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How to calculate end-of-service pay under the Saudi Labour Law

4 November 2026 · 4 min read

End-of-service pay is owed when employment ends, based on the last wage and the length of service. Here is the rule, with worked examples.

The basic rule

Which wage is used?

The award uses the last wage: basic pay plus fixed allowances that are due, such as housing and transport. Commissions, percentages and similar variable items can be excluded by agreement.

On resignation

ServiceShare of the award
Under 2 yearsNone
2 to under 5 yearsOne third
5 to under 10 yearsTwo thirds
10 years or moreFull award

A female employee who leaves within 6 months of marriage or 3 months of giving birth receives the full award, as does an employee who leaves because of force majeure.

Examples

Example 1: ended by the employer. Last wage SAR 10,000, 6 years of service.
First 5 years: 5 × 5,000 = SAR 25,000. Year 6: SAR 10,000. Total: SAR 35,000.

Example 2: resignation. Same wage, 4 years of service.
Full award: 4 × 5,000 = SAR 20,000. One third on resignation: about SAR 6,667.

Common mistakes

Work it out in seconds

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For general information, not legal advice. Source: Ministry of Human Resources and Social Development.