How much end-of-service gratuity does a Saudi private-sector employee receive? Under the Saudi Labor Law: half-month wage per year for the first 5 years, plus full-month wage per year after year 5. Based on LAST total wage (basic + housing + regular allowances). Resignation reduces the gratuity on a sliding scale: 2-5 years tenure = 33%, 5-10 years = 66%, 10+ years or contract-completion = 100%. Worked examples below.
Built around how MENA teams actually manage this day-to-day.
Half-month wage per year for first 5 years. Full-month wage per year for every year after the 5th. Partial years prorated — e.g., 3 years 6 months = 3.5 × half-month = 1.75 months total.
Saudi EoS uses LAST total wage — basic + housing allowance + any REGULAR allowances paid monthly. (Transportation, utilities, phone if regular.) Irregular bonuses, overtime, and commissions typically excluded. This is wider than UAE (basic only) and produces higher gratuity for similar basic salary.
If employee resigns (not completing fixed-term contract): tenure 2-5 years = 33% of full EoS, tenure 5-10 years = 66%, tenure 10+ years = 100%. Under 2 years resignation = typically 0. Full-term contract completion = always 100% regardless of tenure.
If termination is by employer (not misconduct) or mutual consent, employee gets 100% of the formula amount. Only resignation under 10 years triggers the bracket reductions.
EoS is distinct from General Organization for Social Insurance (GOSI) pension contributions. Saudi employees are enrolled in GOSI (retirement + disability + SANED unemployment); non-Saudi expats have GOSI occupational-hazards only. EoS is paid in addition to GOSI, not instead.
If employer terminates under Article 80 (gross misconduct: assault, drunkenness, theft, revealing secrets, falsifying documents, etc.), no EoS is payable — must be properly documented with warnings + investigation.
Formula: 3 × 0.5 month = 1.5 months. Gratuity = 1.5 × 10,000 = SAR 15,000. Employer-terminated = 100% payable. Final: SAR 15,000.
Formula: (5 × 0.5) + (2 × 1) = 2.5 + 2 = 4.5 months. Gratuity = 4.5 × 14,000 = SAR 63,000. Mutual consent = 100% payable. Final: SAR 63,000.
Formula: (5 × 0.5) + (1 × 1) = 2.5 + 1 = 3.5 months = SAR 42,000 full amount. BUT resignation 5-10 years bracket = 66%. Final payable: 42,000 × 0.66 = SAR 27,720.
Formula: 3 × 0.5 = 1.5 months = SAR 22,500 full. Resignation 2-5 years bracket = 33%. Final: 22,500 × 0.33 = SAR 7,425. (If terminated instead, would get SAR 22,500.)
Formula: (5 × 0.5) + (7 × 1) = 2.5 + 7 = 9.5 months = SAR 190,000 full. Resignation 10+ years bracket = 100%. Final: SAR 190,000 (no reduction).
Per Saudi Labor Law: half-month wage per year for first 5 years + full-month wage per year after year 5. Based on LAST total wage (basic + housing + regular monthly allowances). Partial years prorated. Resignation reduces: tenure 2-5 years = 33% of formula, 5-10 years = 66%, 10+ years or contract-completion = 100%.
Yes. Saudi uses a broader wage base than UAE — basic salary + housing allowance + regular monthly allowances (transport, utilities, food if regular) are all included. This typically makes Saudi EoS 30-50% higher than UAE for similar basic pay. Irregular bonuses, commissions, and overtime are excluded.
If employee resigns (not completing their fixed-term contract): 2-5 years tenure = 33% of calculated EoS, 5-10 years = 66%, 10+ years = 100%. Less than 2 years resignation typically = 0 EoS. Full-term contract completion always = 100%. Employer-termination always = 100% regardless of tenure.
Yes. EoS and GOSI are completely separate. Saudi nationals are enrolled in GOSI (retirement + disability + SANED unemployment); non-Saudis have GOSI occupational-hazards only. EoS is paid at termination REGARDLESS of GOSI contributions. For Saudi nationals, EoS + GOSI combine to form retirement benefit. For expats, EoS is their only severance.
Yes. Saudi Labor Law EoS formula is pre-configured in AttendUX payroll engine. Tenure calculated from hire date, wage base assembled from basic + housing + regular allowances (irregular items excluded), resignation brackets applied automatically based on exit type. At termination, EoS auto-computes + appears in exit settlement + flows to final payslip. Labor-inspection audit trail immutable.
This page summarizes key provisions of Saudi Labor Law M/51, Articles 84-88 (end-of-service award) for general informational purposes only. This is not legal advice. Labor laws are amended periodically; AttendUX makes no warranty about completeness or current validity. For your specific situation — including employment terminations, disputes, cross-border cases, or policy design — consult a labor-law attorney licensed in the relevant jurisdiction and verify with the Saudi HRSD.
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