End-of-Service Award & Termination in Saudi Arabia: Your Rights (2026)
How end-of-service gratuity works under Saudi Labor Law: the half-month/full-month formula, what you get if you resign (Article 85), and unfair-dismissal compensation (Article 77).
Under Saudi Labor Law, end-of-service award is calculated as half a month's wage for each of the first five years and a full month's wage for each subsequent year (Article 84). If you resign, what you receive is tiered by length of service (Article 85): nothing under two years, one-third from two to five years, two-thirds from five to ten years, and the full amount after ten years. Termination for an invalid reason entitles the worker to compensation under Article 77. Verify every figure against the current law and your contract.
FAQ
How much end-of-service award do I get if I resign after 3 years in Saudi Arabia?
Under Article 85 of the Saudi Labor Law, an employee who completes between two and five years and then resigns is entitled to one-third of the award. The base award is half a month's wage for each of the first five years, and one-third of that is taken in this case.
Is the Saudi end-of-service award calculated on basic or total salary?
It is calculated on the employee's 'last wage' as defined by the Labor Law. Because the definition of wage can include certain components, it is best to verify which parts of your pay are included with a competent authority.
What is the compensation for unfair dismissal in Saudi Arabia?
Under Article 77, it is the amount agreed in the contract, or otherwise 15 days' wage for each year of service for an indefinite-term contract (or the wage for the remaining term of a fixed-term contract), with a minimum of two months' wage, in addition to the end-of-service award.