Wathim
Wathim
Get it done for you

Saudi End-of-Service Calculator

Article 84 builds half a month per year for the first five years and a full month per year after. Article 85 then reduces a resignation payout to 0, one-third or two-thirds by tenure bracket. Termination always pays in full.

Last verified: 2026-06

Basic salary plus all fixed allowances (housing, transport). Exclude one-off bonuses.

Reason for leaving

Estimated end-of-service award

SAR 45,000

Full award (termination by employer)

Article 84 accrual on last monthly wage

PeriodRateAmount
Year 10.5 month/yrSAR 5,000
Year 20.5 month/yrSAR 5,000
Year 30.5 month/yrSAR 5,000
Year 40.5 month/yrSAR 5,000
Year 50.5 month/yrSAR 5,000
Year 61 month/yrSAR 10,000
Year 71 month/yrSAR 10,000
Art. 84 raw award (4.50 months)SAR 45,000
Read the Saudi work permit guidePlan the final exit visa next

How Article 84 builds the award

Article 84 of the Saudi Labor Law is the single sentence that builds the end-of-service award for every private-sector worker in the Kingdom. The rule is two-tiered. For each of the first five completed years of service the worker accrues half a month of the last wage. From year six onwards the rate doubles to one full month of the last wage per year. The award is paid as a lump sum at the end of the contract and the wage used in the calculation is the last actual wage on the payslip the day the contract ends, not an average across the tenure. Partial years are prorated by the exact number of days served in the unfinished year, so a tenure of seven years and four months earns the five half-month bands, two full-month bands and a third full-month band scaled to four-twelfths.

The wage base under Saudi labour law is wider than the UAE basic-only rule. Article 2 defines wage as the basic salary plus every fixed allowance paid each month. Housing, transport, telephone, schooling and any other fixed line on the payslip all form part of the base. One-off payments, performance bonuses, overtime hours and sales commissions are excluded. Most expats find that their Article 84 base is 50 to 80 percent higher than their UAE-style basic; the practical effect is a much larger end-of-service number for the same nominal monthly compensation. For the full walkthrough of the Saudi labour-law framework, work permits and Mudad payslip checks, see the Iqama renewal and Saudi labour guide.

Article 85 resignation brackets

Article 85 is the reduction layer. It applies only when the worker resigns. A worker terminated by the employer always receives the full Article 84 award regardless of tenure, and a worker who resigns under force-majeure circumstances under Article 87 also receives the full amount. For voluntary resignations the bracket is determined by completed years of service.

Service durationEntitlement on resignation
Less than 2 yearsZero (no entitlement)
2 to 5 years (inclusive)One-third of Article 84 award
More than 5 but less than 10 yearsTwo-thirds of Article 84 award
10 years or moreFull Article 84 award

The brackets work on completed service rounded down for the bracket test but on prorated service for the underlying Article 84 amount. A worker with 4 years and 11 months of service who resigns sits inside the two-to-five bracket, so the calculated two-and-a-half months of wage (rounded against the partial-year table) is multiplied by one-third. The same worker terminated by the employer would receive the full two-and-a-half months. The gap between resignation and termination in the middle brackets is the single most common dispute that ends up in the Saudi labour court.

What counts as wage for the calculation

The wage base is the last actual wage on the MUDAD payslip immediately before separation. It includes basic plus every fixed monthly allowance. Variable items are excluded: monthly performance bonuses, overtime, commissions and one-off payments do not enter the Article 84 base. Provided housing or transport that is paid in kind should be valued at the figure stated in the contract. A recent pay rise lifts the entire calculation including the first-five-year band, because Article 84 expresses the half-month and full-month accruals against the current wage rather than a backward-looking average. Always cross-check the MUDAD line against your contract before agreeing to a settlement quote.

Worked examples

Example 1: 7 years, SAR 8,000 wage, terminated by employer. Years 1 to 5 give 5 times half a month, that is 2.5 months. Years 6 and 7 give 2 times one month, that is 2 months. Total accrual is 4.5 months times SAR 8,000, which is SAR 36,000. Termination triggers the full Article 84 award so the payout is SAR 36,000.

Example 2: 4 years, SAR 10,000 wage, resignation. Years 1 to 4 give 4 times half a month, that is 2 months. The raw Article 84 figure is SAR 20,000. The worker sits inside the 2-to-5-year bracket on Article 85 so the award is multiplied by one-third. The payout is SAR 6,666.67. The same worker terminated by the employer would have received SAR 20,000.

Example 3: 12 years, SAR 12,000 wage, resignation. Years 1 to 5 give 2.5 months. Years 6 to 12 give 7 months. Total 9.5 months times SAR 12,000, that is SAR 114,000. The worker sits inside the 10+ bracket on Article 85 so the multiplier is 1. The payout is SAR 114,000 in full.

Edge cases and forfeiture

Article 80 dismissal

Article 80 lets the employer dismiss without notice and without the end-of-service award in cases of gross misconduct: assault, deliberate damage, repeated unjustified absence beyond defined limits, breach of trade secrets and similar grounds. The employer must follow the documented disciplinary procedure. The labour court will reinstate the Article 84 award if process was not followed even when the underlying facts are accepted.

Force-majeure resignation

Article 87 lets a worker resign with the full Article 84 award if the employer committed a serious breach: non-payment of wages, sexual harassment, threats against the worker, deception at hiring on a fundamental term. The Article 85 reductions do not apply. The worker must file the resignation with the documented breach to claim the full amount.

Probation

The Article 84 award does not accrue during the 90-day probation period. A worker dismissed inside probation receives only the wage for days worked plus any contractual extras. From day 91 the Article 84 clock starts at the same wage rate and the standard partial-year math takes over.

Old-law contracts

The 2025 Labor Law amendments preserved the Article 84 and 85 formula unchanged. Any HR template that still uses pre-2005 rates or claims a flat one-month-per-year on short-tenure resignations is wrong. Demand the Article 84 + 85 figure with the bracket multiplier above.

How to claim and what to do next

The end-of-service award must be paid within one week of contract end for employer-initiated terminations and within two weeks for resignations. The payment usually clears through MUDAD alongside the final salary and any unpaid leave conversion. If the deadline slips, file at the Labour Office (Maktab Amal) or through the HRSD complaints channel; the case goes to the Labour Court if the employer does not settle in the conciliation window. Keep the MUDAD contract, the last six months of payslips and the resignation or termination letter ready.

If you are leaving the Kingdom after the settlement, time the final exit visa against the payment. Pair the gratuity with the Saudi exit re-entry calculator if you plan to return on the same Iqama, or the GOSI calculator if you want to estimate the social-insurance side of the final payout. For the wider labour-law and Iqama framework, the Iqama renewal guide walks through every related transaction.

Frequently asked

How is end-of-service calculated under Saudi Labor Law?

Article 84 of the Saudi Labor Law sets the accrual at half a month of the last wage for each of the first 5 years of service and a full month of the last wage for every year of service after that. Partial years are prorated on a daily basis. The wage base is the last actual wage, which means basic salary plus all fixed allowances such as housing and transport; one-off bonuses and commissions are excluded. The formula is the same for every private-sector worker covered by the labour law, including expats and Saudis. The Article 85 reduction layer applies only when the worker resigns.

What does Article 85 do to the resignation award?

Article 85 reduces the Article 84 award when the worker resigns based on completed years of service. Less than 2 years of service means zero entitlement on resignation. From 2 to 5 years inclusive the worker receives one-third of the calculated award. More than 5 years but less than 10 years gives two-thirds. From 10 years onward the worker receives the full Article 84 award even on a voluntary resignation. Termination by the employer always pays the full Article 84 amount regardless of tenure. The same applies to force-majeure resignations under Article 87 where the worker leaves due to circumstances outside their control.

Does my housing allowance count for the award?

Yes if the housing allowance is paid as a fixed monthly amount under the contract. The Labor Law definition of wage covers basic salary plus every fixed allowance. Transport, housing, telephone and any other allowance paid every month at a fixed amount form part of the wage base for Article 84 purposes. One-off payments, performance bonuses, overtime and commissions are excluded by ministerial practice. If your housing is provided in kind rather than cash, your contract should specify a notional value, and that figure is the one used.

What is the wage base if I had a recent pay increase?

Article 84 uses the last actual wage at the time of separation, not an average across the tenure. A pay increase a month before leaving lifts the entire calculation, including the first-five-year band, because the half-month and full-month accruals are both expressed against the current wage rate. The wage shown on the last MUDAD-registered payslip is the figure the labour office will use in any dispute.

How does the calculator handle partial years?

Partial years are computed by fraction. Eight months of service after the fifth full year contributes 8/12 of one month of wage (the full-month rate that applies from year 6 onwards). Three months and ten days in year three contributes about 3.33/12 of half a month of wage. The breakdown in the result shows each year line with its rate so you can verify the daily accrual against the payslip directly.

Are there cases where I lose the award entirely?

Yes. Article 80 lists the gross-misconduct grounds where the employer can dismiss without notice and without paying the Article 84 award: assault on the employer, deliberate damage, repeated unjustified absence beyond defined limits, breach of trade secrets and similar offences. The employer must follow the documented disciplinary procedure for the forfeiture to hold up in the labour court. A bare allegation is not enough; the burden of proof sits with the employer.

When must the award be paid?

The end-of-service award must be settled within one week of the contract end date for employer-initiated terminations and within two weeks for resignations. The payment is usually made through MUDAD alongside the final salary, unpaid leave conversion and any notice-period dues. If payment is late, the worker can file at the Labour Office (Maktab Amal) or HRSD and the case proceeds to the Labour Court if the employer does not settle within the conciliation window.

Does the new Labor Law update change anything?

The 2025 amendments to the Saudi Labor Law preserved the Article 84 and 85 formula in its existing form. Some procedural items around probation, notice and maternity changed but the end-of-service accrual rates and the resignation-reduction brackets stayed exactly as written. If you see an HR template that claims a flat one-month-per-year rate for resignations under five years, it is wrong and the Article 85 multipliers above still apply.