Toxic leadership in education presents a grave problem that profoundly impacts employee performance. Teachers and staff subjected to toxic leadership often experience stress, burnout, and reduced job satisfaction. The present study investigates the multifaceted impact of toxic leadership on employee engagement, loyalty, satisfaction, and performance in higher educational settings in Saudi Arabia. A cross-sectional approach was applied to collect data from 405 academic and non-academic employees working in higher educational institutions in Jeddah, Saudi Arabia. The Structural Equation Modelling (SEM) technique via SmartPLS software was applied to test the direct and indirect hypothetical relationship between the key constructs. We found toxic leadership directly influences employee engagement, loyalty, satisfaction, and performance. Thus, employee loyalty and satisfaction directly influence employee performance, surprisingly, we found that employee engagement insignificantly impacts employee performance. Further, the present study explored the mediating role of employee loyalty and satisfaction between toxic leadership and employee performance, where employee engagement does not mediate the relationship between toxic leadership and employee performance. By shedding light on the complex relationship between toxic leadership and employee performance in educational institutions, this study offers insights for educational administration, policymakers, and The Ministry of Education to recognize the importance of fostering positive leadership practices within educational institutions.