End of service benefit calculator
Work out the end of service benefit for private-sector employees under the Saudi Labour Law. Enter the actual wage, the start and end dates of service and the reason the employment ended, and the amount and entitlement rate appear instantly.
The benefit is calculated on the actual wage: half a month's wage for each of the first five years and a full month's wage for each year after that. The entitlement rate for the reason the employment ended is then applied.
This calculator estimates the end of service benefit in the private sector under the Saudi Labour Law. It does not cover the other end-of-contract dues such as accrued leave or payment in lieu of notice. The result is indicative and is not legal advice. Different rules apply to public-sector, military and teaching positions.
The end of service benefit is a financial right of private-sector employees in Saudi Arabia when the employment relationship ends. It is calculated over the full length of service and on the last actual wage. Article 84 of the Labour Law sets the amount, Article 85 sets the share a resigning employee receives, and Article 80 covers the cases where the right is forfeited.
Manual calculations rarely fail on the formula. They fail on two inputs: the wage the benefit is built on, and the reason the employment ended, which decides the entitlement rate. This end of service calculator handles both, and shows the applied rate as a figure of its own next to the result, so you can see how the amount was reached.
How to use the end of service calculator
The calculator runs live with no submit button, and every change recalculates the result. There are five fields:
| Field | What to enter |
|---|---|
| Monthly actual wage | The last full wage in Saudi riyals: the basic wage plus the fixed allowances such as housing and transport. Entering the basic wage alone produces a figure below what is due. |
| Service start date | The date the employee started work, as stated in the contract. |
| Service end date | The last working day. The calculator derives the length of service from the two dates in years, months and days, so you do not have to work it out yourself. |
| Contract type | Fixed term or indefinite term. Your choice filters the list of termination reasons and does not change the arithmetic. |
| Reason the employment ended | The list covers expiry of the contract, resignation, termination under Article 80, termination under Article 81, force majeure, the two cases for a female employee, disability, death, transfer of ownership, retirement age and the probation period. This field decides the entitlement rate. |
The "Clear fields" button resets the calculator. If the end date falls before the start date, a warning appears and nothing is calculated.
What the results mean
- End of service benefit due: the final amount after the entitlement rate is applied to the benefit base.
- Length of service: the period derived from the two dates in years, months and days. Use it to sanity-check the dates before reading the amount.
- Entitlement rate: the rate set by the reason the employment ended. It is 100% in most cases, drops on resignation, and is zero for Article 80 and the probation period.
- First five years: the first tier of service at half a month's wage per year.
- Years after the fifth: the second tier at a full month's wage per year.
- Benefit before the entitlement rate: the two tiers combined, which is the base the rate is applied to.
Two short labels sit under the results: the entitlement state (fully entitled, partially entitled or not entitled) and the reason that produced the rate.
What is the end of service benefit
It is an amount the employer pays the employee when the employment relationship ends, in return for the period spent at the establishment. It is calculated on the last wage rather than an average of wages, and it grows with length of service because the second tier counts a full month's wage for every year.
The benefit is a financial obligation of the establishment, and sound accounting practice recognises it across the years of service rather than in the final year alone. You can record that obligation in Qoyod accounting software through journal entries and expense management.
Who is entitled to the end of service benefit
- Private-sector employees covered by the Saudi Labour Law.
- Anyone whose service ended for a reason that does not forfeit the right: expiry of the contract, termination by the employer, force majeure, disability, death, retirement age, termination under Article 81, or transfer of ownership of the establishment.
- A female employee who ends her contract within six months of her marriage or within three months of childbirth, who receives the full benefit.
- An employee who resigns after two years of service, at a share of the benefit that rises with the length of service.
Scope: the private sector only. Public-sector, teaching and military positions are governed by separate regimes, and the figures from this calculator do not apply to them.
How the end of service benefit is calculated
Length of service splits into two tiers, and the two are added together to form the benefit base:
- First tier: half a month's wage for each of the first five years.
- Second tier: a full month's wage for each year after the fifth.
- Part years: counted in proportion to the time actually served, so six months earns half of what a full year earns.
Take an actual wage of 10,000 SAR and 12 years of service ended by expiry of the contract. The first tier is 5 years at half a wage, or 25,000 SAR. The second tier is 7 years at a full wage, or 70,000 SAR. The base is therefore 95,000 SAR, and because the reason carries full entitlement, the final amount is 95,000 SAR.
Termination versus resignation
The reason for termination is the most important variable in the calculation. When the contract expires or the employer ends it, the employee is entitled to the full benefit from the first year. Resignation follows the tiers in Article 85:
| Length of service on resignation | Entitlement rate | Due on a 10,000 SAR wage |
|---|---|---|
| Under two years | Not entitled | 0.00 SAR |
| Two years up to and including exactly five | One third | 8,333.33 SAR at 5 years |
| Over five years and under ten | Two thirds | 17,222.22 SAR at 5 years 1 month |
| Ten years or more | Full benefit | 75,000.00 SAR at 10 years |
Note the boundary at five years: completing exactly five years stays in the one-third tier, and a single day beyond it moves the resigning employee to the two-thirds tier. That boundary roughly doubles the amount, and it is where manual calculations go wrong most often.
Worked examples on a 10,000 SAR actual wage
| Case | Length of service | Entitlement rate | Amount due |
|---|---|---|---|
| Employer terminated the contract | 6 months | 100% | 2,500.00 SAR |
| Expiry of the contract term | 3 years | 100% | 15,000.00 SAR |
| Employer terminated the contract | 7 years | 100% | 45,000.00 SAR |
| Resignation | 2 years | 33.33% | 3,333.33 SAR |
| Resignation | 5 years | 33.33% | 8,333.33 SAR |
| Resignation | 10 years | 100% | 75,000.00 SAR |
| Termination under Article 80 | Any length | 0% | 0.00 SAR |
Which wage the benefit is calculated on
The calculation is built on the actual wage, not the basic wage. The actual wage is the basic wage plus the fixed allowances the employee receives on a regular basis, such as housing and transport.
- Included: the basic wage and regular fixed allowances.
- Check the contract: commissions and variable percentages, because how they are counted depends on the contract wording and the nature of the work.
- Excluded: one-off amounts that are not paid regularly.
Where part of the pay is a variable sales commission, work out its average before entering the wage. The sales commission calculator helps you estimate the commission, and the salary calculator breaks down the monthly pay components.
When the benefit is forfeited
- Termination under Article 80: dismissal on one of the grounds set out in the Labour Law forfeits the benefit in full.
- Termination during probation: no benefit accrues for the probation period.
- Resignation before two years: a resigning employee is entitled to nothing before that point.
In these cases the calculator still shows the benefit base and then reduces the result to zero, so the amount forfeited is visible rather than hidden.
What this calculator does not include
This end of service calculator covers that one item, which is a single component of the dues payable at the end of the relationship. The others are calculated separately:
- Accrued unused leave, calculated on the daily wage.
- Payment in lieu of notice, where the contract ends without the notice period being served.
- Wages and commissions outstanding up to the last working day.
- Lawful deductions, such as advances and loans owed by the employee.
The result is an estimate for guidance and is not legal advice. Review the contract and the records before paying or claiming any dues.
Have a question?
Direct answers to what employers and employees ask before running the numbers.
When is an employee entitled to the end of service benefit?
An employee is entitled when the employment relationship ends for a reason that does not forfeit the right, such as expiry of the contract, termination by the employer or reaching retirement age, and it is counted from the first year of service. A resigning employee is entitled to nothing before completing two years, after which entitlement starts at one third and rises with the length of service.
How is the end of service benefit calculated on resignation?
Work out the benefit base first: half a month's wage for each of the first five years and a full month's wage for each year after that. Then apply the resignation rate: one third from two years up to and including exactly five, two thirds above five and below ten, and the full benefit at ten years or more. On a 10,000 SAR wage and five years of service the base is 25,000 SAR and the amount due is 8,333.33 SAR.
When does an employee lose the end of service benefit?
The benefit is forfeited on dismissal under Article 80 of the Labour Law, on termination during the probation period, and on resignation before completing two years of service. In all other cases the right stands, in full or in part depending on the reason the employment ended.
Is the benefit calculated on the basic wage or the full wage?
It is calculated on the last actual wage, which is the basic wage plus the regular fixed allowances such as housing and transport. Entering the basic wage alone produces an amount below what is due. Commissions and variable percentages need the contract wording checked before their average is entered.
How are part years counted in the benefit?
Part years are counted in proportion to the time actually served, so an employee with seven years and six months earns half of what a full year earns in that tier. The calculator derives the period from the start and end dates in years, months and days, and shows it so you can check it before reading the result.
Does this calculator apply to public-sector employees?
No. The calculator is for the private sector under the Saudi Labour Law. Public-sector, teaching and military positions are governed by separate regimes with different entitlement conditions and calculation methods, so these results do not apply to them.