Unlike in Peter Jackson’s film trilogy, where Saruman meets his end at the hands of Grima Wormtongue in The Two Towers Extended Edition, Tolkien gives the White Wizard a more tragic downfall in The Return of the King.
After his defeat at Isengard, Saruman does not die immediately. Stripped of his power, he flees to the Shire, where he cruelly takes control under the alias 'Sharkey'. When Frodo and his companions return home, they find their peaceful land turned into an industrial wasteland. The Hobbits rise against their oppressors in The Scouring of the Shire, overthrowing Saruman and his minions.
Even then, Frodo, ever merciful, refuses to have Saruman executed. But the former White Wizard’s arrogance leads to his undoing. He continues to humiliate and mistreat his servant, Grima Wormtongue, who, in an act of rebellion, slits Saruman’s throat. Before Frodo can intervene, the enraged Hobbits kill Wormtongue, bringing an end to both traitors.

Saruman’s death is poetic in its irony — a once-powerful Maia, reduced to nothing by his own cruelty. His spirit attempts to rise, but the winds scatter it, denying him even the dignity of an afterlife.
"To the dismay of those that stood by, about the body of Saruman a grey mist gathered, and rising slowly to a great height like smoke from a fire, as a pale shrouded figure it loomed over the Hill. For a moment it wavered, looking to the West; but out of the West came a cold wind, and it bent away, and with a sigh dissolved into nothing."
Unlike Sauron, who once ruled over darkness itself, Saruman’s end is not one of power lost, but of a prideful man who refused redemption.