Saudi end-of-service calculator

Article 84 of the Saudi Labour Law (Royal Decree No. M/51, as amended) requires the employer to pay an end-of-service award when the work relationship ends: half a month's wage for each of the first five years of service, and one full month's wage for each year after that. The award is calculated on the last wage, and fractions of a year are paid pro-rata.

Example: seven years of service on a wage of SAR 10,000, ended by the employer → (5 × 5,000) + (2 × 10,000) = SAR 45,000.

Unlike the UAE, the Saudi award is not limited to a 'basic' figure: it is calculated on the worker's actual last wage, which under the Labour Law's wage definition includes the fixed, regularly paid components of pay — not just the basic amount. In practice, one-off bonuses and genuinely variable amounts are excluded, while fixed monthly allowances that form part of the agreed wage are commonly included.

For workers paid by commission or piece rate, the calculation uses an average of recent earnings as set by Article 86 of the law. If your pay mixes a fixed wage with variable commission, expect the fixed part plus an average of the variable part to drive the number — and confirm the exact treatment with HRSD (the Ministry of Human Resources and Social Development) or your HR team.

If the worker resigns, Article 85 scales the Article 84 award by service length: less than two years earns nothing; from two to under five years, one third of the award; from five to under ten years, two thirds; and ten years or more, the full award.

Example: resigning after seven years on SAR 10,000 → the full award would be SAR 45,000, and the two-thirds rule pays SAR 30,000. Resigning after three years on SAR 8,000 → full award 3 × 4,000 = SAR 12,000, one third = SAR 4,000.

The full Article 84 award is payable when the employer terminates the contract or a fixed-term contract simply expires. Article 87 adds resignation cases that still pay in full: leaving work due to force majeure, and a female worker who resigns within six months of her marriage or within three months of giving birth.

A worker who leaves because of the employer's serious breach (the Article 81 grounds — e.g. unpaid wages or serious safety failures) is treated as if the employer ended the contract, so the full award applies there too.

Two situations zero the award. First, resignation before completing two years of service (Article 85). Second, dismissal for one of the grave causes listed in Article 80 — such as assault, material dishonesty, forgery of documents, or prolonged unjustified absence — where the law allows the employer to terminate without award, notice or indemnity, subject to the article's due-process conditions.

Outside those cases the award is a statutory entitlement: it cannot be waived in the contract, and it is due to Saudi nationals and expatriates alike, separate from GOSI social-insurance contributions.

Employer termination, 7 years at SAR 10,000 → (5 × ½ × 10,000) + (2 × 1 × 10,000) = SAR 45,000. Resignation after the same 7 years → two thirds = SAR 30,000.

Resignation after 3 years at SAR 8,000 → full award SAR 12,000 → one third = SAR 4,000. Resignation after 12 years at SAR 6,000 → (5 × 3,000) + (7 × 6,000) = SAR 57,000, paid in full because service reached ten years.

HRSD publishes an official calculator, and labour disputes go through the Labour Courts — if the number you are paid does not match the law, you have a claims channel.