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Pay Settlement Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Pay Settlement Agreement

"I need a Pay Settlement Agreement under Saudi law for an amicable termination with our Senior Finance Manager, who has worked with us for 5 years, with a planned settlement payment of 500,000 SAR to be paid by March 15, 2025."

Document background
The Pay Settlement Agreement is a crucial document used in Saudi Arabia when finalizing financial obligations between employers and employees, whether during employment termination or resolving payment disputes. It must strictly adhere to Saudi Labor Law, Ministerial Resolutions, and Sharia principles, making it essential for documenting the full and final settlement of all employment-related financial matters. The agreement typically becomes necessary during employee exits, restructuring, dispute resolutions, or when implementing negotiated settlements. It includes comprehensive calculations of entitlements, payment terms, and mutual releases, while ensuring compliance with the Kingdom's Wage Protection System and other regulatory requirements. This document serves as legal protection for both parties and is often required for formal closure of employment relationships in Saudi Arabia.
Suggested Sections

1. Parties: Identification of the employer and employee, including full legal names and details

2. Background: Brief history of employment relationship, reason for settlement, and context of the agreement

3. Definitions: Key terms used in the agreement, including definition of the Settlement Sum and Settlement Period

4. Settlement Terms: Detailed breakdown of the settlement amount and payment terms

5. Calculation of Entitlements: Breakdown of how the settlement sum was calculated, including salary, end of service benefits, and other entitlements

6. Payment Method and Timing: Details of how and when the settlement amount will be paid, including WPS compliance

7. Tax and Deductions: Statement regarding any applicable tax treatment and authorized deductions

8. Release and Waiver: Mutual release of claims and waiver of future claims related to the employment

9. Acknowledgment: Employee's acknowledgment of receiving all entitlements and understanding the agreement

10. Governing Law: Confirmation that Saudi Law governs the agreement

11. Language: Specification of controlling language version (typically Arabic with English translation)

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Confidentiality: Terms requiring parties to keep the settlement terms confidential - used when privacy is important

2. Non-Disparagement: Mutual obligations not to make negative statements - used in sensitive departures

3. Continuing Obligations: Any ongoing obligations that survive settlement - used when there are post-settlement duties

4. Return of Property: Requirements for returning company property - used when employee has company assets

5. Reference: Terms regarding future employment references - used when agreed as part of settlement

6. Medical Insurance: Provisions regarding continuation or termination of medical benefits - used when relevant

7. Visa/Immigration Status: Provisions regarding employment visa status - used for expatriate employees

Suggested Schedules

1. Schedule 1 - Settlement Calculation: Detailed calculation of all settlement components including basic salary, benefits, and deductions

2. Schedule 2 - Payment Schedule: If payment is to be made in installments, detailed payment dates and amounts

3. Schedule 3 - Benefits Statement: Statement of all benefits and their treatment under the settlement

4. Appendix A - Employee Service History: Summary of employment duration and positions held

5. Appendix B - Outstanding Loans/Advances: Details of any outstanding loans or advances to be settled

6. Appendix C - Company Property List: List of company property to be returned, if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






































Clauses






























Relevant Industries

Banking and Financial Services

Oil and Gas

Manufacturing

Technology

Construction

Retail

Healthcare

Education

Telecommunications

Professional Services

Hospitality

Transportation and Logistics

Real Estate

Mining

Government and Public Sector

Relevant Teams

Human Resources

Legal

Finance

Payroll

Compliance

Risk Management

Employee Relations

Executive Leadership

Compensation and Benefits

Relevant Roles

HR Director

HR Manager

Legal Counsel

Finance Director

Payroll Manager

Compensation and Benefits Manager

HR Business Partner

Employment Relations Manager

Chief Human Resources Officer

General Counsel

Finance Manager

Chief Financial Officer

Compliance Officer

Risk Manager

HR Operations Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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