Saudi end-of-service award
Estimate the end-of-service award of a private-sector worker in Saudi Arabia, including the reductions on resignation.
Saudi Arabia — Labor Law (Nizam al-Amal), Royal Decree M/51 of 1426 AH, articles 84 to 88, as amended up to Royal Decree M/44 of 1446 AH (in force since 19 February 2025). Rules in force on 10/24/2026.
Estimate for guidance only: check the official sources or a licensed professional before relying on it.
UAE end-of-service gratuity calculator
Frequently asked questions
Is the award calculated on the basic salary or the total salary?
The Labor Law uses the last wage, which article 2 defines as the actual wage: the basic wage plus the regular allowances, such as housing and transport. Commissions and sales percentages count too, unless the contract excludes them under article 86.
How much do I receive if I resign?
Nothing with less than 2 years of service, one third of the award from 2 to 5 years, two thirds above 5 and below 10 years and the full award from 10 years. The exceptions of article 87 and the cases of article 81 give the full award.
Did the 2025 amendments change the end-of-service award?
No. The amendments in force since 19 February 2025 changed the resignation procedure (article 79 bis), notice periods, probation and leave, but articles 84 to 88 on the award stayed the same.
When must the award be paid?
Within one week after the end of the contract, or within two weeks when the worker ended it (article 88). The employer may deduct debts owed to it because of the work.
How the Saudi end-of-service award is calculated
This calculator estimates the end-of-service award (mukafaat nihayat al-khidma) that a private-sector worker in Saudi Arabia receives when the employment contract ends. It is meant for Saudi and expatriate workers, HR teams and payroll staff who want a quick figure before a final settlement. Enter the basic wage, the regular allowances such as housing and transport, the commissions if they apply, the first and last day of work, any unpaid absence days and how the contract ended. The result is the gross statutory award in Saudi riyals (SAR), with the part of the service paid at each rate.
The award is based on the last actual wage, which article 2 of the Labor Law defines as the basic wage plus all regular allowances, and article 86 adds commissions unless the contract excludes them. Under article 84 the worker receives half a month of wage for each of the first five years and one month of wage for each later year, with incomplete years prorated (each month 1/12 of a year, each day 1/365). On resignation, article 85 pays nothing below 2 years, one third from 2 to 5 years, two thirds above 5 and below 10 years and the full award from 10 years. Articles 81 and 87 keep the full award, and a dismissal under article 80 gives none. Source: Royal Decree M/51 of 1426 AH, amended up to M/44 of 1446 AH (2025).
Example: a worker earns a basic wage of SAR 10,000, a housing allowance of SAR 2,500 and a transport allowance of SAR 1,000, so the actual wage is SAR 13,500. The worker started on 15 March 2019 and left on 14 September 2026, which is 7 years and 6 months of service. The full award is 13,500 × (2.5 + 2.5) = SAR 67,500.00: half a month of wage for the first 5 years and one month of wage for the remaining 2.5 years. If the worker resigned, two thirds apply and the award is SAR 45,000.00. The figures are gross amounts; the employment contract, company policy and court practice may lead to a different result, so confirm important cases with a licensed labor lawyer.