Saudi annual-leave entitlement
The Saudi Labour Law sets paid annual leave at 21 calendar days per year for the first five years of service. Once a worker has completed five continuous years with the same employer, the entitlement rises to 30 calendar days per year. The current or final partial year is always pro-rated by the months served: six months into a 21-day year gives 10.5 days, while six months into a 30-day year gives 15 days. The calculator above applies this pro-rata to any service figure you enter.
How unused-leave encashment is calculated
When you leave the company, any annual leave accrued and not taken is paid out. The formula is the full monthly wage divided by 30 to get a daily wage, multiplied by the number of unused days. Unused days are the leave accrued in the current or final year minus the days you have already taken, floored at zero. The single most important point in Saudi Arabia: this encashment is calculated on the full wage, not basic salary alone.
Full wage vs basic only
This is the key country-specific rule. In Saudi Arabia leave encashment is paid on the full wage, meaning basic salary plus the allowances that form your contractual pay. That is different from the UAE, where unused-leave encashment is calculated on basic salary only. For a worker with a large allowance component, the Saudi full-wage base produces a noticeably higher encashment than the same person would receive under the UAE basic-only rule. Always confirm which allowances are treated as part of the wage in your Qiwa and Mudad contract records.
Notice-period rules
For indefinite-term, monthly-paid contracts the employer must give 60 days notice, while the employee must give 30 days notice. The employee notice was reduced to 30 days in 2025. Notice pay is settled on the wage for the days served and is treated separately from leave encashment. Leave keeps accruing during the notice period because it counts as service, so the final encashment includes any days earned across the notice run.
Worked examples
Example 1: 2 years 6 months, SAR 10,000 full wage, 0 days taken. The worker has under five years, so the 21-day rate applies. The final 6-month partial year accrues 10.5 days (21 days pro-rated by 6 of 12 months). With 0 days taken, all 10.5 days are unused. Daily wage is SAR 333.33, so encashment is 10.5 times SAR 333.33, which is about SAR 3,500.
Example 2: 6 years, SAR 12,000 full wage, 5 days taken. Over five years, the 30-day rate applies. A full final year accrues 30 days. With 5 days taken, 25 days remain unused. Daily wage is SAR 400, so encashment is 25 times SAR 400, which is SAR 10,000.
| Service into current year | Rate | Accrued leave days |
|---|---|---|
| 6 months (under 5 years) | 21/yr | 10.5 |
| 12 months (under 5 years) | 21/yr | 21 |
| 6 months (after 5 years) | 30/yr | 15 |
| 9 months (after 5 years) | 30/yr | 22.5 |
| 12 months (after 5 years) | 30/yr | 30 |
The scenarios below show how the same inputs you would type into the calculator turn into an encashment figure. Each one applies the Saudi full-wage base, the 30-day divisor, and the rate that fits the years of service: 21 days a year under five years and 30 days a year once five years are complete.
| Scenario (service / full wage / days taken) | Unused days | Encashment |
|---|---|---|
| 2y 6m / SAR 10,000 / 0 taken | 10.5 | about SAR 3,500 |
| 6y / SAR 12,000 / 5 taken | 25 | SAR 10,000 |
| 4y 9m / SAR 9,000 / 6 taken | about 9.75 | about SAR 2,925 |
How Saudi leave encashment compares across the GCC
The headline rule that sets Saudi Arabia apart is the pay base: encashment is paid on the full wage, meaning basic salary plus the allowances that form your contractual pay. The other Gulf states each define the base differently. The UAE pays on basic salary only, and so does Qatar. Bahrain uses basic salary plus the social allowance. Oman pays on the gross salary. Kuwait uses basic plus regular allowances but divides by a 26-day divisor rather than 30, which lifts the daily rate. Because of this, a worker with a large allowance component is usually paid more per unused day in Saudi Arabia than under the UAE basic-only rule. To see the contrast directly, run the UAE leave salary calculator alongside this one, and check the GCC paperwork cost and processing-time index for the wider cost picture when you move between Gulf states.
Common mistakes and edge cases
The most common error is calculating the payout on basic salary alone. In Saudi Arabia the base is the full wage, so leaving allowances out understates the encashment. A second mistake is treating the leave balance as fixed at the resignation date: leave keeps accruing during the notice period because the notice still counts as service, so the balance at your last working day is higher. Watch the rate switch as well, because the entitlement rises from 21 to 30 days a year once five continuous years are complete, and a worker just past that mark is often paid at the old rate by mistake. Finally, reconcile the leave days and the wage figure against your Qiwa and Mudad records before you accept the settlement, since a disputed allowance can move the base. If your exit involves a final exit visa, our Saudi final exit visa guide walks through the steps; if you are renewing rather than leaving, the Iqama renewal guide covers the paperwork, and the cross-border picture is in GCC overstay fines compared.
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What to do next
Cross-check the leave balance recorded by HR against your own count before you accept the final settlement. Keep your Qiwa contract, the Mudad wage records for the final months and your leave records ready, as those are the documents a labour office will ask for in a dispute. To estimate the other half of your exit settlement, run the Saudi end-of-service calculator. If you are leaving the country, the Saudi exit and re-entry fee calculator helps you plan the visa costs. For the full picture of work permits, contract types and dispute routes, see the Saudi work permit guide and the Saudi Arabia country guide.