FindBest Tools
Saudi Labor Law Arts. 84–88

Saudi End of Service Calculator

مكافأة نهاية الخدمة

Calculate your Saudi Arabia end of service benefit (EOSB) accurately under the Saudi Labor Law. Covers all departure reasons — resignation, termination, and contract expiry — with the correct reduction rules applied automatically. Accurate for both Saudi nationals and expatriate employees.

End of service benefit

SAR 6,670.32

Service period

5 yrs, 26 days

Gross benefit

SAR 20,010.96

Entitlement

Partial (33%)

Employment dates

Salary

SAR

Basic salary only — not total package

Include in calculation base?

By default, EOSB is calculated on basic salary only. Include allowances only if your employment contract explicitly states they form part of the EOSB base.

Reason for leaving

Special cases (full entitlement)

Nationality

Service period

5 yrs, 26 days

Calculation base

SAR 8,000.00/mo

Gross benefit

SAR 20,010.96

Entitlement

1/3 of benefit (2–5 years of service)

Net benefit (SAR)

SAR 6,670.32

Daily salary base

SAR 266.67

Benefit composition

First 5 yrs
Partial
½ mo/yr for first 5 yrs: SAR 16,000.00Partial year: SAR 4,010.96
GOSI / Payment note: As a non-Saudi employee, your EOSB is paid directly by your employer. Your employer is required to maintain a reserve fund or equivalent provision for your EOSB entitlement.
Partial entitlement: 1/3 of benefit (2–5 years of service). Under Article 84 of the Saudi Labor Law, voluntary resignation results in a reduced EOSB. Your gross calculated benefit of SAR 20,010.96 is reduced to SAR 6,670.32.

What is the Saudi end of service benefit?

The end of service benefit (EOSB), known in Arabic as مكافأة نهاية الخدمة (mukāfaʾat nihāyat al-khidmah), is a statutory payment that every employer in Saudi Arabia is legally required to make to an employee upon the termination of their employment. It is governed by the Saudi Labor Law under Royal Decree No. M/51 and its amendments, specifically Articles 84 to 88.

Unlike a pension or savings scheme, the EOSB is a lump sum payment calculated purely on the length of service and the employee's last basic salary. It applies to all private sector employees in Saudi Arabia regardless of nationality — Saudi nationals, Gulf Cooperation Council (GCC) nationals, and third-country nationals (expatriates) are all entitled to EOSB under the same statutory formula. The mechanism of payment differs for Saudi nationals enrolled in the GOSI Muʿāwadha programme, but the underlying calculation is identical.

EOSB calculation formula

First 5 years of service

EOSB = Years × (Basic Salary ÷ 2)

½ month's salary for each completed year. Example: 4 years at SAR 8,000/month = SAR 16,000.

After 5 years of service

EOSB = (5 × Salary/2) + (Extra Years × Salary)

1 full month's salary per year beyond 5. Example: 8 years at SAR 10,000 = SAR 25,000 + SAR 30,000 = SAR 55,000.

Partial years are prorated based on the actual number of days in the incomplete year. The accrual rate for the partial year follows the same rule — half a month per year if total service is under 5 years, or a full month per year if total service exceeds 5 years. The calculation base is the last drawn basic salary — not the total compensation package — unless the employment contract explicitly states otherwise.

Resignation vs termination — the critical difference

The single most impactful variable in any Saudi end of service calculation is the reason for leaving. The Saudi Labor Law applies very different rules depending on whether the employee chose to leave or was required to leave.

Resignation (Article 84) — entitlement by years served

When an employee voluntarily resigns, the EOSB entitlement is scaled based on total years of service. This is one of the most frequently misunderstood aspects of Saudi employment law — many employees assume they are entitled to the full calculated amount, when in fact the resignation rules significantly reduce it for employees with fewer than 10 years of service.

Years of serviceEOSB entitlement% of gross benefitLegal basis
Less than 2 yearsNo entitlement0%Art. 84
2 to less than 5One-third (1/3)33%Art. 84
5 to less than 10Two-thirds (2/3)67%Art. 84
10 years or moreFull benefit100%Art. 84

Termination and other departure scenarios (Article 85)

When employment ends for reasons other than voluntary resignation, the employee generally receives the full calculated benefit. This includes dismissal by the employer without cause, expiry of a fixed-term contract that is not renewed, and retirement. The only exception is termination for gross misconduct under Article 80 — the specific grounds listed in that article (such as assault, theft, or abandonment of work for 20+ days) — which can result in forfeiture of the EOSB.

ScenarioEntitlement% of benefitLegal basis
Termination by employer (without cause)Full benefit100%Art. 85
Fixed-term contract not renewedFull benefit100%Art. 85
RetirementFull benefit100%Art. 85
Death or permanent disabilityFull benefit100%Art. 85
Termination for gross misconduct (Art. 80)No entitlement0%Art. 80
Woman — resignation within 6 months of marriageFull benefit100%Art. 84 (exception)
Woman — resignation within 3 months of childbirthFull benefit100%Art. 84 (exception)

Important notes for expatriate employees

Expatriate (non-Saudi) employees make up a large portion of the Saudi private sector workforce. Their EOSB rights are identical to those of Saudi nationals under the Labor Law — the same calculation formula, the same resignation reduction rules, and the same termination protections apply. The key practical difference is that expatriate employees must receive their EOSB directly from their employer, rather than through GOSI.

Employers are required by law to maintain sufficient reserves to cover EOSB obligations to expatriate staff. If an employer fails to pay the EOSB on termination of employment, the employee can file a labour complaint with the Ministry of Human Resources and Social Development (MHRSD) through the Musaned portal or directly at a labour office. Saudi Arabia has significantly strengthened enforcement of wage and EOSB obligations in recent years, including through the Wage Protection System (WPS).

Frequently asked questions

How is the end of service benefit calculated in Saudi Arabia?+
The Saudi end of service benefit (EOSB) is calculated based on the employee's last drawn basic salary and their total length of service. The accrual rate is half a month's salary per year for the first five years, and one full month's salary per year for each year beyond five. For example, an employee earning SAR 10,000 per month who served exactly 7 years would receive: (5 × 5,000) + (2 × 10,000) = SAR 45,000 gross. If they resigned voluntarily after 7 years (between 5 and 10 years), two-thirds of SAR 45,000 = SAR 30,000 would be payable. Partial years are prorated based on the number of days in the incomplete year.
What is the end of service benefit for resignation in Saudi Arabia?+
Employees who voluntarily resign receive a reduced end of service benefit under Article 84 of the Saudi Labor Law. The reduction depends on total years of service: less than 2 years — no entitlement; 2 to 5 years — one-third of the calculated benefit; 5 to 10 years — two-thirds of the calculated benefit; 10 or more years — full benefit. There are two important exceptions: a woman who resigns within 6 months of her marriage, or within 3 months of childbirth, is entitled to the full benefit regardless of how many years she has served.
Does end of service include housing and transport allowances?+
Under the standard provisions of the Saudi Labor Law, the EOSB is calculated on the basic salary only — not on the total package. Housing allowances, transport allowances, commission, bonuses, and other benefits are excluded from the calculation base unless the employment contract or company policy explicitly states that these components should be included. Always refer to your employment contract. If your contract states that EOSB is based on your 'total salary' or lists specific allowances as part of the calculation base, those amounts should be added.
What is the difference between Article 84 and Article 85 of the Saudi Labor Law?+
Article 84 governs situations where the employee chooses to leave — voluntary resignation and mutual agreement. It applies a sliding reduction scale based on years of service. Article 85 governs situations where the employment ends due to the employer's action or circumstances outside the employee's choice — termination by the employer, expiry of a fixed-term contract, retirement, and death or disability. Under Article 85, the employee receives the full calculated benefit with no reduction, regardless of how many years they have served.
What happens to my end of service if I am a Saudi national enrolled in GOSI?+
Saudi nationals who are enrolled in GOSI (General Organisation for Social Insurance) have their end of service benefit handled through the Muʿāwadha (معاوضة) programme, introduced as part of the Vision 2030 labour reforms. Rather than the employer maintaining a provision for EOSB, contributions are made to GOSI on the employee's behalf. Upon leaving employment, the EOSB is paid through GOSI rather than directly by the employer. The statutory calculation formula remains the same — the mechanism of collection and payment changes. Non-Saudi (expatriate) employees remain under the traditional direct employer obligation.
Can my employer deduct money from my end of service benefit?+
Saudi Labor Law limits what can be deducted from an EOSB. Employers may deduct amounts owed by the employee such as outstanding salary advances, documented loans provided by the employer, damages established by a court or official body, and certain other specific amounts. An employer cannot unilaterally reduce the EOSB for reasons such as performance, notice period violations, or general 'damages' without legal basis. If an employee believes their EOSB has been wrongfully reduced, they can file a complaint with the Ministry of Human Resources and Social Development.
Is end of service benefit taxable in Saudi Arabia?+
Saudi Arabia does not levy personal income tax on wages or employment benefits for individuals. End of service benefits are therefore not subject to income tax for employees working in Saudi Arabia, whether Saudi nationals or expatriates. The EOSB is paid gross with no tax deductions at source. However, expatriates should check whether their home country taxes foreign-sourced income on their return — some countries tax worldwide income regardless of where it was earned.
What is the end of service benefit for an employee terminated without cause?+
An employee who is dismissed by their employer without cause (i.e., not under Article 80 for gross misconduct) is entitled to the full calculated EOSB under Article 85, regardless of how long they have served — even if they served less than 2 years. In addition, they are entitled to a notice period payment (or payment in lieu of notice), which is at least 60 days' salary for indefinite contracts. The employer must also pay all outstanding wages, accrued vacation pay, and any other contractual entitlements.

Disclaimer: This calculator is based on the Saudi Labor Law as amended and publicly available interpretations as of 2024. It is provided for informational purposes only and does not constitute legal advice. Individual employment contracts, company policies, collective agreements, and GOSI programme rules may alter the calculation. The GOSI Muʿāwadha programme rules for Saudi nationals are subject to change. For disputes or complex cases, consult a licensed Saudi labour lawyer or contact the Ministry of Human Resources and Social Development (MHRSD).

More finance tools

All finance tools

Australia Stamp Duty Calculator

Calculate property transfer duty across all 8 states with 2026 rates and concessions.

Australia GST Calculator

Add or remove 10% GST with multi-item invoice and BAS quick-fill helper.

India SIP Calculator

Mutual fund SIP returns with Step-Up SIP, Lumpsum, and SWP modes.

India TDS Calculator

Calculate TDS deductions on salary, interest, and professional services.

Car Depreciation Calculator

Accurate resale value and depreciation curves for 500+ makes and models.

Canada HST/GST Calculator

Calculate sales tax for all 13 Canadian provinces and territories.