Saudi EOSB rules: how end-of-service benefit works
Everything that decides your end-of-service benefit in Saudi Arabia — accrual, the wage it's based on, the resignation ladder, and the exceptions — in plain English, with the article behind each rule. Want the number? The end-of-service calculator does the maths.
How the award accrues (Article 84)
Under Article 84 of the Labor Law (Royal Decree M/51), your end-of-service benefit builds up in two stages: half a month's wage for each of your first five years, and a full month's wage for each year beyond five. Part-years are paid pro-rata. The calculation uses your last wage — the one you were on when you left.
The wage base — broader than the UAE
This is the key difference expats moving between the Gulf states notice. Where the UAE calculates gratuity on basic salary only, Saudi Arabia's statutory definition of wage is broader, generally taking in basic pay plus regular allowances. That makes the Saudi award larger, riyal for riyal, than the equivalent UAE figure on the same headline salary. Some employment contracts narrow what counts, so it's worth confirming what your employer treats as wage.
The resignation ladder (Article 85)
If you resign, Article 85 scales your accrued award by your length of service:
| Service | You receive |
|---|---|
| Under 2 years | Nothing |
| 2 to 5 years | One third (⅓) of the accrued award |
| Over 5 and under 10 years | Two thirds (⅔) |
| 10 years or more | The full award |
One boundary is worth stating plainly, because calculators disagree on it: at exactly five years, the one-third tier still applies. The statute's wording places the 2-to-5 band as "not less than two and not more than five", making the upper edge inclusive — so five years to the day sits in the one-third band, and you need to pass five years to reach two thirds. At exactly ten years, you're in the full-award band.
The exceptions (Article 87)
Some resignations escape the reduction entirely and pay the full award. Article 87 covers a female employee who resigns within six months of marriage or three months of childbirth, and cases where the worker leaves because of force majeure beyond their control. If one of these applies, the resignation ladder is set aside.
Termination and dismissal (Articles 84 & 80)
If your employer terminates you, the resignation ladder doesn't apply at all — you receive the full accrued award under Article 84. The one situation that removes the benefit is a dismissal for a serious cause listed in Article 80, which forfeits it. Because the stakes are high and the grounds are specific, these dismissals are often contested — don't accept a zero figure without advice.
Worked examples
Take a worker on a last wage of SAR 10,000 with eight years of service:
| Scenario | Calculation | Award |
|---|---|---|
| Terminated by employer | (5 × ½ month) + (3 × month) | SAR 55,000 |
| Resigned (5–10y tier, ⅔) | 55,000 × ⅔ | SAR 36,666.67 |
| Resigned at exactly 5 years (⅓) | (5 × ½ month) × ⅓ = 25,000 × ⅓ | SAR 8,333.33 |
When to get advice
This guide and the calculator give you a confident, law-based estimate. But contracts define "wage" differently, Article 80 dismissals turn on specifics, and disputes do happen. For a binding figure, confirm with HRSD, your employer, or a qualified advisor.
Based on Saudi Labor Law (Royal Decree M/51), Articles 80, 84, 85 & 87 — last verified 14 June 2026.
Frequently asked
How is end-of-service benefit calculated in Saudi Arabia?
Half a month's wage for each of the first five years, then a full month's wage for each year after, on your last wage (Article 84). Resignation can reduce it under Article 85.
Does resignation reduce my Saudi EOSB?
Yes, on a sliding scale (Article 85): nothing under two years, one third from two to five, two thirds from five to ten, and the full award at ten years or more.
What wage is Saudi EOSB based on?
Your last wage, which is broader than the UAE's basic-only base — it generally includes basic pay plus regular allowances. Some contracts narrow this, so check yours.
What are the Article 87 exceptions?
A female employee resigning within six months of marriage or three months of childbirth, or anyone leaving due to force majeure, receives the full award despite resigning.
Can my employer refuse to pay end-of-service?
Only in a dismissal for a cause listed in Article 80, which forfeits the award. These are frequently disputed, so seek advice before accepting a zero settlement.
Work out your figure
Put these rules to work on your own wage, dates and exit reason.
Open the end-of-service calculator