The basic award (Article 84)
When the employment relationship ends, the employer pays an end-of-service award equal to half a month’s wage for each of the first five years of service and a full month’s wage for each year after that. Part years count in proportion. The award applies to both fixed-term and indefinite contracts, and to Saudi and non-Saudi workers alike.
Unlike the UAE, Qatar and Oman, Saudi Arabia calculates the award on the last actual wage – the basic salary plus regular allowances such as housing and transport. Commissions and similar variable pay may be excluded if the parties agreed so.
Daily wage: SAR 400.00 (monthly ÷ 30)
- 5 yrs × 15 days/yrSAR 30,000.00
- 2 yrs × 30 days/yrSAR 24,000.00
- Estimated entitlementSAR 54,000.00
What changes when you resign (Article 85)
If the worker resigns, the award is reduced according to length of service:
| Service when resigning | Share of the award |
|---|---|
| Less than 2 years | Nothing |
| 2 to 5 years | One third |
| More than 5 and less than 10 years | Two thirds |
| 10 years or more | The full award |
Daily wage: SAR 400.00 (monthly ÷ 30)
- 5 yrs × 15 days/yrSAR 30,000.00
- 2 yrs × 30 days/yrSAR 24,000.00
- Total before adjustmentsSAR 54,000.00
- Resignation share: two thirds× 0.67
- Estimated entitlementSAR 36,000.00
Daily wage: SAR 266.67 (monthly ÷ 30)
- 3 yrs × 15 days/yrSAR 12,000.00
- Total before adjustmentsSAR 12,000.00
- Resignation share: one third× 0.33
- Estimated entitlementSAR 4,000.00
When a resigning worker still gets the full award (Article 87)
Article 87 protects some workers who leave of their own accord. They receive the full award, as if the employer had ended the contract:
- A worker who leaves because of force majeure beyond their control.
- A female worker who ends her contract within six months of her marriage contract.
- A female worker who ends her contract within three months of giving birth.
A worker who leaves because the employer seriously breached the contract or the law (Article 81) – for example by not paying wages – is also treated as entitled to the full award.
When the award can be lost (Article 80)
Article 80 lists serious cases in which the employer may dismiss a worker without an award – for example assaulting the employer or a colleague, serious misconduct, or prolonged absence without a valid reason, after the procedures set out in the law. Employers must follow those procedures; a dismissal that does not fit Article 80 does not remove the award.
Did the 2025 amendments change the formula?
Amendments to the Labor Law came into force on 19 February 2025. They mainly changed the resignation procedure – including a deemed acceptance of a resignation if the employer does not respond within 30 days, with the possibility of postponing it for a limited period. The award formula in Articles 84 and 85 was not changed. Because the resignation date fixes your length of service, it is still worth keeping a written record of when you resigned and when it took effect.
When must the award be paid? (Article 88)
The employer must pay the worker’s dues within one week of the end of the contract. If the worker resigned, the employer has up to two weeks.
Practical tips
- Before resigning, check how close you are to the next threshold (2, 5 or 10 years). A few weeks can change your award from one third to two thirds, or to the full amount.
- Make sure every regular allowance is included in the wage used for the calculation.
- If you are leaving after marriage or childbirth, resign within the Article 87 windows and keep the supporting documents.
- Disputes can be raised through the Ministry of Human Resources and Social Development’s channels and the labour courts.
Calculate your Saudi end-of-service award →
Questions
Do I get end of service if I resign after 1 year in Saudi Arabia?
No. A worker who resigns with less than two years of service is not entitled to the award.
Is the Saudi award based on basic salary?
No. It uses the last actual wage, including regular allowances such as housing and transport.
What do I get if I resign after exactly 5 years?
One third. Two thirds applies only when service is more than five years.