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Rights & Labour Law

End of service in Saudi Arabia: the Labour Law formula

HRSD's end-of-service formula (Articles 84 and 85): half a month per year for five years, then a month, and the resignation thirds.

By Gulf Guide

The end-of-service award, called مكافأة نهاية الخدمة, is a lump sum the employer pays when a Saudi employment contract ends. The formula is in the Saudi Labour Law, and HRSD publishes it in plain words. Work it out yourself before you sign a settlement.

The formula (Article 84)

  • Half a month's wage for each of the first five years.
  • One month's wage for each year after five.
  • Based on the last wage received. Part of a year is paid pro rata.

Example, using the formula only: last wage SAR 3,000, seven years of service. Five years × 1,500 = 7,500, plus two years × 3,000 = 6,000. Total SAR 13,500 if the contract ended for a reason other than resignation.

If you resign (Article 85)

  • Less than 2 years: no award.
  • 2 to 5 years: one third of the award.
  • More than 5 and less than 10 years: two thirds.
  • 10 years or more: the full award.

HRSD's awareness guide lists cases where the full award is due even on leaving: force majeure, and a female worker ending the contract within six months of her marriage contract or three months of giving birth.

If you were dismissed without a valid reason

HRSD's FAQ explains Article 77. Unless the contract sets its own amount, an open-ended contract pays 15 days' wage for each year of service, and a fixed-term contract pays the wage for the rest of the term. Either way, it is never less than two months' wage. This is on top of the end-of-service award and pay for unused leave.

Last checked: Oct 2026. Which wage counts, basic or with allowances, depends on your contract and the law's definitions. Ask HRSD if the employer's figure looks wrong. Unpaid dues can be claimed through the labour courts via Najiz.

Leaving for good? Read final exit. Changing jobs? Read Qiwa job transfer.

Common questions

How is end of service calculated in Saudi Arabia?

Half a month's last wage for each of the first five years, then a full month's wage for each later year, pro rata for part years (Labour Law Article 84).

Do I get end of service if I resign?

Nothing under two years, one third from 2 to 5 years, two thirds from more than 5 to under 10, and the full award at 10 years or more (Article 85).

Is the calculation on basic salary?

The law says the last wage. What that includes depends on the contract and the law's definition of wage. Check with HRSD if unsure.

What if the employer refuses to pay?

File a complaint with HRSD. If it is not settled, it goes to the labour court through Najiz.

Does a UAE gratuity rule apply in Saudi Arabia?

No. Each country has its own law. For the UAE see UAE gratuity rules.

Sources

Fees and fines change. If a number is not on the official page linked above, treat it as unchecked. Read the disclaimer.