Saudi end-of-service award: resigning versus being terminated

How the award is calculated under Articles 84 to 88 of the Labour Law, and how much you keep if you resign.

In Saudi Arabia, the end-of-service award is governed by Articles 84 to 88 of the Labour Law. The amount depends on two things: how long you worked, and whether the contract ended by your resignation or by the employer.

The basic calculation (Article 84)

• Half a month's wage for each of the first five years.
• One month's wage for each year after the fifth.
• Parts of a year are paid in proportion.

The award is calculated on your last wage. Under the Labour Law's definition, this generally includes regular allowances, not only the basic salary, unless the parties have validly agreed otherwise.

If you resign (Article 85)

• Less than 2 years of service: no award.
• 2 to 5 years: one third of the award.
• More than 5 and less than 10 years: two thirds.
• 10 years or more: the full award.

When you receive the full award despite resigning (Article 87)

You are entitled to the full award, even if you leave on your own initiative, in cases such as:
• leaving because of force majeure beyond your control;
• a female employee ending her contract within six months of her marriage, or within three months of giving birth.
Leaving in the situations allowed by the Labour Law because of the employer's breach (for example, unpaid wages) is also treated differently from an ordinary resignation, so it is worth taking advice before you resign in that situation.

A worked example

Last wage: SAR 9,000 a month. Service: 8 years.
• First 5 years: 5 × ½ month = 2.5 months
• Next 3 years: 3 × 1 month = 3 months
• Full award: 5.5 months × 9,000 = SAR 49,500
If the employer ends the contract: SAR 49,500.
If you resign after 8 years: two thirds = SAR 33,000.

Payment deadline (Article 88)

The employer must pay within one week of the end of the contract, or within two weeks if you resigned. Work-related debts you owe the employer may be deducted.

What changed in 2025

Amendments to the Labour Law that took effect in February 2025 did not change the award formula. They did change the resignation process: a resignation is treated as accepted if the employer does not respond within 30 days, and the employer may postpone it for a limited period with written reasons. Submit your resignation in writing and keep proof of the date.

Practical tips

• Before resigning, check how many years you have completed: crossing the 2, 5 or 10-year mark changes the amount significantly.
• Keep your contract, GOSI records and payslips.
• If the employer delays or disputes the payment, the claim goes through the labour dispute system, starting with amicable settlement.

You can ask the LexArab assistant to work out your award: give it your last wage, start date, end date and how the contract ended.

This article is general legal information about the Saudi Labour Law, not legal advice for your situation.