RIYADH: The Saudi end-of-service benefit provides half a month’s final wage for each of the first five years of employment and one month’s wage for every subsequent year under Article 84.
Fractions of a year are calculated proportionally, and the employee’s last wage before the employment relationship ends forms the basis for the gratuity calculation.
An employee completing five years of service would therefore receive a basic award equivalent to 2.5 months of the final wage.
Different entitlements apply when a worker resigns voluntarily. Employees with less than two years of service generally receive no award under the resignation provisions.
Workers resigning after two to five years receive one-third of the calculated gratuity. Those leaving after more than 5 but less than 10 years receive two-thirds of the award, while employees completing 10 years or more qualify for the full award.
The full entitlement may also apply in certain exceptional circumstances, including force majeure beyond the worker’s control. A female employee may qualify for the full benefit if she leaves within six months of marriage or three months after giving birth, subject to the applicable legal provisions.
Employers must generally settle wages and other dues within one week of termination of employment, or within two weeks of the employee’s termination of the contract.
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Saudi Arabia’s Ministry of Human Resources and Social Development also provides an official online service for calculating expected end-of-service benefits.
The rules apply to expatriate employees covered by the Saudi Labour Law, including Pakistani workers employed in the Kingdom.
