Employees in the Saudi private sector are entitled to an end-of-service award (often called EOSB) when their employment ends. The rules are in Articles 84 to 88 of the Saudi Labor Law.
Article 84: the full award
| Service | Award |
|---|---|
| Each of the first 5 years | Half a month’s wage |
| Each year after 5 | One month’s wage |
Part years count in proportion. The award is calculated on the last wage paid.
Which wage?
Unlike UAE gratuity, which uses basic salary only, the Saudi award uses the employee’s actual wage: basic salary plus regular allowances paid monthly, such as housing and transport. Irregular payments, such as one-off bonuses, are usually left out.
Worked examples (full award)
Three years, wage SAR 9,000. 3 × 0.5 × 9,000 = SAR 13,500
Five years, wage SAR 14,000. 5 × 0.5 × 14,000 = SAR 35,000
Twelve years, wage SAR 14,000. First 5 years: SAR 35,000. Next 7 years: 7 × 14,000 = SAR 98,000. Total: SAR 133,000
Six years and six months, wage SAR 10,000. First 5 years: SAR 25,000. Next 1.5 years: SAR 15,000. Total: SAR 40,000
Article 85: when you resign
If the employee resigns, the award is reduced:
| Service | Share |
|---|---|
| Under 2 years | Nothing |
| 2 to under 5 years | One third |
| 5 to under 10 years | Two thirds |
| 10 years or more | Full |
Example. Twelve years at SAR 14,000 (full award SAR 133,000). Resigning gives the full award because service is over 10 years. With seven years’ service and the same wage (full award SAR 63,000), resigning gives two thirds: SAR 42,000.
See resigning in Saudi Arabia for more.
Article 87: the full award despite leaving
The full award is due even when the employee leaves if the contract ends because of force majeure, or a female employee ends her contract within six months of marriage or within three months of giving birth. See Article 87 explained.
Article 88: payment deadline
- Employer ends the contract: pay within one week
- Employee ends the contract: pay within two weeks
Calculate yours
The Saudi end-of-service calculator applies Articles 84, 85 and 87 and shows each step.
Common questions about the wage
| Payment | Usually in the EOSB wage? |
|---|---|
| Basic salary | Yes |
| Monthly cash housing allowance | Yes |
| Monthly transport allowance | Yes |
| Overtime that varies month to month | Usually no |
| Annual bonus | Usually no |
| Commission | Depends on the contract and how regular it is |
Frequently asked questions
What if my wage changed in the last year?
The award is calculated on the last wage.
Does unpaid leave count as service?
Periods of unpaid leave may be excluded from service. Check your records and the employer’s calculation.
What about GOSI?
Social insurance through GOSI is separate from the end-of-service award. Saudi nationals receive GOSI benefits in addition to the award where the law provides.
