How the end-of-service benefit is calculated
The calculation follows the Saudi Labor Law issued by Royal Decree M/51, as amended by Royal Decree M/44 of 1446H, effective 19 February 2025. The base rule sits in Article 84:
- 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, and there is no cap on the award.
The wage base is the last actual wage: basic salary plus fixed, regular allowances (housing, transport, and similar) per Article 2.
Resignation changes the fraction — Article 85
| Tenure at resignation | Entitlement |
|---|---|
| Under 2 years | No award |
| 2 years through exactly 5 years | One third |
| More than 5 and less than 10 years | Two thirds |
| 10 years or more | Full award |
Cases where the full award survives leaving work
Article 87 restores the full award where the worker leaves due to force majeure, or where a female employee resigns within six months of marriage or within three months of childbirth. Article 81 likewise preserves the full award for a worker who leaves for defined employer-breach reasons, such as failure to honor essential contractual obligations.
Cases with no award
Article 80 lists cases where the contract ends without an award and without notice — narrow grounds that the employer bears the burden of proving. The same effect applies to termination during the statutory probation period.
Details that move the number
- Unpaid leave days are deducted from tenure before the tier thresholds — which can drop a tenure below the five-year or two-year lines.
- Payment deadline per Article 88: one week when the employer ends the relationship or the contract expires; two weeks when the worker ends it.
- The calculator above shows the full breakdown — tiers, applied fraction, and the governing article — so the figure can be checked line by line and compared with the official calculator.