How the End of Service Calculator Saudi Arabia Works
The end of service calculator Saudi Arabia employees rely on is designed around one idea: your end of service benefit (EOSB), sometimes called gratuity or indemnity, should take seconds to estimate, not hours of manual math. Enter your employment start date, your last working day, and your basic monthly salary in Saudi Riyals, then choose whether you resigned or your contract was terminated by the employer. The end of service calculator instantly applies the rules of the Saudi Labor Law and shows your estimated award with a full breakdown.
Our end of service calculator measures your service in calendar days and converts them to years by dividing by 365, so partial years are pro-rated fairly. That means two years and seven months of service is calculated as roughly 2.58 years, and every day you worked counts toward the final figure. The method mirrors how most HR departments and the Ministry of Human Resources and Social Development (HRSD) approach end of service calculations in practice.
Article 84 of Saudi Labor Law: Termination Benefits
Article 84 of the Saudi Labor Law is the foundation of every end of service calculator. When the employment relationship ends — whether the employer terminates the contract, a fixed-term contract expires, or the employee reaches retirement — the worker is entitled to half a month's wage for each of the first five years of service, and a full month's wage for every year after the fifth year. The end of service calculator applies these two tiers automatically and shows each component separately.
For example, an employee who served seven years earns five half-month awards (2.5 months of salary) for the first tier, plus two full-month awards for the second tier, totaling 4.5 months of basic salary. Article 84 also requires pro-rating for fractions of a year, which is exactly what this end of service calculator does when it converts your days of service into a decimal year figure.
Article 85 of Saudi Labor Law: Resignation Rules
Resignation changes the math, and a good end of service calculator must handle it. Under Article 85 of the Saudi Labor Law, an employee who resigns receives nothing if their service is shorter than two years. Between two and five years of service, the resigning employee is entitled to one third of the full Article 84 award. Between five and ten years, the entitlement rises to two thirds of the award. Only after ten full years of service does a resigning employee receive the complete end of service benefit.
When you select resignation in the end of service calculator above, the tool first computes the full Article 84 award, then applies the correct Article 85 fraction based on your years of service. The breakdown card shows the full award alongside the reduction that applies, so you can see exactly how the final number was reached. Note that certain resignation scenarios, such as leaving due to force majeure or specific protections for female workers around marriage and childbirth, can still qualify for the full award under Article 87 — always check the official text for exceptions.
Is EOSB Calculated on Basic Salary or Gross Salary?
One of the most common questions about any end of service calculator is which salary figure to use. Article 84 refers to the last wage, and the prevailing HRSD guidance interprets the wage for end of service purposes as the basic salary plus fixed allowances such as housing and transportation, while excluding variable pay like commissions, bonuses, and overtime. In practice, many employers calculate on basic salary alone.
The end of service calculator above shows both figures side by side: enter your basic salary and any fixed allowances in the optional fields, and it computes a basic-salary result and an actual-wage result (basic plus housing, transport, and other fixed allowances) so you can compare them directly. The difference can be significant over a long career, and your final settlement should follow the definition of wage in your contract and the latest HRSD interpretations.
Worked Example Using the End of Service Calculator
Imagine an employee named Ahmed who started work on 1 March 2016 and left on 1 March 2024, a full eight years of service, with a basic monthly salary of 8,000 SAR. If Ahmed's contract was terminated by the employer, the end of service calculator works as follows: the first five years earn half a month each, which is 5 × 4,000 = 20,000 SAR. The remaining three years earn a full month each, which is 3 × 8,000 = 24,000 SAR. His total end of service award is 44,000 SAR.
Now suppose Ahmed resigned instead. With eight years of service, Article 85 grants him two thirds of the full award, so the end of service calculator returns 44,000 × 2/3 ≈ 29,333 SAR. Had Ahmed resigned after only three years, he would receive one third: the full award at three years is 3 × 4,000 = 12,000 SAR, so his benefit would be about 4,000 SAR. And if he resigned at 18 months, the award would be zero. You can reproduce every one of these scenarios in seconds with the end of service calculator above.
When and How End of Service Benefits Are Paid
Under Article 88 of the Saudi Labor Law, the employer must settle all dues, including the end of service award, within one week when the employer ends the contract, and within two weeks when the employee resigns. The end of service calculator gives you the figure to expect; the law gives you the deadline to expect it by. Employers typically include the award in the final settlement along with accrued leave pay and any outstanding salary.
Keep in mind that the end of service benefit is not subject to GOSI deductions or income tax in Saudi Arabia, so the figure shown by the end of service calculator is generally the net amount you should receive. Domestic workers have separate rules under the domestic labor regulations, and some free-zone or special economic arrangements may differ.
Private vs Government Sector: Which Rules Apply to You
Not every worker in Saudi Arabia is covered by the same system when service ends. Employees of private companies and establishments are governed by the Saudi Labor Law, specifically Articles 84 and 85, which regulate the end of service award — and those two articles are exactly what this calculator applies. Employees of government bodies covered by the Civil Service Law follow their own retirement and end-of-service rules instead, and the calculation differs fundamentally, so the results of this calculator do not apply to them.
Note that an establishment’s rating in the Nitaqat program (Platinum, Green, Yellow, Red) does not change the award formula itself; entitlement is governed by the Labor Law alone. The rating is, however, a useful indicator of how compliant an employer is with labor and residency regulations — worth checking if you are an expatriate weighing a job offer or anticipating a dispute.
| Aspect | Private Sector | Government Sector |
|---|---|---|
| Governing law | Saudi Labor Law (Articles 84 and 85) | Civil Service Law and Civil Retirement Law |
| Calculation basis | Half a month’s wage per year for the first five years, then a full month’s wage per year | Gratuity or pension based on credited years of service under the civil system |
| Effect of resignation | Award reduced to one-third or two-thirds depending on tenure (Article 85) | Different rules set by civil service and retirement regulations |
| Nitaqat rating | Does not affect the award amount, but signals employer compliance | Not applicable |
Resignation Reduction: Three Tiers with Worked Examples
Article 85 of the Saudi Labor Law states that an employee who resigns receives the full award only after ten years of service. If your service is under two years, you receive nothing. If it reaches two years but not five, you receive one-third of the award. If it exceeds five years but is short of ten, you receive two-thirds. At ten years or more, the award is paid in full even when you resign.
Worked example 1: an employee earning a basic salary of SAR 8,000 resigns after four full years. The full award before reduction would be 4 years × half a month × 8,000 = SAR 16,000. Because the service falls between two and five years, only one-third is due: 16,000 ÷ 3 = SAR 5,333.33.
Worked example 2: an employee earning a basic salary of SAR 12,000 resigns after seven years. The full award is 5 × 6,000 = SAR 30,000 for the first five years plus 2 × 12,000 = SAR 24,000 for the next two, totaling SAR 54,000. Because the service is between five and ten years, two-thirds is due: 54,000 × 2 ÷ 3 = SAR 36,000.
The award is also paid in full if the employee leaves because of force majeure, and a female employee receives it in full if she ends the contract within six months of her marriage or three months of giving birth, as provided by the Labor Law.
Article 77: Compensation for Arbitrary Dismissal
If your employer ends the contract without a legitimate reason, that is arbitrary dismissal — and it triggers a separate compensation that is paid on top of the end of service award, not instead of it. Article 77 of the Saudi Labor Law sets the compensation for indefinite-term contracts at fifteen days’ wage for each year of service, while for fixed-term contracts it is the wages for the remaining period of the contract. In both cases the compensation cannot be less than two months’ wage.
Worked example: an employee on an indefinite-term contract earning a basic salary of SAR 9,000 is dismissed without legitimate reason after six years. The daily wage is 9,000 ÷ 30 = SAR 300, and the compensated days are 6 years × 15 days = 90 days, so the compensation is 90 × 300 = SAR 27,000 — paid in addition to the end of service award calculated under Article 84.
To support an arbitrary-dismissal claim, keep the termination letter and any related correspondence. You can file a complaint with the labor office and then escalate to the labor court if an amicable settlement fails. Note that the calculator above shows the end of service award only; Article 77 compensation depends on the circumstances and contract type of each case.
Partial Years: What If You Worked 3 Years 7 Months?
Periods shorter than a full year are not discarded. Article 84 explicitly grants the award for fractions of a year in proportion to the time worked. The practical rule is simple: convert months to a fraction of a year by dividing by 12, and days by dividing by 365, then apply the half-month or full-month rate depending on where that fraction falls within your service.
Worked example 1: service of three years and seven months with a basic salary of SAR 10,000. The duration in years is 3 + (7 ÷ 12) = 3.583 years, all within the first five years, so the award is 3.583 × half a month × 10,000 = SAR 17,916.67.
Worked example 2: service of six years and three months with a basic salary of SAR 10,000, terminated by the employer. The first five years give 5 × 5,000 = SAR 25,000. The remaining one year and three months — 1.25 years — is paid at a full month per year: 1.25 × 10,000 = SAR 12,500. The total is SAR 37,500.
Wage Components: What Counts and What Doesn’t
Article 2 of the Saudi Labor Law defines the actual wage as the basic wage plus all other due increments paid in return for the work, while the basic wage is the amount agreed in the contract without allowances. Article 84 bases the award on the last wage, and the prevailing practice in most establishments is to calculate it on the last basic salary, although some employers include fixed allowances such as housing in the calculation under their own policies or labor court rulings.
What usually does not count: variable commissions, sales percentages, non-periodic bonuses, in-kind benefits, and anything paid as a grant. For an accurate estimate, enter the basic salary exactly as it appears in your employment contract or payslip, add any fixed housing, transport, or other allowances in the optional fields, and check your employer's policy on which wage basis your settlement will follow.
Once you have estimated your award, you may also want to price purchases or invoices with tax included — try the free VAT calculator, or head back to the homepage to browse the other Saudi tools.
Methodology & Sources
Every formula on this page traces to the official text of the Saudi Labor Law and HRSD guidance. The table below shows the source, effective date, last verification date, how this calculator implements the rule, and the limits of that implementation.
| Official Source | Effective Date | Last Verified | Calculation Treatment | Limitation |
|---|---|---|---|---|
| Saudi Labor Law, Articles 84 & 85 (via HRSD, hrsd.gov.sa) | Royal Decree No. M/51, 23/8/1426H (September 2005), as amended | October 2026 | EOSB = half-month wage per year for the first 5 years plus full-month wage per year after; resignation tiers per Article 85; results computed for both basic salary and actual wage (basic + fixed allowances) | Which wage basis applies depends on your contract and employer policy; HRSD and the labor courts are the final authority |
| Saudi Labor Law, Article 77 | Same royal decree | October 2026 | Explained in the article text only — not part of the calculator output | Case-specific; depends on contract type and dismissal circumstances |
| Saudi Labor Law, Articles 87 & 88 | Same royal decree | October 2026 | Referenced in explanatory text (full-award exceptions; settlement deadlines) | Not calculated by the tool |
Disclaimer and Official Sources
This end of service calculator is an educational estimation tool, not legal advice. Labor law outcomes depend on your contract, your employer's policies, and the official interpretation of the Saudi Labor Law at the time of settlement. Before making financial decisions, verify your result with your HR department, consult the official text of the law through the Ministry of Human Resources and Social Development (hrsd.gov.sa), or seek advice from a licensed legal professional in the Kingdom.