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Saudi Labor Law

End of Service Benefits in Saudi Arabia

مكافأة نهاية الخدمة - Complete Guide 2025

Updated: December 20248 min read

Quick Answer

End of service benefit (EOSB) is calculated as half month's salary for each of the first 5 years, plus one full month's salary for each year after that. The calculation is based on the last basic salary plus housing allowance.

Calculation Formula

1

First 5 Years

0.5 × Monthly Wage × Years of Service

2

After 5 Years

1.0 × Monthly Wage × Years of Service

Resignation Entitlements

Years of ServiceEntitlement
Less than 2 years0% (No entitlement)
2 to 5 yearsOne-third (33%)
5 to 10 yearsTwo-thirds (67%)
10+ yearsFull amount (100%)

Frequently Asked Questions

How is end of service benefit calculated in Saudi Arabia?

End of service benefit is calculated as: half month's salary for each of the first 5 years, plus one full month's salary for each year after that. The calculation is based on the last basic salary plus housing allowance.

When is an employee entitled to full end of service benefit?

An employee is entitled to full end of service benefit when: (1) the employer terminates the contract, (2) the contract expires and is not renewed, (3) the employee resigns after 10+ years of service, or (4) the employee resigns for valid reasons under Article 81.

What is the end of service benefit for resignation in Saudi Arabia?

For resignation: 0% if less than 2 years, one-third if 2-5 years, two-thirds if 5-10 years, and full amount if 10+ years. Female employees resigning within 6 months of marriage or 3 months of childbirth receive full benefits regardless of service length.

Is housing allowance included in end of service calculation?

Yes, the end of service benefit is calculated based on the last 'wage' which includes basic salary plus housing allowance (or 25% of basic if housing is provided in kind). Other allowances like transportation are typically not included.

When must the employer pay end of service benefits?

The employer must pay end of service benefits within one week of the contract ending if the employer terminated, or within two weeks if the employee resigned. Delays may result in penalties and labor complaints.

Need Help Calculating?

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