Saudi end-of-service benefits use a two-stage service formula. The result can also change according to how employment ends, so the service period, final eligible wage and termination reason all need to be checked together.
How the calculation works
The usual statutory starting point is half a month's wage for each of the first five years and one full month's wage for each year after that. Eligible fractions of a year are calculated proportionately.
Resignation can change the award
A resignation may lead to a reduced award depending on length of service, while some legally recognised circumstances can preserve a fuller entitlement. Do not apply the headline formula without first confirming the correct resignation band.
Which wage should be used
The calculation starts from the final wage recognised by the applicable rules and contract. Fixed and variable elements need careful treatment, so employees should reconcile payroll records rather than assuming the housing-inclusive package is always the correct input.
Final settlement checklist
Ask for a clear statement separating end-of-service benefits from unpaid salary, leave, expenses and deductions.
- Confirm the exact start and end dates.
- Record whether the exit is resignation or termination.
- Check the wage basis used by payroll.
- Keep the contract, payslips and settlement statement.
General information only. Confirm current rules with the relevant authority.