Saudi End of Service Calculator

What the End-of-Service Benefit Actually Is

The end-of-service benefit (ESB), sometimes called end-of-service gratuity, is a lump sum every private-sector worker in Saudi Arabia earns for the time they spend with an employer. It is set out in the Saudi Labour Law, primarily Article 87 (how the award is built), Article 84 (payment on termination or contract expiry) and Article 85 (the reduced scale for resignation). It is separate from any GOSI social-insurance pension and is paid by the employer when the relationship ends.

The Core Article 87 Formula

The award rests on two tiers tied to your last actual monthly wage — basic salary plus fixed allowances:

• First five years: half a month's wage for each year.
• Every year after five: a full month's wage for each year.

So a worker with exactly five years earns 2.5 months of wage. A worker with ten years earns 2.5 months (first tier) plus 5 months (second tier) = 7.5 months. Crucially, there is no statutory cap, so long tenures compound meaningfully.

How Termination and Resignation Differ

Building the base award is only half the story; how the job ended decides what share you actually receive.

• Termination or contract expiry (Article 84): the worker takes the full award.
• Resignation (Article 85): a sliding scale applies — under 2 years, nothing; 2 to under 5 years, one-third; 5 to under 10 years, two-thirds; 10 years or more, the full award.

This is why resigning at, say, four years and eleven months can cost you a large chunk of the benefit compared with waiting to cross the five-year line.

A Worked Example in SAR

Take Khalid, who earns a monthly wage (basic + fixed allowances) of SAR 12,000 and has completed 8 years of service.

Step 1 — Base award (Article 87). First five years: 0.5 × 12,000 × 5 = SAR 30,000. Years six to eight (3 years): 1.0 × 12,000 × 3 = SAR 36,000. Base award = 30,000 + 36,000 = SAR 66,000.

Step 2 — Apply the end type. If Khalid's contract is terminated (Article 84), he receives the full SAR 66,000. If instead he resigns at 8 years (Article 85, the 5-to-10-year band), he receives two-thirds: 66,000 × 2/3 = SAR 44,000.

That single decision — resign now or be carried to contract end — is worth SAR 22,000 to Khalid. Modeling it before handing in a resignation letter is exactly what this calculator is for.

Planning Around the Tenure Bands

Because the resignation scale jumps at 2, 5 and 10 years, timing matters. If you are a few months short of the next band, the marginal benefit of staying can be large. The same kind of tenure-threshold thinking appears in other regional severance schemes — compare how a flat 15/26 day-rate works in our gratuity calculator, or see how take-home pay is treated elsewhere with the India take-home salary calculator.

Read the Estimate, Then Verify

This tool gives an indicative estimate based on the standard Article 84, 85 and 87 rules. It does not model contract-specific clauses, disciplinary dismissal under Article 80 (which can forfeit the benefit), unpaid leave that interrupts service, or disputes over which allowances count as "wage." Treat the figure as a planning aid, then confirm your exact entitlement with the Ministry of Human Resources and Social Development (MHRSD) or a qualified labour-law professional before relying on it.