What is the end of service award in Saudi Arabia?
The end of service award is a one-time payment that your employer must give you when your work relationship ends. In everyday speech people call it EOSB, end of service benefit, gratuity or "mukafa'at nihayat al-khidma". It is not a gift and it is not a bonus. It is a legal right that grows with every month you work.
The longer you stay with one employer, the bigger the award. After five years it grows twice as fast. If you resign, the law reduces it unless you have ten or more years or a special exception applies.
For many expats it is the largest single payment they receive when a job ends, so check the number yourself before signing any final settlement.
The award is separate from your other final dues, such as last salary, unused leave and unpaid overtime. Work those out with our Saudi vacation salary calculator and our Saudi overtime calculator.
Who is eligible?
The award applies to workers covered by the Saudi Labor Law. This includes Saudi nationals and expats working in the private sector, whether on a fixed-term or an indefinite contract. Your nationality does not change the formula.
Some groups are outside the Labor Law. Article 7 excludes domestic workers (such as house drivers, maids and cooks working in a home), family members working in a small family business with no other staff, some agricultural and sea workers, sports players and coaches of clubs and federations, and non-Saudis who come for a single task of two months or less. Domestic workers have their own regulation, which we explain in the special cases section below. Government employees are covered by civil service rules, not the Labor Law.
Legal basis: Articles 84 to 88 of the Saudi Labor Law
The rules come from the Saudi Labor Law issued by Royal Decree No. M/51. The official Arabic text is published on the Bureau of Experts at the Council of Ministers website. Here is what each article says, in plain English:
| Article | What it says (summary) |
|---|---|
| Article 84 | When the work relationship ends, the employer pays an award of half a month's wage for each of the first five years and one month's wage for each year after that. The last wage is the basis. Part of a year is paid in proportion. |
| Article 85 | If the worker resigns: one third of the award after 2 to 5 years of continuous service, two thirds after more than 5 and less than 10 years, and the full award after 10 years or more. |
| Article 86 | The parties may agree that commissions, sales percentages and similar variable pay are not counted in the wage used for the award. |
| Article 87 | Full award even after leaving if the worker left because of force majeure, or if a female worker ends the contract within 6 months of her marriage contract or 3 months of giving birth. |
| Article 88 | The employer must pay the wage and settle all dues within one week if the employer ended the contract, or within two weeks if the worker ended it. The employer may deduct work-related debts. |
Two more articles matter. Article 80 lists cases where an employer can end the contract without the award (such as assault, fraud or long absence). Article 81 lists cases where a worker can leave without notice and keep all rights (such as unpaid wages or serious danger at work).
What changed in 2025 (and what did not)
A large package of amendments to the Saudi Labor Law came into force on 19 February 2025, following Cabinet Decision No. 117 and Royal Decree No. M/44. The Ministry of Human Resources and Social Development said the package revised 38 articles, removed seven and added two new ones.
For the end of service award, the key point is this: the award formula in Articles 84 to 88 did not change. The official law text on the Bureau of Experts website does not show any amendment marker on these articles. So the half-month and full-month rule and the resignation fractions still apply in 2026.
However, some changes affect how the award plays out in real life:
- Resignation procedure. Resignation is now defined as a written statement by the worker. If the employer does not reply within 30 days, the resignation is treated as accepted. The employer may delay acceptance for up to 60 days for business needs. A worker can withdraw the resignation within 7 days if it has not been accepted yet. These dates fix your last working day, which fixes your service length.
- Notice period. For indefinite contracts, the worker's notice period is now 30 days, while the employer must still give 60 days.
- Probation. The maximum probation is now 180 days, and it must be written in the contract. Either side may end the contract during probation.
- Fixed-term resignation. Employers can no longer claim compensation from a worker who resigns from a fixed-term contract by the new procedure. The worker keeps legal dues, including the reduced award under Article 85.
Which wage is used for the end of service award?
This is the question that causes the most arguments. Article 84 says the "last wage" is the basis. Article 2 of the law gives two definitions:
- Basic wage is everything paid to the worker for the work under the contract, plus periodic raises.
- Actual wage is the basic wage plus all other increases due to the worker. These include commissions, allowances for effort or job risk, cost-of-living or family allowances, contractual or customary bonuses, and in-kind benefits the employer must provide.
The end of service award is based on the actual wage. In practice, that means your basic salary plus your fixed regular allowances, such as housing and transport. The Ministry's own guidance on the award describes the wage as the basic wage plus all other increases that are due.
Two details are worth knowing:
- Housing given in kind. If your employer gives you a flat instead of cash, the law values in-kind benefits at up to two months of basic wage per year, unless the contract sets a higher value. Two months per year equals one sixth of the basic wage per month. For example, with a basic wage of SAR 6,000 the in-kind housing value would be up to SAR 1,000 a month for this purpose.
- Commissions. Under Article 86, you and your employer may agree in writing that commissions and sales percentages are not counted. If there is no such agreement, they are part of the actual wage. Many people use an average of recent months for variable pay. Check your contract.
How to calculate end of service in Saudi Arabia: step by step
Step 1: Find your monthly wage
Step 2: Find your length of service
Count from your first day of work to your last day of work, including both. Turn the result into years. Whole years plus the extra days divided by 365 is a good method. Subtract long unpaid leave if your employer does not count it as service.
Step 3: Work out the full award (Article 84)
If years > 5: Award = 5 × (wage ÷ 2) + (years − 5) × wage
Step 4: Apply the resignation reduction (Article 85), if any
Resigned, 2 to 5 years: Award × 1/3
Resigned, more than 5 and less than 10 years: Award × 2/3
Resigned, 10 years or more: Award × 1
If Article 87 applies, or you left under Article 81, skip Step 4 and take the full award.
Here is a quick table of what the full award is worth in months of wage:
| Years of service | Full award (months of wage) | If you resign |
|---|---|---|
| 1 | 0.5 | 0 |
| 2 | 1 | 0.33 |
| 3 | 1.5 | 0.5 |
| 5 | 2.5 | 0.83 |
| 7 | 4.5 | 3 |
| 10 | 7.5 | 7.5 |
| 15 | 12.5 | 12.5 |
| 20 | 17.5 | 17.5 |
The Saudi Labor Law sets no upper cap on the award. Compare this with the UAE gratuity calculator if you have worked in both countries.
Resignation vs termination: why the reason matters
The reason your job ended can change your award a lot. Here is how each case is treated:
| How the job ended | Award |
|---|---|
| Employer ended an indefinite contract (with notice) | Full award |
| Fixed-term contract reached its end date and was not renewed | Full award |
| Employer ended the contract during probation | Article 80 allows ending without award during probation |
| Worker resigned | 0, 1/3, 2/3 or full, by years of service |
| Worker left under Article 81 (employer breach, unpaid wages, abuse, danger) | Full award, keeps all rights |
| Force majeure, or woman ending contract within 6 months of marriage or 3 months of birth | Full award (Article 87) |
| Dismissed under Article 80 for proven misconduct | No award |
Is not renewing a contract the same as resigning?
If your fixed-term contract simply runs to its end date, that is usually a normal end of contract, not a resignation. If your employer calls it a resignation, ask for the reason in writing and check with the Ministry before you sign.
Unfair termination is a different claim
If an employer ends your contract without a valid reason, you may also claim compensation under Article 77. That compensation is decided by the labor court and is in addition to your end of service award. Our calculator does not include Article 77 compensation because the court sets the amount based on the facts.
Worked examples
Each example matches the calculator output for the same inputs.
Example 1: Contract ended by employer after 7 years
Ahmed works from 1 January 2019 to 31 December 2025. His basic wage is SAR 5,000, housing SAR 1,250, transport SAR 500 and other allowances SAR 1,250. His employer ends the contract.
Service = exactly 7 years
First 5 years: 5 × 4,000 = SAR 20,000
Next 2 years: 2 × 8,000 = SAR 16,000
Total award = SAR 36,000.00
Example 2: Resignation after 4 years
Maria works from 1 March 2021 to 28 February 2025 on a total wage of SAR 6,000. She resigns.
Full award = 4 × 3,000 = SAR 12,000
Resigned with 2–5 years: 12,000 × 1/3 = SAR 4,000.00
Example 3: Resignation after 8 years and 6 months
Rahul works from 1 January 2017 to 30 June 2025 on a total wage of SAR 10,000. He resigns.
First 5 years: 5 × 5,000 = SAR 25,000
Remaining 3.4959 years × 10,000 = SAR 34,958.90
Full award = SAR 59,958.90
Resigned with 5–10 years: 59,958.90 × 2/3 = SAR 39,972.60
Example 4: Woman leaving after childbirth (Article 87)
Fatima works from 1 May 2022 to 30 April 2025 on a total wage of SAR 7,000. She gives birth in February 2025 and ends her contract in April, within three months.
Full award = 3 × 3,500 = SAR 10,500.00
If this were an ordinary resignation, she would get only SAR 3,500.
Example 5: Resignation before 2 years
Joseph works from 1 December 2023 to 30 September 2025 (1 year and 304 days) on SAR 5,000 and resigns. The full award would be about SAR 4,582, but because he resigned with less than two years of service, the award is SAR 0.00.
Special cases
Probation
Article 80 allows a contract to end during probation without the award. Since February 2025 the maximum probation is 180 days and it must be written in the contract. If your contract says nothing about probation, you are not on probation.
Unpaid leave and absence
Days of long unpaid leave are usually not counted as service for the award. Paid annual leave, paid sick leave and public holidays are counted. Use the "unpaid leave days" box to take out days that your employer does not count.
Part-time workers
Part-time workers covered by the Labor Law use the same formula on their part-time wage.
Domestic workers
House workers are outside the Labor Law. Their rules come from the Domestic Workers Regulation, issued by Ministerial Decision 310 of 1434 AH and its later updates. Under that regulation, a domestic worker who completes four continuous years with the same employer is entitled to one month's wage as end of service. Domestic worker disputes go through the Musaned platform and a separate process. Check the latest rules with the Ministry.
Saudi nationals and GOSI
The end of service award is paid by the employer. It is separate from social insurance. GOSI contributions do not replace the award. You can estimate those contributions with our Saudi GOSI calculator.
Common mistakes when calculating EOSB
- Using only the basic salary. The award uses the actual wage, which normally includes fixed allowances such as housing and transport. Using only basic pay can cut the award by a quarter or more.
- Forgetting part years. The law pays for parts of a year. Seven years and nine months is not just seven years.
- Applying the resignation fraction to only part of the award. The fraction (1/3 or 2/3) applies to the whole award, not just to the years after five.
- Mixing up the 5-year line. After exactly five years of service a resigning worker still gets one third. Two thirds start only when service is more than five years.
- Treating contract expiry as resignation. When a fixed-term contract simply ends, you should normally get the full award.
- Signing a clearance too fast. Article 8 says any waiver of rights during the contract is void unless it is better for the worker. Still, read every line before you sign a final settlement, and keep a copy.
How to claim if your employer does not pay
Article 88 gives the employer one week to settle dues if the employer ended the contract, and two weeks if you ended it. If you are not paid, follow these steps:
- Ask in writing. Send a short, polite email or letter to HR asking for your end of service award, with your calculation. Keep a copy.
- File an amicable settlement request. The Ministry of Human Resources and Social Development (HRSD) handles the first stage. You can file through the Ministry's labor e-services or the national platform (my.gov.sa) using your Nafath login. The service is free and is offered in Arabic, English and Urdu. The Ministry helpline is 19911.
- Go to the labor court. If no settlement is reached, the case is referred to the labor courts, which belong to the Ministry of Justice. Claims can be filed online through the Najiz portal.
- Respect the time limit. The labor court will not normally hear a claim filed more than 12 months after the work relationship ended, unless there is an accepted excuse.
Keep your contract, payslips, bank statements and any resignation or termination letter. Bank records are strong proof of your real wage.
Practical tips
- If you plan to resign near 2, 5 or 10 years of service, check the dates first. A few weeks can change your award a lot.
- Under the new resignation rules, keep proof of the date you submitted your resignation. If no reply comes within 30 days, the resignation is treated as accepted.
- Ask for a full final settlement sheet that shows the award, leave pay, last salary and any deductions. Check each line with our vacation salary tool.
Frequently asked questions
How many months of salary do I get for end of service in Saudi Arabia?
For the first five years you get half a month of wage for each year. From year six onward you get one full month of wage for each year. Part years are paid in proportion. If you resign, the amount may be reduced to one third or two thirds, or nothing if you worked less than two years.
Is end of service calculated on basic salary or total salary in Saudi Arabia?
Article 84 says the last wage is used. The Labor Law defines this as the actual wage, which is the basic wage plus regular allowances such as housing and transport. Commissions can be excluded only if you and your employer agreed to that under Article 86.
Do I get end of service if I resign before two years?
No. Under Article 85, a worker who resigns with less than two years of continuous service gets no end of service award, unless one of the Article 87 exceptions applies.
Did the 2025 Saudi Labor Law amendments change end of service?
The amendments that came into force on 19 February 2025 changed resignation procedure, notice periods, probation and some leave rules. Articles 84 to 88 on the end of service award were not among the changed articles, so the formula stays the same.
What happens if my fixed-term contract ends and is not renewed?
When a contract simply ends at its expiry date, this is not a resignation. You should receive the full award under Article 84. Check your contract carefully, because a written resignation before expiry is treated differently.
Can a woman get the full award if she resigns after marriage or childbirth?
Yes. Article 87 gives a female worker the full award if she ends her contract within six months of her marriage contract date or within three months of giving birth, even if she resigned.
When must my employer pay the end of service award?
Article 88 says the employer must pay within one week if the employer ended the contract, and within two weeks if the worker ended it.
Can I lose my end of service benefit completely?
Yes, in the cases listed in Article 80, such as serious misconduct, proven fraud or long unexcused absence after written warning. The employer must first give you a chance to answer the accusation.
Does unpaid leave count in my service period?
Long unpaid leave is usually not counted as service for the award. Our calculator lets you subtract unpaid leave days. Check with your employer or the Ministry if you are not sure.
How long do I have to claim unpaid end of service in Saudi Arabia?
A labor court claim should be filed within 12 months from the end of the employment relationship. Start with an amicable settlement request through the Ministry of Human Resources and Social Development first.
Disclaimer
This Saudi end of service calculator gives an estimate for general guidance only. It is not legal advice. Employers and courts may count days or value allowances slightly differently, and your contract or company rules may give you more than the legal minimum. For a binding answer, contact the Ministry of Human Resources and Social Development or a licensed Saudi lawyer.
Sources / references: Saudi Labor Law, Royal Decree No. M/51, Articles 2, 7, 8, 77, 80, 81, 84–88, official text on the Bureau of Experts at the Council of Ministers; Ministry of Human Resources and Social Development, End-of-Service Award Regulations; Ministry announcement on the Labor Law amendments in force from 19 February 2025 (Cabinet Decision No. 117, Royal Decree No. M/44); Domestic Workers Regulation (Ministerial Decision 310).