Interactive Tool
Saudi Arabia End-of-service award
Estimate based on Saudi Labour Law (Royal Decree M/51), Articles 84-87. Actual amounts depend on contract terms, leave taken, unpaid wages, and other adjustments. Consult your employer's HR or a licensed labour lawyer for your specific situation.
Use this free calculator to estimate your Saudi Arabia end-of-service award. Enter your monthly wage (basic salary plus regular allowances) and length of service for an instant estimate based on Saudi Labour Law (Royal Decree M/51), Articles 84-87.
How Saudi Arabia end-of-service award is calculated
Saudi Arabia provides an end-of-service award to employees who complete at least one year of service, calculated on their full wage (basic plus regular allowances), not basic salary alone.
Rules under Saudi Labour Law (Royal Decree M/51), Articles 84-87
- Minimum 1 year of continuous service to qualify on termination
- Minimum 2 years to qualify on resignation
- First 5 years: half-month wage per year of service
- Years 5 and above: one-month wage per year of service
- Base is wage (Article 2): basic + commission + regular allowances. Not basic salary alone
- Resignation 2-5 years: 1/3 of calculated award
- Resignation 5-10 years: 2/3 of calculated award
- Resignation 10+ years: full award
- Termination by employer or end of fixed-term contract: full award
What counts as wage (basic salary plus regular allowances) in Saudi Arabia?
Saudi labour law calculates the end-of-service award on "wage" as defined in Article 2 - basic salary plus commission and any regular, non-discretionary allowances (housing, transport, etc.). One-off bonuses and irregular reimbursements are excluded. This is wider than basic salary, and is the most common mistake non-Saudi calculators make.
If your employment contract bundles a single salary figure with no separate basic/allowance breakdown, ask HR to confirm in writing how the wage (basic salary plus regular allowances) will be calculated for end-of-service purposes before you sign.
Worked example
An employee with a basic salary of SAR 8,000 and regular allowances of SAR 4,000 (total wage SAR 12,000) terminated by the employer after 8 years:
| Wage base (Article 2) | SAR 8,000 + SAR 4,000 = SAR 12,000/month |
| First 5 years | 5 × (SAR 12,000 / 2) = SAR 30,000 |
| Remaining 3 years | 3 × SAR 12,000 = SAR 36,000 |
| Total award | SAR 66,000 |
Important: a basic-salary-only calculation here would understate the entitlement by SAR 22,000. Saudi law uses the full wage, not basic alone.
Frequently asked questions
Official source
For the full legal text, see: Saudi Labour Law (Royal Decree M/51), Articles 84-87.
This page is general information, not legal advice. For your specific contract, consult a licensed labour lawyer or the relevant ministry.