What must the final settlement and end-of-service statement show when a worker moves to a new employer?

When is the final settlement issued? Four situations

The settlement is issued whenever the employment relationship ends, whatever the reason, because Article 84 of the Labor Law requires the employer to pay the worker an award for the period of service when the employment relationship ends. What the statement says differs with the reason for the ending, so fix the reason first, because it determines the award line.

1. Resignation: after accepting it in writing with the resignation acceptance letter E-12, the statement records resignation as the reason for the ending, the award is due under the proportions in Article 85 of the Labor Law, and the statement names the proportion applied and the period of service without repeating the calculation in the body of the settlement.
2. End of a fixed-term contract: if the agreed term has ended and the contract was not renewed, the end date of the term is recorded as the date the relationship ended, and the award is due on the basis of Article 84.
3. Termination by the employer: the reason is recorded as stated in the termination letter. If the contract was ended under one of the cases in Article 80 of the Labor Law, the statement says so expressly and notes that the worker was given the opportunity to state their reasons for objecting, because those are the cases in which the Law allows ending the contract without an award; in other cases the worker is entitled to the award and the termination may also give rise to compensation.
4. Transfer of a non-Saudi worker's services through Qiwa: the transfer ends the worker's relationship with the current establishment and starts a new one with the receiving establishment, so the current establishment issues its settlement for the period of service with it, recording transfer of services as the reason for the ending, together with the last working day with it.

What does the statement show, line by line?

A good statement can be read without a verbal explanation. It opens with the worker's and the establishment's details, the joining date, the last working day and the reason for the ending, then lists entitlements and deductions in a clear table, and closes with the net amount and how it is paid.

• Unpaid wages: pay for the days worked in the final month and any wages outstanding from earlier months, showing the basic wage and the fixed allowances that make it up.
• Accrued unused leave: the number of remaining days and the pay that corresponds to them, because the Labor Law entitles the worker to pay for leave days due if they leave work before using them, and for parts of a year in proportion to the time worked.
• End-of-service award: a separate line stating the period of service in years, months and days, the last wage used as the basis, the reason for the ending and the proportion applied, and the amount of the award. The last wage includes fixed regular allowances and excludes occasional bonuses.
• Other entitlements: any payment in lieu of notice or amounts agreed in the contract, if any, each on its own named line.
• Deductions: each deduction on its own line with its reason and supporting document, such as the value of unreturned equipment. The Labor Law allows the employer to offset against the amounts due to the worker any debt owed to it because of the work, so the statement should carry no deduction that is unrelated to the work or has no supporting basis.
• Outstanding loans and advances: the remaining balance at the end date, what was repaid during service, and what is offset in the settlement, with the loan agreement or the worker's acknowledgment of it attached.
• Net amount and payment method: the final amount in figures and in words in riyals, and the date and reference of the transfer to the worker's bank account.

Do not repeat the calculation formula in the settlement; it is enough to state its inputs and its result. If you want to check the figure before issuing, use the end-of-service calculator and its guide, then carry the result into the statement. Remember too that the Labor Law sets a short period for settling the worker's rights after the relationship ends, and it is shorter when the employer is the one who ended the contract, so prepare the statement before the last working day, not after it.

How does the worker sign the settlement?

1. Prepare the complete statement before or on the last working day, and send the worker a copy to review before the signing appointment.
2. Pay the amounts into the worker's bank account before or on the day of signing, and state the transfer reference in the statement, because the settlement records a receipt that actually happened, not a promise to pay.
3. Make the statement bilingual, Arabic and English, if the worker does not read Arabic, stating that the Arabic prevails in case of difference, so it cannot later be argued that the worker signed something they did not understand.
4. The worker signs the statement and the settlement, preferably on every page, writing their name, their ID or iqama number and the date of signing, and the person authorised by the establishment signs on its behalf.
5. If the worker objects to an item, record the objection on the statement or in a signed annex, correct the item if the error is confirmed, and do not pressure the worker to sign or tie the return of their documents to their signature.
6. Give the worker a signed copy, and keep the original in their file with the resignation or termination letter, the transfer reference and the equipment handover record.

The release wording: why must it not hide the award?

The most common mistake is a sentence such as «I have received all my rights and claim nothing from the establishment», with no figures and no items. It looks decisive, but it is one of the weakest things an establishment can hold in a dispute, because a general release that does not show what was received opens the argument that the worker released a right without knowing its amount, and the end-of-service award is the first thing asked about.

The Labor Law voids any release or settlement of the rights arising for the worker under it if made while the employment contract is in force, unless it is more beneficial to the worker. That is why the settlement is signed after the relationship ends, not before, and why the employment contract, the resignation acceptance letter or the transfer paperwork must not contain an advance waiver of the award.

Sound wording ties the release to the statement: the worker releases the establishment from what they actually received according to the listed items, with the award visible by amount, period and reason. If no award is due, as in one of the Article 80 cases, it is not enough to delete its line; the reason is stated expressly.

When the worker moves to a new employer: what exactly must the settlement show?

A transfer puts three parties in front of one document: the worker, the previous establishment, and the new establishment, which wants the worker to arrive without obligations left open with the previous one. That is why, in a transfer, the settlement shows points that an ordinary departure does not need to the same degree.

• The last working day with the previous establishment, matching the date recorded in Qiwa, so the two periods of service do not overlap.
• The reason for the ending recorded as a transfer of services, with a reference to the worker's written consent to the transfer.
• The end-of-service award for the period of service with the previous establishment, paid and shown by amount, rather than left to a verbal understanding with the new employer.
• Any outstanding loan or advance and how it was settled, so that no balance is left hanging after the worker moves.
• Confirmation that equipment was handed over and documents were returned to the worker, so the file closes without later claims from either side.

So that the paperwork does not conflict, review the transfer-of-services clause in the original employment contract before issuing the settlement, since it sets what the parties agreed for a move; the details are in the transfer-of-services clause guide. The difference between the resignation acceptance letter and the termination letter that precede the settlement is in the termination and resignation letters guide, and contract authentication is in the Qiwa contract authentication guide.

Handing over documents, and the Qiwa and social insurance steps

Closing the file is not complete with the signature. After it come three parties: the worker, the Qiwa platform, and the General Organization for Social Insurance. Order the steps so that no step comes before one it depends on.

1. Receive the equipment, cards, keys and documents in the worker's custody under a handover record signed by the worker and the direct manager, and put the value of anything not returned into the deductions only if it has a supporting basis.
2. Return to the worker every certificate or document they deposited with the establishment, and on request give them, free of charge, a service certificate showing their joining date, the date their relationship ended, their occupation and their last wage, without anything that could harm their reputation or reduce their job opportunities.
3. Ending the contract in Qiwa: if the contract is authenticated in Qiwa, make sure it is ended there with the same last working day that appears in the settlement. The worker can also file a contract termination request from their Qiwa individuals account by choosing the contract, the reason and the last working day, and the request is not accepted if another termination request on the same contract is awaiting approval.
4. Transfer of services in Qiwa: in a transfer, the new establishment files the transfer request from its Qiwa establishment account and adds an employment contract for the transferred worker. Both establishments must keep the worker's written consent to the transfer, and the current establishment's electronic approval may not be made subject to any condition, so do not make signing the settlement a condition of your approval. A non-Saudi worker may also move when their authenticated contract ends without the current employer's consent.
5. Social insurance: once the employment relationship has actually ended, exclude the worker from the establishment's registration through the contributor exclusion service, choosing the exclusion reason that matches the settlement. Exclusion is not accepted before the employment relationship ends, and the organisation requires it as soon as the worker leaves and within a set period, so do not delay it.
6. Keep the settlement, the statement, the handover record, the service certificate and the Qiwa and social insurance notices in one file, because that is what you will need if a dispute arises later.

Frequently asked questions