End-of-service pay in Saudi Arabia, with a worked example

Why you’d do this

When a job in Saudi Arabia ends, the end-of-service award is often the largest single payment you will receive, and it is the one people understand least. Employers quote a number, you cannot tell how they got there, and the rules change depending on how long you worked and why you are leaving. Working it out yourself before you sit down for the final settlement lets you ask better questions and spot a figure that looks off.

This guide shows the arithmetic behind the End-of-service award tool, one worked example from start to finish, and where the estimate stops being reliable. It is an estimate based on the Saudi Labor Law, not legal advice.

How, with the named tool

The rule in plain words. Under Article 84 the base award is half a month’s wage for each of the first five years of service, and a full month’s wage for each year after that. A partial year counts in proportion. Article 85 then decides how much of that base you receive when you resign, and the answer depends on how long you served.

Entering it.

1. Monthly wage (SAR). Enter the wage as the law defines it. The tool’s hint says this is typically basic pay plus regular allowances, and that when you are unsure you should use the gross figure.
2. Start date and End date. Pick both dates, or tick Enter dates as Hijri to use the Hijri pickers instead.
3. Why is the job ending? Choose one of the five reasons: “My employer ended my contract”, “The fixed-term contract expired”, “I resigned”, “I left for a reason the law recognizes / force majeure”, or “Female worker leaving within 6 months of marriage or 3 of childbirth”.
4. Read the award. Your award appears with its workings: First 5 years — half a month per year, After 5 years — a month per year, Service length and Entitlement multiplier.
5. Copy it. Copy summary (WhatsApp-ready) puts the whole breakdown on your clipboard.

The resignation multiplier. For the four reasons other than resignation, the multiplier is full. For “I resigned”, the tool applies the Article 85 fractions to the base award:

• under 2 years of service: nothing;
• 2 years up to and including 5 years: one third;
• over 5 and under 10 years: two thirds;
• 10 years or more: the full amount.

The boundaries are not symmetrical. Exactly 5 years gets one third, and exactly 10 years gets the full award.

One fully worked example. Suppose your monthly wage is 8,000 SAR, you started on 1 March 2019 and finish on 1 March 2026, which is exactly 7 years.

• First 5 years: 5 × 0.5 = 2.5 months of wage, which is 20,000 SAR.
• The 2 years after that: 2 × 1 = 2 months of wage, which is 16,000 SAR.
• Base award: 2.5 + 2 = 4.5 months × 8,000 = 36,000 SAR.

If your employer ended the contract, the multiplier is full and you are owed that 36,000 SAR. If you resigned after the same 7 years, you fall in the “over 5 and under 10” band, so the multiplier is two thirds: 36,000 × 2/3 = 24,000 SAR.

Now change the dates so service is 7 years and 6 months, which is 7.5 years. The first five years still give 2.5 months, and the 2.5 years beyond give 2.5 months, so the base is 5 months × 8,000 = 40,000 SAR. The partial year is counted by days between anniversaries, not rounded.

For a shorter case, 4 years of service with the same wage gives 4 × 0.5 = 2 months, or 16,000 SAR as a base. After resignation, one third applies: about 5,333 SAR.

Where Salary Countdown fits. Salary Countdown does not calculate your award. It is for the neighbouring question of when your next salary lands, which helps you plan your last month. Choose Day of month, Last working day or Nth working day, pick Pay earlier or Pay later for Friday and Saturday paydays, and tick Account for Saudi public holidays. It lists the next six paydays, each tagged Exact, Weekend, Holiday or Approximate.

What to watch for

This is an estimate. The tool’s own caveat is that it is an estimate under the Saudi Labor Law, and that your contract or a court may differ. It is informational, not legal advice. A contract can be more generous than the statute, and a dispute can end up in front of a labour court.

The wage figure drives everything. If you enter basic pay but the legal wage includes regular allowances, the award is understated. If you enter a figure that includes one-off bonuses, it is overstated. Check your contract and payslips.

Reason matters. Picking “I resigned” when the contract actually expired, or the other way round, changes the multiplier. If your reason is disputed, the estimate will be too.

Dates matter at the boundaries. The multiplier steps at 2, 5 and 10 years, so a few days either side of those marks can change the result by a large amount. Double-check start and end dates, including the Hijri option if your documents use it.

Salary Countdown is also an estimate. Its framing is that these are estimates based on common practice, your employer’s actual payday may differ, and it is not a guarantee. Eid windows that have not been announced are derived from the Hijri calendar and tagged Approximate. Settings are saved on your device only.

FAQ

Does the award change if I resign?

Yes. After at least 2 years, resigning gives one third of the base award up to 5 years, two thirds from over 5 up to under 10 years, and the full amount from 10 years. Under 2 years, resigning gives nothing under this calculation. The other four reasons in the tool use the full multiplier.

Does a partial year count?

Yes. The tool measures service in years and fractions, so 7 years and 6 months is 7.5 years. The extra half year is paid at the rate for the band it falls in.

Can I rely on this number in a dispute?

Use it to prepare and to ask questions. It is an estimate, your contract or a court may reach a different figure, and for anything contested you should get proper legal advice.