End-of-Service Award Calculator under the Saudi Labor Law

How is the end-of-service award calculated?

Article 84 of the Labor Law requires the employer to pay the worker an award for the period of service when employment ends: half a month’s wage for each of the first five years and one month’s wage for each following year, with part-years counted proportionally.

Example: a worker with eight years of service and a last wage of SAR 10,000. First five years: 5 × 5,000 = SAR 25,000. The next three years: 3 × 10,000 = SAR 30,000. The full award is SAR 55,000.

What is due if the worker resigns?

Where employment ends by the worker’s resignation, Article 85 applies these shares of the full award:

• Under two years: no award.
• Two to five years: one third.
• Over five and under ten years: two thirds.
• Ten years or more: the full award.

In the example above, resigning after eight years gives two thirds of SAR 55,000, about SAR 36,667.

When is the full award due even though the worker left?

The full award is due where the worker leaves because the employer breached its essential obligations in the cases set out in Article 81, where the worker leaves due to force majeure, or where a female worker ends the contract within six months of marriage or three months of childbirth, under Article 87.

Which wage is used?

The award is based on the last wage, which usually means the actual wage: basic pay plus fixed allowances such as housing and transport, and possibly other elements depending on the contract. Disputes about what the wage includes are common, so check your contract and payslips before relying on a final figure.

When is no award due?

No award is due where the worker is dismissed under one of the cases in Article 80 of the Labor Law, provided the case is proven and the procedure followed. Many disputes turn on exactly this point.

What if the award is not paid?

Dues must be paid within the statutory periods after employment ends. If they are not, the route starts with amicable settlement through Wadi, then referral to the labor court if settlement fails. A labor claim is not heard after twelve months from the end of employment; you can work out that date with the statutory deadlines calculator, and read more in our end-of-service guide.

Frequently asked questions

How do I calculate the end-of-service award?

Multiply half of the last monthly wage by the years of service up to five, then add a full monthly wage for each year after the fifth, with part-years counted proportionally, under Article 84 of the Labor Law.

Is an award due if I resign before two years?

No. Under Article 85 a resigning worker with under two years of service gets no award; one third is due for two to five years, two thirds for over five and under ten, and the full award after ten years.

Are allowances included?

The award is based on the last wage, which usually includes basic pay and fixed allowances such as housing and transport. Other elements depend on the contract, and the court decides if there is a dispute.

Is the full award due when a fixed-term contract expires?

Yes. If a fixed-term contract ends without renewal, the worker is entitled to the full award under Article 84, as this is not a resignation.

Is the calculator result binding?

No. It is an estimate for guidance and may differ depending on the wage, the reason employment ended and other amounts due. The final entitlement is set by agreement or by the labor court.