Saudi end-of-service award explained

By Zulu Calculator · Updated 12 October 2026 · Gulf jobs

In Saudi Arabia, your end-of-service award (often called EOSB) is half a month's wage for each of your first five years, then a full month's wage for each year after that, worked out on your last wage. Part years are paid in proportion. If you resign, you get only part of it unless you have 10 years or more of service.

This guide explains the rules in plain English, with worked examples. To work out your own figure, use the Saudi end of service calculator.

Who these rules apply to

The award comes from Articles 84 and 85 of the Saudi Labor Law (Royal Decree No. M/51, as amended, with changes in force from February 2025). The official text is published by the Bureau of Experts at the Council of Ministers: laws.boe.gov.sa.

• Covered: private-sector workers under the Labor Law, Saudi and non-Saudi, on fixed-term or indefinite contracts.
• Not covered: domestic workers. Article 7 leaves them out of the Labor Law; they follow the separate Domestic Workers Regulation (see HRSD).

How is end of service calculated in Saudi Arabia?

There are two rates. The first five years earn half a month each. Every year after the fifth earns a full month.

award = ½ × monthly wage × first 5 years + monthly wage × years after 5
if you resign: award × your share (see the table below)

Part years count. Six months is half a year, so it earns half of that year's rate. The calculator counts your service from your joining date to your last working day, both days included.

Which salary counts? Does housing allowance count?

The award is based on your last wage. Article 2 of the law defines the "actual wage" as your basic wage plus the increments and allowances paid for the work, such as housing and transport. So in most cases the award uses basic salary plus fixed allowances.

Some contracts say the award is worked out on basic salary only. What counts as "wage" can depend on your contract, so read it carefully. Commissions are usually left out. The calculator lets you split your pay into basic and allowances and choose "basic only" if that is what your contract says.

If you resign: the Article 85 table

Resigning reduces the award, depending on how long you worked:

When you keep the full award

• Your employer ends the contract, or a fixed-term contract simply finishes.
• You and your employer agree to end it.
• You leave because of force majeure.
• A woman leaves within six months of marrying, or within three months of giving birth (Article 87).
• You leave because your employer broke the contract or treated you unlawfully (Article 81).

If you are dismissed for serious misconduct under Article 80, no award is due.

Worked example 1: employer ends the contract

Sara joined on 1 March 2017. Her last working day was 30 June 2023. That is 6 years and 4 months (6.333 years). Her last wage is SAR 12,000 a month: SAR 8,000 basic, SAR 3,000 housing and SAR 1,000 transport.

• First 5 years: 5 × 6,000 = SAR 30,000
• The 1 year and 4 months after that: 1.333 × 12,000 = SAR 16,000
• Award: SAR 46,000, about 3.83 months of wage

If her contract said the award uses basic salary only (SAR 8,000), the award would be 20,000 + 10,666.67 = SAR 30,666.67. That is why the wage definition matters so much.

If Sara had resigned instead, she is in the 5 to 10 year band and gets two thirds of SAR 46,000, which is SAR 30,666.67.

Worked example 2: resigning just before 5 years

Omar earns SAR 9,000 a month and wants to resign.

One more month of work more than doubles what Omar takes home, from SAR 7,375 to SAR 15,000. If you are close to 2, 5 or 10 years, check the date before you hand in your resignation.

Worked example 3: unpaid leave and Article 77

Unpaid leave does not count as service. If Sara from example 1 had taken 60 days of unpaid leave, her counted service drops to about 6.17 years and her award falls to SAR 44,027.40.

Ended without a valid reason. Under Article 77, if one side ends the contract without a valid reason and the contract does not set an amount, the other side is owed compensation on top of the award:

• indefinite contract: 15 days' wage for each year of service
• fixed-term contract: the wage for the months left on the contract
• never less than two months' wage

If Sara's indefinite contract was ended without a valid reason, she would get 6.333 × 6,000 = SAR 38,000 in compensation, plus her SAR 46,000 award.

Your final settlement: more than the award

When the job ends, the award is only one part of what you are owed. Your final settlement can also include:

• Unused annual leave. You earn at least 21 days of leave a year, rising to 30 days after 5 consecutive years with the same employer (Article 109). Unused days are paid when you leave (Article 111) at your wage ÷ 30. For Sara, 40 unused days at SAR 12,000 ÷ 30 = SAR 400 a day is SAR 16,000. Work out yours with the Saudi leave salary calculator.
• Notice pay, if you are not asked to work your notice period.
• Other money owed, such as unpaid salary or overtime. The Saudi overtime calculator can help with that.
• Minus loans or advances you still owe the employer.

Dues must be paid within one week if the employer ends the contract, or within two weeks if you end it.

Does GOSI replace end of service?

For expats, no. GOSI (the General Organization for Social Insurance) works alongside the award:

• Expats: nothing is taken from your salary. Your employer pays 2% for occupational hazards (work injuries). You do not pay into the pension or SANED, and you get the end-of-service award under the Labor Law.
• Saudi nationals (old system): 9% for the pension plus 0.75% for SANED comes off the salary, 9.75% in all, on basic plus housing, up to a maximum contribution wage of SAR 45,000 a month.

See the full rates, including the new system for Saudis who joined GOSI from 3 July 2024, in the Saudi GOSI calculator. Official details are on GOSI's employer FAQ.

Common mistakes

• Using basic salary when the law uses the full wage. Unless your contract says basic only, housing and transport normally count.
• Forgetting part years. The last part year is paid in proportion. After year 5, four extra months on SAR 12,000 add SAR 4,000.
• Applying the resignation cut when the employer ended the job. The Article 85 cut is only for resignations. A contract that ends, or one you end by agreement, earns the full award.
• Treating 4 years 11 months like 5 years. The bands change on the exact date.
• Counting unpaid leave as service. It is taken off.
• Forgetting leave pay. Unused leave is paid on top of the award, not instead of it.
• Using the UAE or Qatar rule. Each Gulf country is different. For example, the UAE gratuity calculator uses 21 and 30 days a year with a two-year cap, while Saudi Arabia uses half a month and then a full month.

What if your employer disagrees?

1. Ask for the calculation in writing. Ask which wage, which dates and which reason for leaving they used.
2. Compare it with your contract and your own figure from the calculator. Most differences come from the wage (basic or full), the leaving date, or the reason for leaving.
3. Keep your papers: contract, payslips, resignation or termination letter, and any leave records.
4. Contact the Ministry of Human Resources and Social Development (HRSD) through its official channels at hrsd.gov.sa if you cannot agree. Do this soon after you leave, and do not sign a final "full and final" release until you are happy with the amount.

Sources and checks

The award rules on this page come from Articles 2, 77, 80, 81, 84, 85, 87 and 88 of the Saudi Labor Law (Royal Decree No. M/51, as amended). They were checked on 9 October 2026, and Articles 2, 77, 84, 85 and 87 were checked again on 11 October 2026 against the English text of the law. The leave figures (Articles 109 and 111) were checked on 12 October 2026, and the GOSI figures on 11 October 2026 against GOSI's own employer FAQ. Rules can change, so confirm with your employer or HRSD before relying on a figure.

This guide explains the rules in plain English for planning. It is not legal, financial or flight-operations advice; check your contract, the official source linked above, your employer or your operator.