Saudi Arabia End of Service Benefits Guide 2026 — Article 84 Explained
Last updated: June 2026 · Legal reference: Saudi Labour Law, Article 84
Quick Summary
Saudi Arabia EOSB is governed by Article 84 of the Saudi Labour Law. You need a minimum of 2 years service to qualify. The formula uses 15 days/year for years 1–5 and 30 days/year after that, based on your last wage — basic salary plus fixed regular allowances such as housing and transport. Unlike Kuwait and UAE, voluntary resignation is penalised — you receive only ⅓ of your entitlement for 2–5 years service and ⅔ for 5–10 years. Full amount applies from 10+ years or on termination.
End of service benefits in Saudi Arabia — often called EOSB or gratuity — is the lump sum payment every private sector employee is legally entitled to when their employment ends. Saudi Arabia's system is more complex than Kuwait or UAE because the amount you receive depends not just on your years of service, but on whether you resigned or were terminated. This guide explains exactly how Article 84 works, the resignation reduction rules most employees don't know about, and how to make sure your employer calculates it correctly.
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Calculate my Saudi Arabia EOSBWhat Article 84 of the Saudi Labour Law says
Saudi Arabia end of service benefits are governed by Article 84 of the Saudi Labour Law. The law applies to all private sector employees regardless of nationality. To qualify, you must have completed at least two full years of continuous employment — unlike Kuwait and UAE where one year is sufficient.
The exact Saudi Arabia EOSB formula
Step 1 — Calculate your daily rate:
Daily rate = Last wage × 12 ÷ 365
"Last wage" means basic salary plus any fixed regular allowances, such as housing and transport allowances. Variable pay, commissions, and performance bonuses are excluded.
Step 2 — Calculate days earned:
- Years 1 to 5: 15 days of pay per year
- After 5 years: 30 days of pay per year
Step 3 — Apply resignation reductions (if applicable):
- Resigned, 2–5 years: receive ⅓ of calculated amount
- Resigned, 5–10 years: receive ⅔ of calculated amount
- Resigned, 10+ years: receive full amount
- Terminated at any length: receive full amount
Resignation vs termination — the critical difference
In Kuwait and UAE, it makes no difference whether you resign or are terminated. In Saudi Arabia, it makes a significant financial difference, especially in your early years of service.
| Years of service | If resigned | If terminated |
|---|---|---|
| Less than 2 years | No entitlement | No entitlement |
| 2–5 years | ⅓ of full amount | Full amount |
| 5–10 years | ⅔ of full amount | Full amount |
| 10+ years | Full amount | Full amount |
Worked examples
Example 1 — Resigned after 3 years
Daily rate = 5,000 × 12 ÷ 365 = SAR 164.38/day
3 years × 15 days × 164.38 = SAR 7,397.26
Resignation reduction (2–5 years) = × ⅓ = SAR 2,465.75
Total EOSB = SAR 2,465.75
Example 2 — Terminated after 7 years
Daily rate = 5,000 × 12 ÷ 365 = SAR 164.38/day
First 5 years = 5 × 15 days × 164.38 = SAR 12,328.77
Next 2 years = 2 × 30 days × 164.38 = SAR 9,863.01
Total EOSB = SAR 22,191.78
Example 3 — Resigned after 12 years
Daily rate = 5,000 × 12 ÷ 365 = SAR 164.38/day
First 5 years = 5 × 15 days × 164.38 = SAR 12,328.77
Next 7 years = 7 × 30 days × 164.38 = SAR 34,520.55
10+ years resignation = no reduction
Total EOSB = SAR 46,849.32
Common mistakes employers make
1. Using basic salary only instead of last wage
Your last wage includes basic salary plus fixed regular allowances such as housing and transport. Variable pay, commissions, and bonuses are excluded.
2. Using 30-day months instead of the annual formula
The correct daily rate is basic × 12 ÷ 365, not basic ÷ 30.
3. Applying wrong resignation reductions
The reduction only applies for under 10 years. After 10 years of service, resignation receives the full amount.
4. Ignoring the 2-year minimum
Unlike Kuwait and UAE where one year qualifies you, Saudi law requires two full years of continuous service.
5. Not calculating partial years
Employers sometimes round down to the nearest full year — this is not permitted under Article 84.
Frequently asked questions
How many years do I need to work to get end of service in Saudi Arabia?
You need at least two complete years of continuous service to be eligible for end of service benefits in Saudi Arabia under Article 84 of the Saudi Labour Law.
Does Saudi Arabia EOSB change if I resign?
Yes. Unlike Kuwait and UAE, Saudi Arabia reduces your end of service benefit if you resign voluntarily. For 2–5 years service you receive one third of the full amount. For 5–10 years you receive two thirds. Only after 10 years do you receive the full amount on resignation.
Is there a maximum cap on EOSB in Saudi Arabia?
No. There is no statutory cap on end of service benefits under Articles 84 to 87 of the Saudi Labour Law. Your entitlement is based entirely on your last wage (basic salary plus fixed regular allowances) and completed years of service, however large that figure becomes.
Are allowances included in Saudi Arabia EOSB calculation?
Yes — if they are fixed and regular. Article 84 calculates end of service benefits on your 'last wage', which includes basic salary plus fixed regular allowances such as housing and transport allowance. Variable pay, commissions, and performance bonuses are excluded.
What is the daily rate formula for Saudi Arabia EOSB?
The daily rate is calculated as your last wage — basic salary plus fixed regular allowances such as housing and transport — multiplied by 12, divided by 365. This is then multiplied by the number of days earned based on years of service.
What happens to my EOSB if I am terminated in Saudi Arabia?
If you are terminated by your employer, you receive the full end of service benefit at all service lengths — 15 days per year for the first 5 years and 30 days per year after that, with no cap on the total.
When must my employer pay EOSB in Saudi Arabia?
Your employer must pay your end of service benefit as part of your final settlement when your employment contract ends. Delays beyond the final working day can be challenged at the Ministry of Human Resources.
Does Saudi Arabia limit how large my EOSB can grow with long service?
No. There is no cap under Articles 84 to 87 — a long-tenured, high-salary employee receives the full tiered award, uncapped, whether they resigned (subject to the resignation fractions) or were terminated.
Key Takeaways
- ✓ Minimum 2 years service required — not 1 year like Kuwait/UAE
- ✓ Based on last wage — basic salary plus fixed regular allowances (housing, transport)
- ✓ Resignation penalty: ⅓ for 2–5 yrs, ⅔ for 5–10 yrs, full for 10+ yrs
- ✓ Termination always receives full amount regardless of years
- ✓ No statutory cap — entitlement is uncapped, however large it grows
- ✓ Partial years are included proportionally — not rounded down
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Employer underpaying or delaying your Saudi EOSB?
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Reviewed against Saudi Labour Law, Article 84 — June 2026. This guide is for informational purposes only and does not constitute legal advice.