KSA EOSB: Resignation vs Termination 2026 — What Article 84 Actually Pays
Last updated: June 2026 · Legal reference: Saudi Labour Law, Article 84
Quick Summary
In Saudi Arabia, whether you resign or are terminated directly affects how much EOSB you receive. Under Article 84 of Saudi Labour Law, termination always pays 100% of your entitlement. Resignation pays only one third for 2–5 years of service and two thirds for 5–10 years. After 10 years, both scenarios pay the same full amount. On a 5,000 SAR monthly salary after 7 years, this gap is 3,288 SAR.
In Saudi Arabia, resigning before you hit 10 years of service costs you a significant portion of your end of service benefit. Article 84 of Saudi Labour Law sets three reduction tiers for resignation — one third for 2–5 years, two thirds for 5–10 years, and the full amount only after 10 years. Termination, by contrast, always pays 100% regardless of how long you have worked. The financial gap between these two outcomes is one of the most important and least understood features of Saudi labour law for expat workers.
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Calculate my Saudi Arabia EOSBWhat Article 84 says about resignation vs termination
Saudi Arabia's end of service benefit system is governed by Article 84 of the Saudi Labour Law. Unlike Kuwait and UAE, where the method of departure does not affect your EOSB amount, Saudi Arabia explicitly penalises voluntary resignation below 10 years of service.
The law sets a baseline calculation — 15 days of basic salary per year for the first five years, and 30 days per year after that — and then applies a multiplier based on how your employment ended and how long you served.
The resignation reduction tiers
| Years of service | If resigned | If terminated |
|---|---|---|
| Less than 2 years | No entitlement | No entitlement |
| 2–5 years | ⅓ of full amount | Full amount (100%) |
| 5–10 years | ⅔ of full amount | Full amount (100%) |
| 10+ years | Full amount (100%) | Full amount (100%) |
The Article 84 formula — step by step
Step 1 — Daily rate:
Daily rate = Basic salary × 12 ÷ 365
Step 2 — Days earned (both resignation and termination use the same base):
- Years 1 to 5: 15 days per year
- After year 5: 30 days per year
Step 3 — Apply resignation multiplier (if resigned):
- 2–5 years: multiply total by ⅓
- 5–10 years: multiply total by ⅔
- 10+ years: no reduction — full amount
Step 4 — Cap:
Total cannot exceed 24 months of basic salary.
Worked examples — same salary, same years, different outcome
All examples below use a basic salary of 5,000 SAR/month. Daily rate = 5,000 × 12 ÷ 365 = 164.38 SAR/day.
Example 1 — After 3 years: resigned vs terminated
Resigned (3 years)
Base: 3 × 15 days × 164.38 = SAR 7,397
Reduction (⅓): SAR 7,397 × ⅓
Total = SAR 2,466
Terminated (3 years)
Base: 3 × 15 days × 164.38 = SAR 7,397
No reduction
Total = SAR 7,397
Gap: SAR 4,931 for the same 3 years of work
Example 2 — After 7 years: resigned vs terminated
Resigned (7 years)
Yrs 1–5: 5 × 15 × 164.38 = SAR 12,329
Yrs 5–7: 2 × 30 × 164.38 = SAR 9,863
Base total: SAR 22,192
Reduction (⅔): SAR 22,192 × ⅔
Total = SAR 14,795
Terminated (7 years)
Yrs 1–5: 5 × 15 × 164.38 = SAR 12,329
Yrs 5–7: 2 × 30 × 164.38 = SAR 9,863
No reduction
Total = SAR 22,192
Gap: SAR 7,397 — over a month's salary lost by the choice to resign
Example 3 — After 12 years: no difference
Yrs 1–5: 5 × 15 × 164.38 = SAR 12,329
Yrs 5–12: 7 × 30 × 164.38 = SAR 34,520
10+ years: no resignation reduction
Resigned = Terminated = SAR 46,849
After 10 years, the gap disappears entirely
The number that matters
At 7 years on 5,000 SAR, the gap between resignation and termination is SAR 3,288
This is not a rounding difference. It is a direct consequence of the Article 84 ⅔ reduction applied to years 5–10. If your employer is pressuring you to resign rather than formally terminating you, that pressure has a real monetary value — and it belongs in your pocket, not theirs.
If you believe you are being pushed to resign to avoid paying your full entitlement, a Saudi labour lawyer can advise you on constructive dismissal grounds.
When "pressured to resign" matters legally
Some employers in Saudi Arabia deliberately create conditions designed to force an employee to resign voluntarily — reducing hours, changing role, withholding payment, or harassment — knowing that a formal termination triggers a higher EOSB. This is known as constructive dismissal.
Saudi labour regulations do offer protections in such cases, and the Ministry of Human Resources has dispute resolution mechanisms for workers who believe they were effectively terminated despite submitting a formal resignation. The outcome depends on documented evidence of employer misconduct.
If you suspect this is happening, do not resign without first consulting a qualified Saudi labour lawyer. See the legal help section below.
Frequently asked questions
Does resignation reduce my EOSB in Saudi Arabia?
Yes. Under Article 84 of Saudi Labour Law, resigning before 10 years of service reduces your EOSB. For 2–5 years you receive one third of the full amount. For 5–10 years you receive two thirds. After 10 years, resignation receives the full amount identical to termination.
What is the difference between termination and resignation EOSB in Saudi Arabia?
If terminated, you always receive 100% of your calculated EOSB regardless of years served. If you resign, your entitlement is reduced to one third (2–5 years) or two thirds (5–10 years) of the full amount. After 10 years the difference disappears and both receive the full amount.
How much EOSB do I get if I resign after 7 years in Saudi Arabia?
On a 5,000 SAR monthly basic salary, resigning after exactly 7 years gives you approximately 18,904 SAR. This is the two-thirds reduction applied to the full termination amount of 22,192 SAR for the same 7 years, a gap of 3,288 SAR.
At what point does resignation give the same EOSB as termination in Saudi Arabia?
Once you cross 10 full years of continuous service, Article 84 no longer penalises resignation. You receive 100% of your calculated EOSB whether you resign or are terminated.
What counts as salary for Saudi Arabia EOSB?
Only your basic salary is used. Housing allowance, transport allowance, and all other fixed or variable allowances are excluded from the EOSB calculation under Article 84 of Saudi Labour Law.
Can my employer pressure me to resign instead of terminating me in Saudi Arabia?
If an employer creates intolerable working conditions that force you to resign, this may be treated as constructive dismissal under Saudi labour regulations, which could entitle you to the full termination EOSB. You should consult a qualified Saudi labour lawyer if you believe you were pressured into resigning.
What is the EOSB formula for termination in Saudi Arabia?
On termination: daily rate = basic salary × 12 ÷ 365. Years 1–5 earn 15 days per year. Years after 5 earn 30 days per year. There is no reduction for termination at any length of service. The total is capped at 24 months of basic salary.
What if I have less than 2 years service in Saudi Arabia?
Under Article 84, you need at least two full years of continuous employment to qualify for any EOSB in Saudi Arabia — regardless of whether you resigned or were terminated. This is stricter than Kuwait and UAE, which require only one year.
Key Takeaways
- ✓ Termination always pays 100% of your EOSB regardless of years served
- ✓ Resignation under 5 years = only ⅓ of full entitlement
- ✓ Resignation 5–10 years = only ⅔ of full entitlement
- ✓ After 10 years: resignation = termination = full 100%
- ✓ On 5,000 SAR/month after 7 years the gap is SAR 7,397 (the ⅓ you forgo)
- ✓ Constructive dismissal (forced resignation) may entitle you to the termination amount — seek legal advice
- ✓ Always based on basic salary only — allowances excluded
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Need legal help?
Employer underpaying your EOSB or pressuring you to resign?
A qualified Saudi labour lawyer can verify your EOSB calculation, assess whether constructive dismissal applies to your situation, and file a complaint with the Ministry of Human Resources on your behalf.
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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.