: Article 84 sets the full award, Article 85 reduces it for resignation, and Articles 76 and 77 add notice pay or compensation where they apply.
Some endings sit outside Article 74: probation (Article 54), dismissal without award (Article 80), leaving without notice (Article 81), and death or inability to work (Article 79).

Text of Article 74 after the 2025 amendment

This is the official English wording published by the Ministry of Human Resources and Social Development (HRSD) on its Labor Relations page (Articles 50–88). The binding text is the Arabic Labor Law (Royal Decree No. M/51) on the Bureau of Experts at the Council of Ministers portal.

The employment contract shall terminate in any of the following cases:

If both parties agree to terminate it, provided that the employee’s consent is in writing.
If the specified term of the contract expires, unless the contract has been explicitly renewed in accordance with the provisions of this Law, in which case it shall continue until its term.
Based on the will of one of the parties in contracts of indefinite duration, in accordance with Article 75 of this Law.
3 (bis): Resignation.
Upon the employee reaching the retirement age as stipulated by the Social Insurance Law, unless both parties agree to continue employment beyond this age.
Force majeure.
Permanent closure of the establishment.
Termination of the activity in which the worker is employed, unless otherwise agreed.
7 (bis): Issuance of a final resolution or ruling by the competent court to terminate the employee’s contract in any of the bankruptcy proceedings initiated under the Bankruptcy Law.
Any other situation specified by another regulation.

What changed in Article 74 in 2025?

HRSD’s before-and-after summary of the amended articles shows that the 2025 amendment added two new paragraphs and left the wording of the others unchanged. HRSD announced that the amendments apply from 19 February 2025. Anyone reading Article 74 of the Saudi Labor Law today should use the post-2025 wording, not older summaries.

Paragraph	Change	Practical effect
3 bis: Resignation	New	Resignation is a separate ending with fixed steps in Article 79 bis: 30 days, a possible delay of up to 60 days, and 7 days to withdraw.
7 bis: Bankruptcy	New	A contract ends through bankruptcy only when the competent court issues a final decision or ruling to end it.
1: Mutual agreement	Wording unchanged	The employee’s consent must be in writing. A verbal agreement is not enough.
4: Retirement age	Wording unchanged	The age follows the Social Insurance Law administered by GOSI, not a number in the Labor Law.

The articles around Article 74 changed more. Article 75 now requires written notice of 30 days from the employee and 60 days from the employer in monthly-paid indefinite contracts. The new Article 79 bis sets out how resignation works.

Every ending case and your end-of-service benefits

The table below shows the usual result for each case under Saudi Labor Law Article 74 and the related articles, based on the amended text on HRSD’s Labor Relations page. The facts of the file and the contract wording can change the outcome, and disputes are decided by the Labor Court. Article 74 of the Saudi Labor Law lists the ways a contract ends, and each way carries its own end-of-service consequence.

How the contract ended	Legal basis	End-of-service award	Compensation or notice pay
Written mutual agreement	Art. 74(1)	Usually full (Art. 84), unless the agreement is really the employee’s resignation	Whatever the agreement says
Expiry of a fixed-term contract	Art. 74(2), Art. 55	Full (Art. 84)	None as a rule
Employer ends an indefinite contract for a legitimate reason with notice	Art. 74(3), Art. 75	Full (Art. 84)	Wage for the notice period if notice was not given (Art. 76)
Employer ends the contract without a legitimate reason	Art. 77	Full (Art. 84)	Art. 77 compensation, at least two months’ wage
Resignation	Art. 74(3 bis), Art. 79 bis	Reduced scale (Art. 85), full after 10 years	None as a rule
Retirement age	Art. 74(4)	Full (Art. 84)	None
Force majeure, permanent closure, end of the activity	Art. 74(5), (6), (7)	Usually full; Art. 87 gives the full award where the employee leaves due to force majeure	Depends on the facts
Bankruptcy court decision	Art. 74(7 bis)	Claimed within the bankruptcy proceedings	Claimed within the bankruptcy proceedings
Termination during probation	Arts. 53 and 54	None for that period	None
Dismissal for a listed serious breach	Art. 80	None	None, and no notice
Employee leaves without notice for employer breach	Art. 81	All statutory rights kept	Can be claimed in court

Mutual agreement needs the employee’s written consent

An agreement to end the contract only counts under paragraph 1 if the employee agrees in writing. A final settlement or clearance form is a different document. It proves that money was received and does not by itself show that the employee agreed to end the contract. Read any settlement form closely before you sign, because some contain a broad waiver that can block later claims.

Expiry of a fixed-term contract

A fixed-term contract ends on its end date, and that is a lawful ending, not a dismissal. The end-of-service award is calculated in full under Article 84. If the employer ends the contract before the end date without a legitimate reason, Article 77 gives the employee the wage for the remaining term. The non-renewal section below covers this case in detail.

Ending an indefinite contract under Article 75

Either party can end an indefinite contract for a legitimate reason with written notice. The notice is 30 days from the employee and 60 days from the employer when the wage is paid monthly, and 30 days for both when it is not. A party that skips the notice owes the wage for the notice period under Article 76. A reason that is not legitimate brings in Article 77 compensation.

Resignation under paragraph 3 bis and Article 79 bis

Resignation is now separate from termination under Article 75. Article 79 bis sets these rules:

A written resignation is treated as accepted if the employer does not reply within 30 days.
The employer may delay acceptance for up to 60 days if the work requires it. It must explain this in writing before the 30 days end, and the delay runs from that written explanation.
The employee may withdraw the resignation within 7 days of submitting it, unless the employer has already accepted it.
The resignation request may not name a deferred future date.
The contract stays in force during this period, so both sides must keep working and paying as normal.

The resigning employee keeps all rights under the Labor Law, but the end-of-service award follows the Article 85 scale shown below.

Retirement age

The contract ends when the employee reaches the retirement age set by the Social Insurance Law, unless both parties agree to continue. Check your retirement age on your GOSI record rather than relying on the old figures of 60 and 55 that circulate online. If you continue working past that age, record the agreement in writing and keep the Qiwa contract up to date.

Force majeure, permanent closure and end of the activity

These three cases end the contract for reasons outside the employment relationship itself. The text speaks of permanent closure of the establishment and of ending the activity the employee works in. Closing one branch may fall under ending the activity depending on the facts and the contract. Ask in writing whether a transfer to another branch is possible before you accept that the contract has ended.

Bankruptcy under paragraph 7 bis

Financial trouble at the employer does not end the contract on its own. Under paragraph 7 bis the contract ends when the competent court issues a final decision or ruling ending it in bankruptcy proceedings under the Bankruptcy Law. The employee’s entitlements are then claimed within those proceedings.

How the end-of-service award is calculated

Article 84 sets the full award: half a month’s wage for each of the first five years and one month’s wage for each later year, based on the last wage, with part years paid pro rata. Article 85 reduces the award only when the contract ends by resignation:

Continuous service at resignation	Share of the full award
Less than 2 years	None
2 to 5 years	One third
More than 5 and less than 10 years	Two thirds
10 years or more	Full award

Worked example: an employee has 7 years of service and a last wage of SAR 9,000.

Full award (contract expiry, retirement, or termination by the employer): 5 × 4,500 + 2 × 9,000 = SAR 40,500.
Resignation after 7 years (two thirds): SAR 27,000.
Resignation after 4 years on the same wage: full award 4 × 4,500 = 18,000, one third = SAR 6,000.

Article 87 keeps the full award in two resignation cases: when the employee leaves because of force majeure, and when a female employee ends the contract within six months of her marriage contract or within three months of giving birth. Under Article 88, the employer must settle all entitlements within one week of the end of the contract, or within two weeks if the employee ended it.

Non-renewal letter for a fixed-term contract

A non-renewal letter tells the other party that you will not continue a fixed-term contract after its end date. It relies on paragraph 2 of Article 74. It does not end the contract early, so the timing and wording matter.

When a fixed-term contract ends or renews

Article 55 says a fixed-term contract ends when its term expires. Three rules on HRSD’s Labor Relations page decide what happens next:

Both sides keep working after the end date: the contract is treated as renewed for an indefinite period, subject to Article 37 for non-Saudis.
The contract has a renewal clause: it renews for the agreed period. After three consecutive renewals, or four years in total including the original term (whichever comes first), continued work turns it into an indefinite contract.
Service stays continuous: under Article 56, a renewal period counts as an extension of the original term for rights based on length of service, including the end-of-service award.

For non-Saudi employees, Article 37 on HRSD’s Employment of Non-Saudis page requires a written, fixed-term contract. If no term is stated, the contract runs for one year from the start of work. If work continues after that, it is treated as renewed for a similar period.

Is there a fixed notice period for non-renewal?

The Labor Law sets no single notice period for not renewing a fixed-term contract. The contract decides it: look for an automatic renewal clause and any deadline or method for giving notice of non-renewal. The 30-day and 60-day periods in Article 75 apply to ending indefinite contracts. They should not be applied to every fixed-term contract by default. If the contract renews automatically and nobody gives notice in time, it may renew for another term.

Non-renewal or unfair dismissal?

Point	Non-renewal	Early termination without a legitimate reason
Timing	Takes effect on the contract end date	Before the end date
Legal basis	Article 74(2) and the contract’s renewal clause	Breach of the termination rules, compensation under Article 77
Money	Full end-of-service award, no compensation if done properly	Full award plus the wage for the remaining term, at least two months’ wage

A dispute usually starts when the non-renewal looks like cover for something else. Examples include a contract ended early and then labelled non-renewal, notice sent after the deadline in the contract, or an employee kept on after the end date and then let go as if the contract had simply expired.

What to include in the letter

The date of the letter and the names of both parties (employer name, employee name, job title).
The contract start date, the current term and its end date, taken from the Qiwa contract.
A clear sentence that you do not wish to renew the contract after its end date.
A reference to the notice clause in the contract, if there is one, and confirmation that the letter is sent within that period.
For the employer: a statement that end-of-service and other entitlements will be settled on time.
Name, capacity and signature.

Sample wording from an employee:

Further to my fixed-term employment contract dated [date], which ends on [date], I hereby notify you that I do not wish to renew the contract after its end date. This notice is given in accordance with the Labor Law and within the notice period in the contract, if any.

Sample wording from an employer:

With reference to your fixed-term employment contract dated [date], ending on [date], we notify you that the company does not wish to renew the contract after its end date. The contract will end on that date without early termination, and your statutory entitlements will be settled in accordance with the Labor Law.

These samples suit simple cases. If the contract has an automatic renewal clause or a set notice period, the letter should be drafted around that clause. Our legal notice drafting team can prepare a letter that fits your contract.

How to deliver it and keep proof

Check the end date and the renewal and notice clauses in the contract and any annex or earlier extension.
Send the letter in writing before the deadline in the contract.
Use a method that proves delivery and the date: a signed copy marked as received, hand delivery with a signature, or the official email the parties use.
Keep a copy of the letter and the proof of delivery.
Prepare the final settlement: unpaid wages, cash for unused annual leave (Article 111), the end-of-service award, and a service certificate on request (Article 64).

How to end an employment contract on Qiwa

HRSD’s Termination of Contractual Relationship service lets the employee end a contract electronically through Qiwa, free of charge, without visiting the employer.

Steps for the employee (Qiwa Individuals)

Log in to your Qiwa Individuals account.
Go to Services and select Employment Contracts.
Select the contract and click Terminate Contract.
Choose the reason for termination.
Enter the last working date.
Review the details and click Submit Termination Request.

Steps for the employer (Contract Management)

HRSD’s Terminate an Employment Contract user guide (August 2026) sets out the employer route: Services, then Contract Management, then All Contracts. Next, open the actions menu next to the contract, choose View details and then Terminate contract. Select the employee and the reason, go to the summary, accept the terms and submit the request.

The same guide sets four conditions. The contract must be active. For a non-Saudi worker, the work permit must be valid for at least 60 days. The notice period must be observed where the chosen reason requires it. There must be no other termination request pending on the same contract. The service records the reason and the effective date and updates the contract status across the linked government systems.

Practical point: the reason you choose on Qiwa should match the real Article 74 case. A resignation recorded as termination by the employer, or the reverse, is a common source of end-of-service disputes.

Common mistakes when a contract ends

Mixing up resignation and termination: resignation follows Article 79 bis, while ending an indefinite contract follows Article 75. The rules and the award differ.
Agreeing verbally: mutual termination needs the employee’s written consent.
Leaving work the day you resign: the contract continues during the resignation period, and stopping work can lead to claims against you.
Delaying acceptance without a written reason: an employer delay that is not explained in writing within the first 30 days does not meet Article 79 bis.
Not keeping the submission date: every period runs from the date the resignation or notice was submitted.
Sending non-renewal notice late: a late notice under an automatic renewal clause can renew the contract.

How to claim your rights after the contract ends

A labor claim starts with HRSD’s Friendly Settlement for Labor Disputes service. HRSD lists it as free, and the complaint must be filed within 12 months. If the parties do not settle, the case is referred to the Labor Court within 21 working days of the first filing, and court hearings can be attended in person or remotely through Najiz. Whichever route you take, base your claim on Article 74 of the Saudi Labor Law and the case that actually applies to you.

Prepare the Qiwa contract, the resignation, notice or non-renewal letter with proof of delivery, payslips and your GOSI record. Our labor case lawyer and labor office lawyer teams can review the file and calculate your entitlements before the settlement stage.

Frequently Asked Questions about Article 74 of Saudi Labor Law

Article 74 Saudi Labor Law answers one question: why did the contract end? Get the case right first, then check the matching article for the money: Article 84 or 85 for the award, Article 76 for notice pay and Article 77 for compensation. Make sure the reason recorded on Qiwa matches what really happened.

If you are about to resign, send a non-renewal letter, or you have received a termination notice, have the contract and the dates checked first, especially the renewal clause and the notice period.

To get a legal consultation from our team, contact us via the WhatsApp button at the bottom of the screen.

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