Yes — resignation can reduce your end-of-service benefit, and it eliminates it entirely if you resign before completing two years. The governing framework is the Labor Law issued by Royal Decree M/51, as amended by Royal Decree M/44 of 1446H, effective 19 February 2025: Article 84 sets how the base award is calculated, Article 85 sets the fraction a resigning worker receives by tenure, and Article 87 carves out cases where the full award is paid even though the worker left. This page is general legal information, not legal advice.

The base rule first: the Article 84 calculation

Before any fraction applies, the full award is calculated on the last actual wage:

  • Half a month's wage for each of the first five years.
  • A full month's wage for each year beyond the fifth.
  • Fractions of a year are paid proportionally to time served.

This full formula applies when the contract expires or the employer ends it, unless a specific statutory ground disqualifies the worker or changes the outcome. More background in the labor section.

The Article 85 table: the resigning worker's fraction

When the worker ends the contract by resigning, the full award converts to a fraction based on tenure:

| Tenure at resignation | Entitlement | | --- | --- | | Under 2 years | No award | | 2 to 5 years | One third | | Over 5 but under 10 years | Two thirds | | 10 years or more | Full award |

Note that the fraction applies to the full award computed under Article 84, not to the wage directly.

Verified worked examples

Example 1 — resignation after 4 years, actual wage SAR 9,000:

  • Full award before the resignation effect: 9,000 × half a month × 4 years = SAR 18,000.
  • Tenure falls between two and five years, so the worker receives one third: SAR 6,000.

Example 2 — resignation after 8 years, actual wage SAR 12,000:

  • First 5 years: 12,000 × half a month × 5 = SAR 30,000.
  • Next 3 years: 12,000 × 3 = SAR 36,000.
  • Full award: SAR 66,000; the resigning worker receives two thirds: SAR 44,000.

Example 3 — resignation after 10 years: the worker receives the full award with no reduction.

To check your own figure with your tenure and actual wage, use the end-of-service calculator and compare the result with the Ministry of Justice's official calculator.

Article 87 exceptions: full award despite leaving

The law preserves the full award in defined cases even where the worker ends the contract:

  • The relationship ends due to force majeure beyond the worker's control.
  • A female worker ends the contract within six months of her marriage.
  • A female worker ends the contract within three months of childbirth.

In these cases the one-third/two-thirds fractions do not apply, and the award is calculated in full under Article 84.

Resignation versus termination

Resignation is not the only way the relationship ends, and the effect differs by cause:

  • Contract expiry or employer termination: full award under Article 84.
  • Resignation: the Article 85 fractions in the table above.
  • Article 80 dismissal: defined cases where the contract ends without an award, with the burden of proof on the employer.
  • Unlawful termination by the employer: does not touch the award; compensation under Article 77 and notice pay may be added depending on the case.

After the relationship ends, Article 88 sets the settlement deadline: one week when the employer ends the contract or it expires, and no more than two weeks when the worker ends it.

When do you need a licensed lawyer?

The rules above cover the general framework, but some situations turn on case-specific facts, including:

  • Disputes over how the ending is characterized: a genuine resignation, or an employer termination dressed up as one?
  • Disputes over the components of the actual wage the award is computed on (allowances, commissions, benefits).
  • An employer invoking Article 80 or applying deductions to final entitlements.
  • A resignation tied to circumstances that may fall within the Article 87 exceptions and require proof.

In these situations, the Labor Court examines the facts and documents. The statutory path normally starts with a complaint and amicable settlement via the Qiwa platform before referral to the court, and a review by a licensed lawyer helps assess the file before any step.