The end-of-service award in Saudi Arabia is set by Articles 84, 85 and 87 of the Labor Law. Legal summaries of the 2025 amendments to the law, in force since 19 February 2025, report no change to how the award is calculated.

The rules

First five years: half a month’s wage for each year.
After five years: a full month’s wage for each year.
Part years count in proportion.
It’s based on your last wage: basic pay plus fixed allowances in your contract, such as housing and transport. Commissions and other variable pay can be excluded if your contract says so.

If you resign (Article 85)

Service when you resign	Share of the award
Less than 2 years	Nothing
2 years to under 5	One third
5 years to under 10	Two thirds
10 years or more	All of it

If your employer ends the contract, or a fixed-term contract runs out, you get the full award regardless of length of service.

Worked examples

Monthly wage SAR 10,000, about 7 years’ service. Full award: 5 × ½ month (SAR 25,000) plus 2.01 × 1 month (SAR 20,055) = SAR 45,055. If the employer ended the contract you receive all of it. If you resigned, you receive two thirds: about SAR 30,037.

Same wage, 3 years’ service. Full award: 3 × ½ month = SAR 15,014. After resigning: one third, about SAR 5,005.

Full award despite resigning (Article 87)

You keep the whole award if you leave because of circumstances beyond your control (force majeure). A female employee also keeps the full award if she ends her contract within six months of getting married or within three months of giving birth. Choose “I resigned for a reason in Article 87” in the calculator for these cases.

Who this applies to

Private-sector employees covered by the Labor Law, both Saudi and non-Saudi. Domestic workers and government employees have different rules. If your contract promises more than the law, the contract applies.

Sources

Ministry of Human Resources and Social Development: End of service award

Spotted a figure that's wrong or out of date? Tell us and we'll check it against the source.