How it works
The rule
The end of service award in Saudi Arabia comes from Article 84 of the Labor Law. For every year of the first five, the employer pays half a month's wage; for every year after that, a full month. Parts of a year count in proportion to the time worked.
The wage used is the last actual wage: your basic salary plus the fixed allowances you were regularly paid. The award is calculated on the day the contract ends.
When you resign
Article 85 reduces the award when you leave by choice:
- under two years of service: nothing
- two to five years, five included: one third
- more than five and under ten years: two thirds
- ten years or more: the full award
The brackets are sharp, and the statute's words set them: a third for service "not exceeding five years", two thirds "if it exceeds five years". An employee who resigns at exactly five years collects a third; a day later it would have been two thirds.
Cases paid in full
The full award is due when the employer ends the contract, when a fixed-term contract reaches its end, when you leave because of the employer's breach (Article 81), and in the Article 87 cases: a woman who resigns within six months of marriage or three months of giving birth, and anyone who leaves because of force majeure.
When nothing is due
A dismissal for one of the reasons in Article 80 (serious misconduct, forged documents, unexcused absence beyond the limits, and the other listed grounds) is made without notice, award or compensation.
A worked example
Last wage 10,000 riyals, seven years of service, employer terminated the contract:
- first five years: 5 × 5,000 = 25,000
- two more years: 2 × 10,000 = 20,000
- award: 45,000 riyals
Had the same employee resigned, the share would be two thirds: 30,000 riyals.
Checking the result
The Ministry of Human Resources and the Ministry of Justice both publish calculators. Hasiby applies the same articles and shows each step so you can compare line by line. Count the last working day as a day of service, and remember that unpaid leave, a disputed wage or a contract clause more generous than the law can all move the figure.
Frequently asked questions
Which wage is the award based on?
The last actual wage: basic salary plus the fixed allowances paid regularly, such as housing and transport. Commissions and bonuses that vary are generally excluded unless your contract treats them as part of the wage.
I resigned after four years. What do I get?
One third of the award. Article 85 gives a third for two to five years, two thirds once service exceeds five years and is under ten, and the full award at ten years or more. One day past the fifth anniversary would have doubled your share.
Does a fixed-term contract that simply ends count as termination?
Yes. When the contract reaches its agreed end date, the award is paid in full, the same as if the employer had ended it.
Are the first five years really half a month?
Yes. Article 84 pays half a month's wage for each of the first five years and a full month for each year after, with parts of a year paid in proportion.
Did the 2025 amendments change the award?
No. Royal Decree M/44, in force since 19 February 2025, added Article 79 bis on how resignation is given and accepted; Articles 84 and 85, which set the award and the resignation shares, did not change.