The timely settlement of a worker’s final dues upon termination is a fundamental protection under the Saudi Labor Law (SLL). Governed by Article 88, this rule enforces strict payment deadlines for employers to settle all outstanding amounts, including End-of-Service Benefit (EOSB), final wages, and accrued leave pay.
Failure to comply with these deadlines triggers serious legal and financial penalties.
The Mandate of Article 88: Timely Settlement
Article 88 obligates the employer to settle all financial entitlements immediately upon the end of the employment relationship. The settlement includes:
- Final wages up to the last working day.
- Payment for accrued, unused annual leave.
- The End-of-Service Benefit (EOSB) calculated per Articles 84–87.
The Two Distinct Payment Deadlines
The timeline for settlement depends entirely on who initiates the termination:
| Termination Initiated By | Rule | Maximum Payment Deadline |
|---|---|---|
| Employer (Termination or Contract Expiry) | The One-Week Rule | Within 7 days from the date the employment relationship ends. |
| Worker (Resignation) | The Two-Week Rule | Within 14 days from the date of termination. |
These deadlines override the normal payroll cycle. Employers must complete final settlement promptly, though they may deduct verified work-related debts owed by the employee.
👉 Review the full Saudi Final Settlement Process and Components →
The Worker’s Right to Claim Dues: Priority and Protection
The SLL grants highest legal priority to workers’ financial entitlements, ensuring that payment of final dues is protected even if the employer faces financial hardship.
Legal Priority of Worker Dues
- Privileged Debt Status: Amounts due to workers rank above nearly all other debts or liabilities of the employer.
- Bankruptcy or Liquidation: In insolvency cases, worker claims are treated as first-class debts.
- Expedited Payment Right: Workers must receive at least one month’s wage before almost any other expense, including court or liquidation costs.
Dispute Resolution Mechanism
If a worker’s final dues are delayed or withheld, they may:
- File a complaint with the competent Labour Office.
- The case is referred to the Labour Court, which processes such claims on an expedited basis.
This ensures rapid enforcement of worker rights and timely recovery of dues.
Legal Consequences and Penalties for Delayed Payment
Failure to meet the 1–2 week settlement deadlines constitutes a violation of Article 88 and exposes the employer to punitive measures.
Penalty for Unjustified Delay
- The Labour Court may impose a fine up to twice the amount of the delayed wages or dues.
- Example: A delay of SAR 10,000 could result in a fine of up to SAR 20,000.
- Persistent or deliberate non-compliance can also trigger administrative sanctions, including suspension of employer services or blacklisting.
These penalties reinforce the principle that timely final settlement is not discretionary but a statutory obligation under Saudi law.
Conclusion
The 1–2 Week Rule under Article 88 ensures swift financial closure when employment ends - protecting workers from hardship and ensuring accountability for employers.
Every employer in Saudi Arabia must have a documented final settlement process that guarantees EOSB and related payments are completed within the legal timeframe.
Any unresolved disputes or questions must be formally directed to the relevant Saudi authorities for official clarification and binding decisions.
Need Your Final Entitlement Calculated Now?
Stop guessing. Our expert-verified tool applies the precise Saudi Labor Law framework, calculating the progressive accrual rates (Article 84) and applying the correct proportional reductions for resignation (Article 85/87) to your Actual Wage. Get immediate clarity on your final dues.
Use the Saudi EOSB Calculator Now