How the Saudi end-of-service award works
When a job in the Saudi private sector ends, the employer pays an end-of-service award (EOSB, or mukafa’at nihayat al-khidma). Article 84 of the Labor Law sets the amount, and Article 85 cuts it when the worker resigns.
- Half a month per year for the first five years.
- A full month per year for every year after that.
- Part years count pro rata, so 3 years and 6 months earns 1.75 months’ wage.
- No minimum service when the employer ends the contract or it expires.
- No cap. Unlike the UAE, the award keeps growing with service.
Which wage is used
Saudi law uses the actual wage, not just basic pay. Article 2 defines it as the basic wage plus regular additions such as housing and transport allowances. Your contract may leave out commission, sales percentages and similar variable pay (Article 86). The calculator adds up basic pay and the allowances you enter. Use the figures from your last payslip.
This is the biggest difference from the UAE, where only basic salary counts. A worker on SAR 6,000 basic with SAR 2,100 of allowances has an EOSB wage of SAR 8,100.
If you resign
| Service when you resign | Share of the award |
|---|---|
| Under 2 years | Nothing |
| 2 to 5 years | One third |
| More than 5 and under 10 years | Two thirds |
| 10 years or more | Full award |
There are exceptions. Under Article 87 you receive the full award even though you resigned if:
- you left because of force majeure beyond your control, or
- you are a woman who ends her contract within 6 months of marriage or 3 months of giving birth.
If you leave without notice because your employer broke the contract or the law, for example by not paying wages or by assault (Article 81), you keep all your statutory rights, so the award is paid in full. If you were dismissed for one of the specific misconduct cases in Article 80, no award is due.
Worked example: resigning after 7 years
Faisal earns SAR 6,000 basic, SAR 1,500 housing and SAR 600 transport, a wage of SAR 8,100. He resigns after exactly 7 years.
- First 5 years: 5 × ½ = 2.5 months.
- Next 2 years: 2 × 1 = 2 months.
- Full award: 4.5 × 8,100 = SAR 36,450.
- He resigned with more than 5 but under 10 years, so he gets two thirds: SAR 24,300.
If his employer had ended the contract instead, he would get the full SAR 36,450.
Worked example: contract ends after 3 years 6 months
Maria’s fixed-term contract expires after 3.5 years. Her wage is SAR 5,000 including allowances.
- 3.5 × ½ = 1.75 months.
- Award: 1.75 × 5,000 = SAR 8,750, paid in full because she did not resign.
Payment and deductions
Article 88 says the employer must pay within one week if it ended the contract, or within two weeks if you did. The employer may deduct debts related to your work. Unpaid dues can be claimed through the Ministry of Human Resources and Social Development’s dispute process and the labour courts.
The amendments to the Labor Law that took effect on 19 February 2025 changed resignation notice and other procedures, but, as far as we could check, did not change the award formula in Articles 84, 85 and 87.
Tips
- Timing matters if you plan to resign. Resigning at 4 years 11 months gets one third; waiting past 5 years gets two thirds. At 10 years you get everything.
- Check how your service is counted. This calculator counts calendar days from your first to your last working day and divides by 365. Your employer may count differently, for example with the Hijri calendar, which can change the result slightly.
- Keep your payslips. The award uses your last wage, so a recent raise or allowance increase counts in full.
- Working in Dubai or Abu Dhabi instead? Use the UAE gratuity calculator, which uses basic salary and different rates.
- Planning to send savings home or buy gold? The gold price calculator works in grams, tola and karat. To convert dates between the Hijri and Gregorian calendars, use the Hijri date converter.
This page gives an estimate based on the published law. It is not legal advice.