Article 76 of Saudi Labor Law

Last updated and official-source review: 7 November 2026.

Article 76 of Saudi Labor Law requires a party who terminates an indefinite-term employment contract without observing the required notice period to pay the other party an amount equivalent to the employee’s wage for that period, unless a higher amount has been agreed. For monthly-paid employees, the statutory notice period is 30 days when the employee terminates and 60 days when the employer terminates. Before multiplying your salary by two, establish your contract type, who ended the relationship and which wage figure applies.

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What does Article 76 of Saudi Labor Law say?

MHRSD publishes Article 76 within its provisions on the termination of employment contracts. A plain-English rendering of the Arabic provision is:

If the party terminating an indefinite-term contract does not observe the notice period specified under Article 75 of this Law, that party must pay the other party an amount equal to the employee’s wage for the notice period, unless the parties agree to a higher amount.

This is a payment for failure to observe notice, rather than a government fine. The obligation applies to both parties: an employer may owe it to an employee, and an employee may owe it to an employer. Paying it does not determine whether the reason for termination was lawful or resolve other entitlements arising from the end of employment.

When does Article 76 apply, and who pays?

Check four points before applying Article 76: the employment relationship must fall under the Labor Law; the contract must be indefinite-term; one party must have terminated it; and a required notice period must not have been observed. You must also rule out circumstances in which the law permits termination without notice.

• If the employer terminates: the employee’s entitlement to notice pay is assessed against the required notice period, the wage-payment basis and the circumstances of termination.
• If the employee terminates: the employer’s entitlement may arise when the employee leaves without giving the required notice. Any agreement to end the relationship, or statutory ground for leaving without notice, must also be examined.

Labels such as “resignation” or “dismissal” are not enough on their own. The contract type, facts and documents determine the position. If the paper contract differs from the documented version, start by checking the contractual terms and the authoritative versions before calculating a claim.

What notice periods apply under the amended Article 75?

Article 75 in its current form, as published by MHRSD, distinguishes between who terminates the contract and how the employee’s wage is paid. The following periods apply to an indefinite-term contract terminated for a lawful reason:

These periods reflect the amendments effective from 19 February 2025. A 30-day requirement for a monthly-paid employee does not mean that the employer has the same notice period. If you are reviewing a termination that predates the amendments, check the rule that applied at the time.

Record the date of the notice, when it was received and the intended termination date. A dated letter alone does not establish that the other party was notified in time. Review any contractual clause providing for longer notice, without assuming that it is either invalid or enforceable against both parties before checking its wording and compatibility with the law.

How is Article 76 notice pay calculated?

Where no notice has been given, the starting point is the employee’s wage for the full required notice period, subject to any agreement for a higher amount. For a fixed monthly wage, the illustrative formula is: monthly wage ÷ 30 × required notice days. This assumes a 30-day month and no different arrangement affecting the calculation.

Which wage is used in the calculation?

Article 2 defines “wage” as the actual wage. Do not exclude due allowances and benefits simply because a payslip lists them separately from basic salary. Check the contract, work regulations and payroll breakdown to identify the elements that form part of the wage, while distinguishing them from expense reimbursements or other sums that do not qualify as wages.

For variable earnings, Article 96 distinguishes piece-rate or production-based pay from pay consisting entirely of commissions or percentages. For piece-rate or production-based work, the average is based on what the employee received for actual working days during the final year of service. Where the entire wage consists of variable commissions or percentages, the average daily wage is calculated by dividing the amount received for actual working days by the number of those days. One month’s commission is therefore not a universal basis for calculation.

Three examples where no notice is given

The following examples assume an indefinite-term contract, an established wage figure for calculation purposes, no applicable exception and no agreement for a higher payment:

These examples explain the Article 76 of Saudi Labor Law calculation; they do not represent the employee’s entire final settlement. Years of service do not enter this formula in the same way as they do for an end-of-service award. A payment made for another purpose should not automatically be deducted from notice pay before its nature has been established.

What if notice is incomplete or attendance is waived?

Short notice does not satisfy the required notice period. By contrast, an employee may be excused from attending work while the contract and wage continue until the period ends. The effect of each situation therefore depends on the contract’s termination date, how long it continued and any written agreement about notice or payment.

Partial notice and an agreement for a higher payment

If 60 days’ notice is required but notice is given only 20 days before termination, the statutory minimum has not been met. To establish the amount being claimed, document when the notice was received, when the contract ended and the wages paid while it continued. Partial notice must be assessed against the applicable provision, the contract terms and any written agreement before a compensation figure is adopted.

Article 76 permits the parties to agree to a higher payment. A clause extending the notice period must be examined separately from a clause increasing the financial payment: differences in their wording may affect each party’s obligation.

Being excused from work while the contract continues

Article 78 allows an employer to excuse an employee from working during the notice period, while service continues to count and wages remain payable until the period ends. If you are told not to attend, request written confirmation of whether your contract and wage continue until the end of notice or the contract ends immediately. Waiving attendance while continuing pay differs from ending the contract without observing notice; it does not, by itself, create a right to receive the notice-period wage twice.

How do Articles 75, 76, 77 and 78 differ?

A notice-pay claim and an unlawful-termination compensation claim may arise in the same case, but each requires its own legal basis and supporting facts. The two do not become payable together automatically whenever employment ends. If the dispute concerns the reason for termination or an agreed compensation figure, see our English explanation of unlawful termination and Article 77, keeping its calculation separate from notice pay.

When is an Article 76 calculation inappropriate?

• Fixed-term contracts: Article 76 of Saudi Labor Law concerns indefinite-term contracts. Expiry of a fixed-term contract, early termination or breach of a non-renewal notice clause requires an assessment of the contract and reason for termination. A notice clause does not, by itself, turn a fixed-term contract into an indefinite-term one.
• Non-Saudi employees’ contracts: Article 37 requires a non-Saudi employee’s contract to be written and fixed-term. If no duration is stated, the term is treated as one year from the actual start of work, renewing for a similar period if work continues. An omitted end date is therefore not, by itself, a reason to use the indefinite-term calculation.
• A valid probationary period: Articles 53 and 54 govern probation, termination during it and the absence of a compensation entitlement when termination occurs within that period. Check that probation was expressly agreed, its duration and whether it was still running.
• Article 80 cases: termination without notice is permitted only in specified circumstances and subject to the statutory conditions, including giving the employee an opportunity to state the reasons for objecting. Merely citing Article 80 in a termination letter does not establish that those conditions were met.
• Article 81 cases: an employee may leave without notice while retaining statutory rights if the specified grounds exist. Do not treat every immediate departure as the employee’s breach before examining those grounds.
• Termination by mutual agreement: review the agreement, the employee’s written consent and the treatment of the parties’ entitlements. Do not assume that agreed termination is a unilateral termination without notice.

These situations are addressed in MHRSD’s provisions on contracts, probation and termination. Where the dispute concerns the grounds for ending employment, assess the legal basis for termination and its consequences before choosing a notice-pay calculation.

Practical checklist: What evidence supports a notice-pay claim?

Before bringing an Article 76 claim, organize the file so that each relevant fact can be matched to a document. This checklist helps structure a claim; it is not a set of formal requirements that guarantees acceptance:

1. The contract and amendments: establish the contract type, notice clause and any agreement for a higher payment.
2. The termination notice: identify who issued it, the reason given and the intended termination date.
3. Evidence that notice was received: establish the timeline and retain the complete communication.
4. Payroll breakdowns and bank transfers: explain basic salary, allowances and variable elements instead of relying on an unexplained total.
5. The documented contract and available Qiwa records: compare the recorded contractual terms and action taken with the other documents.
6. Correspondence after notice: clarify whether work continued, attendance was waived or a different end date was agreed.
7. The final settlement and evidence of the employment end date: identify payments already made and the amounts still disputed.

How do you claim unpaid notice pay?

1. Set out a specific claim: state the contract type, who ended the relationship, the notice and termination dates, wage, required period and amount sought. Keep notice pay separate from wages, leave pay and any other compensation.
2. Review the final settlement: compare the amount claimed with what was actually paid. Ask for unclear items to be explained before signing a comprehensive settlement or release.
3. Use the friendly-settlement process: MHRSD describes Friendly Settlement for Labor Disputes as the first stage for considering disputes between employees and employers. Attach the contract, if available, or other evidence of the employment relationship, together with the documents relevant to the claim. Our English guidance on how labor disputes are resolved explains the settlement and court pathway.
4. Follow the procedure if settlement fails: the official service description provides for a record confirming that an amicable settlement could not be reached. The claimant may then file a statement of claim before the competent Labor Court under Ministry of Justice procedures. Organize the employment-entitlements claim so that each request is separated and supported by its documents.

Timing and fees: MHRSD lists the friendly-settlement service as free and specifies 21 working days from the first session. This concerns the settlement stage; it is not a promise that a judgment will be issued or money recovered within that time. The parties’ responses and completeness of the documents may affect the case’s progress.

The official service description was checked on 7 November 2026.

What is the time limit for bringing a claim?

Article 234 of the Labor Law provides that a claim for a right arising under the Law or an employment contract is not admissible before the Labor Courts after 12 months from the end of the employment relationship, unless the claimant presents an excuse accepted by the court or the defendant acknowledges the right. Do not delay checking the deadline merely because negotiations continue: negotiations alone do not guarantee that a late claim will be admitted.

Before signing a final settlement, request a review of your compensation calculation and claim documents.

Frequently asked questions about Article 76 of Saudi Labor Law

Conclusion: Check the contract before calculating notice pay

To apply Article 76 accurately, establish your contract type first, then the required notice period based on who ended the relationship and how wages are paid. Review the actual wage and evidence of notice and payment. List notice pay as a separate item, and check any relevant exception or agreement before adopting a figure or signing a settlement.