When a job in Saudi Arabia ends, the employee is owed an end-of-service award (مكافأة نهاية الخدمة). The amount follows a formula set by the Labour Law, so you can check your employer's figure yourself. This guide explains the formula and walks through real examples. It is general information, not legal advice.
The basic formula (Article 84)
- First five years: half a month's wage for each year of service.
- Every year after five: a full month's wage for each year.
- Part years count in proportion. Seven years and six months is 7.5 years.
The wage used is your last monthly wage, including fixed allowances such as housing and transport, not basic salary alone.
If you resign (Article 85)
When you resign from an open-ended contract, you receive a share of that award based on how long you worked:
| Service | Share of the award |
|---|---|
| Under 2 years | Nothing |
| 2 to 5 years | One third |
| 5 to 10 years | Two thirds |
| 10 years or more | The full award |
If the employer ends the contract, or a fixed-term contract simply runs out, you get the full award. Under Article 87 you also get the full award if you leave because of force majeure, or if a woman ends her contract within six months of marriage or three months of giving birth. Dismissal for one of the reasons in Article 80 (such as assault, fraud or long unexcused absence) removes the award.
Worked examples
Example 1: employer ends the contract after 7 years
Last wage SAR 10,000 (basic 6,000, housing 2,500, transport 1,500).
- First 5 years: 5 × 0.5 × 10,000 = SAR 25,000
- Next 2 years: 2 × 10,000 = SAR 20,000
- Award: SAR 45,000
Example 2: you resign after the same 7 years
Seven years falls in the 5–10 band, so you get two thirds: 45,000 × 2/3 = SAR 30,000.
Example 3: you resign after 3 years 6 months on SAR 8,000
Full award: 3.5 × 0.5 × 8,000 = SAR 14,000. One third for 2–5 years: SAR 4,666.67.
Run your own numbers with the Saudi end-of-service calculator, which shows each step of the sum.
Mistakes that change the amount
- Using basic salary only. Fixed allowances belong in the wage. Ask your employer to explain any calculation on basic alone.
- Forgetting unpaid leave. Long unpaid leave is usually left out of the service period.
- Mixing up resignation and termination. The share applies only when you resign. Check how your exit is recorded on Qiwa.
What changed in 2025?
The Labour Law amendments in force from 19 February 2025 changed how resignations work: they are submitted through Qiwa and the employer has 30 days to respond. They did not change the award formula in Articles 84 and 85.
Frequently asked questions
When must the employer pay the award?
Within one week after the employer ends the contract, and within two weeks after the employee resigns.
Do Saudi nationals and expats get the same award?
Yes. The Labour Law formula applies to employees covered by it regardless of nationality.
Where can I check my exact entitlement?
Ask your employer for the settlement breakdown, check the Ministry of Human Resources services on Qiwa, or call 19911.