Article 77 Compensation Calculator for Unlawful Termination

When is Article 77 compensation due?

Article 77 compensation is due to the affected party where the other party ends the contract for an illegitimate reason. It usually arises where an employer ends the contract without a valid reason, but either party may claim it. The labor court decides whether the reason was legitimate based on the facts and documents.

How is it calculated for an open-ended contract?

If the contract sets no specific amount, compensation is 15 days’ wage for each year of service, with part-years counted proportionally. Example: four years of service and an actual wage of SAR 9,000: 4 × 4,500 = SAR 18,000. The two-month minimum is also SAR 18,000, so the result is SAR 18,000.

How is it calculated for a fixed-term contract?

For a fixed-term contract, compensation is the wage for the remaining contract period. If a two-year contract is ended after six months at SAR 8,000 a month, compensation is eighteen months’ wage, about SAR 144,000, as this exceeds the minimum.

What is the minimum?

The article provides that compensation is not less than two months’ wage in either case, so the calculator shows both the calculated figure and the minimum and takes the higher one.

Which wage is used?

The actual wage: basic pay plus allowances, commissions and fixed benefits as defined in the Labor Law. The court decides what the wage includes if there is a dispute.

Is it paid in addition to the end-of-service award?

Yes. Article 77 compensation is separate from the end-of-service award, unpaid wages and leave pay. See our Article 77 guide for the conditions, and the statutory deadlines calculator for the last date to claim.

Frequently asked questions

How much is Article 77 compensation?

15 days’ wage per year of service for an open-ended contract, or the wage for the remaining period for a fixed-term contract, with a minimum of two months’ wage in both cases, unless the contract sets another amount.

Is it due if I worked less than a year?

Yes, if the termination is found to be for an illegitimate reason; the minimum of two months’ wage applies regardless of length of service.

Is it deducted from the end-of-service award?

No. It is a separate entitlement added to the end-of-service award and any wages due.

What if my contract sets a specific amount?

The agreed amount applies instead of the default Article 77 formula, unless it conflicts with a mandatory rule.

Who decides that the reason was illegitimate?

The labor court, after the amicable settlement stage, based on the facts, documents and termination procedure.