End-of-Service Benefits in Saudi Arabia: Complete Calculation Guide
End-of-Service Benefits in Saudi Arabia: Complete Calculation Guide
End-of-service benefits (gratuity / مكافأة نهاية الخدمة) are money your employer owes you when your employment ends. The amount depends on how long you worked, your last salary, and how the contract ended.
Legal Basis
Articles 84-86 of the Saudi Labor Law cover the calculation formula, who qualifies, and payment deadlines.
The Formula
Everything is based on your last basic salary:
First 5 years of service
- Half a month's salary per year
(Last Salary / 2) x Years
Years beyond 5
- Full month's salary per year
(Last Salary) x Additional Years
Worked Example
Employee with 8 years of service, last salary SAR 10,000:
| Period | Calculation | Amount |
|---|---|---|
| First 5 years | (10,000 / 2) x 5 | SAR 25,000 |
| Remaining 3 years | 10,000 x 3 | SAR 30,000 |
| Total | SAR 55,000 |
How Much You Get Depends on How You Left
Employer terminated you (Article 84)
You get the full benefit, no matter how long you worked.
You resigned (Article 85)
- Under 2 years: Nothing
- 2 to 5 years: One-third of the full benefit
- 5 to 10 years: Two-thirds of the full benefit
- Over 10 years: Full benefit
Exceptions That Give You the Full Amount
Even with a short tenure, you get 100% if:
- You are a female employee who resigns within 6 months of marriage or 3 months of childbirth
- A force majeure situation forced you to leave
- Your contract expired and was not renewed
What Counts as "Last Salary"?
Your last basic salary plus:
- Housing allowance
- Transportation allowance
- Any regular, fixed allowances
Variable bonuses and one-time payments are usually excluded.
Payment Deadline
Your employer must pay within one week of the contract ending. Late payment can lead to penalties.
GOSI and End-of-Service
If your employer participates in GOSI (General Organization for Social Insurance), their pension contributions may partially offset the gratuity obligation. This overlap can get complicated, so consider getting professional advice if the numbers seem off.
Quick Answers
Are part-time employees eligible? Yes. Benefits are pro-rated based on actual working hours.
What if I am terminated during probation? No benefit. Probation-period terminations do not qualify.
Can the employer deduct from my benefit? Yes. Outstanding loans or damages owed to the employer can be deducted from your gratuity.
Want to calculate your exact amount? Ask Saudi HR and our AI assistant will run the numbers for your specific situation.