Saudi End-of-Service Benefits 2026: How to Calculate Your EOSB

For most expats in Saudi Arabia, the end-of-service benefit (EOSB), also called the end-of-service award or gratuity, is the biggest lump sum they receive from an employer. Because foreign workers do not join the Saudi state pension, this payment often acts as their main long-term saving from a Saudi job. This guide explains how the award is calculated under the Saudi Labour Law in 2026, how resignation reduces it, the main exceptions, and how to check the figure your employer gives you.

What the Law Says: Articles 84 and 85

Article 84 of the Saudi Labour Law sets the basic entitlement. When an employment relationship ends, the employer pays the worker an award of half a month's wage for each of the first five years of service and one full month's wage for each year after that. The award is based on the worker's last wage, and parts of a year count in proportion to the time worked.

Article 85 covers resignation. If you resign, you receive only part of the award depending on how long you have served. If the employer ends the contract, or a fixed-term contract simply expires, the reductions in Article 85 do not apply and you are generally entitled to the full Article 84 amount.

Did the 2025 Labour Law Amendments Change EOSB?

Wide-ranging amendments to the Labour Law took effect in February 2025. According to legal commentary from major law firms, they did not rewrite the Article 84 formula or the Article 85 resignation tiers. The main relevant change was to the resignation process: there is now a structured procedure for submitting a resignation, with notice rules and an employer response period. Because the date your service ends affects your length of service, following the resignation process properly matters for your final calculation.

The EOSB Formula at a Glance

The full award is calculated as follows: half a month's wage multiplied by your years of service up to five, plus one month's wage multiplied by any years beyond five.

Which Wage Is Used?

The award uses your last wage, not your starting pay. In practice, disputes often turn on what counts as "wage". The Labour Law defines the actual wage as basic pay plus regular allowances, and Saudi employers and labour courts commonly include fixed items such as housing and transport allowances in the calculation. Variable items such as one-off bonuses are usually treated differently. Check how your contract defines wage, and compare it with the salary recorded on Qiwa and paid through the Wage Protection System.

Step-by-Step: How to Calculate Your EOSB

1. Find your service dates: Use your contract start date and the date your service ends, including any notice period you work.
2. Convert to years: Express your service in years and fractions, for example six years and six months as 6.5 years.
3. Identify your monthly wage: Use your last monthly wage as defined by your contract, typically basic plus fixed allowances.
4. Calculate the first five years: Multiply up to five years by half your monthly wage.
5. Add the years after five: Multiply any remaining years by your full monthly wage.
6. Apply the resignation share if relevant: If you resigned, apply nothing, one third or two thirds according to Article 85.
7. Deduct only lawful amounts: Any deduction, such as an outstanding loan, should be documented and permitted by law.

Worked Examples in SAR

The examples below use simple monthly wages and assume the wage includes all components your contract counts.

Notice the jump at each threshold. Resigning a few weeks before reaching two, five or ten years of service can cost you a significant amount, so check your exact dates before handing in notice.

Exceptions Where You Keep the Full Award

Article 87 sets out situations in which a worker who leaves still receives the full award despite resigning. These include leaving because of force majeure beyond the worker's control, a female worker ending her contract within six months of marriage or within three months of giving birth, and situations where the worker leaves because the employer seriously breached its obligations, such as non-payment of wages or abuse, as covered by Article 81.

On the other hand, a worker who is lawfully dismissed for serious misconduct under Article 80 can lose the award. Employers must follow proper procedures to rely on that article, so take legal advice if you are dismissed without an award.

When Must Your Employer Pay?

Under Article 88, final dues should be paid within one week of the end of the relationship if the employer ended it, and within two weeks if the worker ended it. Final dues usually include unpaid salary, any accrued annual leave and the EOSB. Get a written settlement showing each component before signing a final clearance.

Mistakes to Avoid

• Resigning just before a threshold: Count your service days carefully around the two, five and ten year marks.
• Signing a clearance too early: Do not sign that you have received all dues until the money is in your account.
• Accepting basic-only calculations without checking: Compare the wage used with your contract and Qiwa record.
• Ignoring the resignation procedure: Submit your resignation through the proper channel so your end date is clear.
• Paying "labour consultants" to claim for you: Be wary of anyone promising guaranteed payouts for a fee. Complaints can be filed through official HRSD channels.
• Leaving the country before settlement: Recovering money from abroad is much harder. Resolve disputes before your final exit if you can.

What to Do if Your Employer Will Not Pay

Start by requesting a written breakdown from HR. If the issue is not resolved, you can file a labour complaint through official HRSD channels, where cases normally go to amicable settlement first and then to the labour courts if needed. Keep your contract, payslips, bank statements and any resignation or termination letters, as these are the evidence a court will rely on.

Final Thoughts

The Saudi EOSB formula is straightforward once you know the rules: half a month per year for the first five years, a full month for every year after, and reductions only when you resign before ten years. Track your service dates, understand which wage your contract uses, and plan any resignation around the thresholds. A few careful calculations can make a large difference to what you take home.

Frequently Asked Questions

Disclaimer: This article is general information, not legal advice. Labour Law provisions, their interpretation and court practice can change, and your contract may contain more generous terms. Check the official Labour Law text, HRSD guidance or a qualified Saudi employment lawyer before relying on any calculation.