End of Service Calculator Saudi Arabia — Labor Law 2026

End-of-service gratuity in Saudi Arabia (2026)

End-of-service gratuity (مكافأة نهاية الخدمة) is a statutory right for private-sector workers in Saudi Arabia, governed by Articles 84 and 85 of the Labour Law and paid as a lump sum when employment ends, based on your length of service and last wage.

How it is calculated (Article 84)

First 5 years: half a month's wage for each year.
From year 6 onward: a full month's wage for each additional year.

The award is based on your last wage and pro-rated for fractions of a year. There is no maximum cap.

Resignation (Article 85)

When the employer ends the contract you receive the full award. On resignation, it is reduced by length of service:

Under 2 years: nothing.
2 to 5 years: one-third of the award.
5 to 10 years: two-thirds.
10 years or more: the full award.

Some cases pay the full award regardless of tenure — for example service ending due to force majeure, or a female worker who leaves within 6 months of marriage or 3 months of giving birth (Article 87).

Which wage is used?

The award is calculated on your last wage, which under the Labour Law includes basic salary plus regular fixed allowances such as housing and transport. Enter your total monthly wage for an accurate estimate.

2025 update

The Labour Law amendments effective 19 February 2025 did not change the gratuity formula or the resignation reductions. They refined related rules — a longer probation period (up to 180 days) and clearer notice requirements — and tied the statutory definition of "resignation" to fixed-term contracts.

Saudi Arabia vs other GCC countries

Rule	Saudi Arabia	UAE	Bahrain
On resignation	Reduced (⅓ / ⅔ by tenure)	Full after 1 year	Full
Maximum cap	None	2 years' pay	None
Wage base	Last wage incl. allowances	Basic only	Basic + social allowance

Calculation Methodology

Wage used in the calculation

The calculator uses the monthly salary you enter as the calculation base. In some systems this may be basic wage only, while in others it may include actual wage or fixed allowances; enter the wage basis that matches your country and contract.

Service period conversion

The calculator converts years and months of service into a proportional period, then applies the days or months owed per year according to the country and termination reason.

Reason employment ended

The result changes for resignation, employer termination, or contract end. Some laws reduce or deny gratuity for certain service periods. Check the legal reference on the page for final treatment.

Practical Examples

Resignation after 7 years — 8,000 SAR salary

Sarah earned a basic salary of 8,000 SAR and resigned after 7 years. First 5 years: 5 × (8,000 ÷ 30) × 15 = 20,000 SAR Next 2 years: 2 × (8,000 ÷ 30) × 30 = 16,000 SAR Full gratuity = 36,000 SAR Resignation modifier (5–10 years) = ⅔ Entitlement = 36,000 × ⅔ = 24,000 SAR

Termination after 12 years — 12,000 SAR salary

Ahmad earned a basic salary of 12,000 SAR and was terminated after 12 years. First 5 years: 5 × (12,000 ÷ 30) × 15 = 30,000 SAR Next 7 years: 7 × (12,000 ÷ 30) × 30 = 84,000 SAR Full gratuity = 114,000 SAR Reason: termination → full gratuity = 114,000 SAR

Frequently Asked Questions

Does the probation period count toward end of service gratuity?

Yes, the probation period is included in total service duration for gratuity calculation, provided the employee continues working after probation ends. If the contract is terminated during probation, no gratuity is owed.

Are allowances like housing and transport included in the calculation?

Yes. The gratuity is calculated based on the "actual wage" (last wage), which includes the basic salary plus all fixed allowances such as housing and transportation, as defined in Article 2 of the Saudi Labor Law.

How is gratuity calculated for partial years?

Workers are entitled to a pro-rata gratuity for fractions of a year, proportional to the time spent in service. For example, 6 months of service after complete years earns half of that year's gratuity entitlement.

What happens if the employer terminates the contract during probation?

If the contract is terminated during the probation period, the worker is not entitled to end of service gratuity or compensation for termination, unless the contract stipulates otherwise.

Is gratuity paid upon resignation?

Yes, but at reduced rates per Article 85: less than 2 years receives nothing, 2–5 years receives one-third, 5–10 years receives two-thirds, and over 10 years receives the full gratuity.

What is the difference between termination and resignation for gratuity?

When the employer terminates the contract, the worker receives full gratuity per Article 84. Upon resignation, the gratuity is reduced per Article 85 based on years of service, except for workers with 10+ years who receive the full amount.

End of Service Calculator - Saudi Arabia

How to Use

This tool is available for other countries