Tools · Saudi Arabia
Saudi End of Service Calculator
Estimate the end of service award due when you leave a Saudi employer, including the reduction that applies if you resign rather than being let go.
- First five yearsHalf a month per year (Article 84)SAR 30,000
- Years beyond fiveOne month per year (Article 84)SAR 12,000
- Award before any reductionSAR 42,000
- Article 85 treatmentFull award× 1
- PayableSAR 42,000
Rules as at 30 October 2026 · what this assumes
- Article 84: half a month’s wage for each of the first five years and a full month for each year after, calculated on your last wage. Part years count pro rata.
- Article 85 reduces the award on resignation — nothing under two years, one third from two to five, two thirds from five to ten, and the full award at ten years or more. An employer-ended contract pays in full whatever the length of service.
- “Wage” means the last full wage including regular allowances, not basic pay alone. Enter the figure your contract treats as the wage for this purpose.
- Specific cases in Article 87 — such as a female employee leaving within six months of marriage or three months of childbirth — are paid in full and are not modelled here.
Source: Saudi Labour Law, as amended February 2025. Saudi employment rules change — the Labour Law was amended with effect from February 2025 — so these figures are rechecked at least annually.
What the end of service award is
The end of service award is a statutory terminal payment, not a bonus and not a pension. Every employee in Saudi Arabia accrues it from the first day of service, and it falls due when the employment ends. For an expatriate it is frequently the single largest sum received during the whole posting, and because it is calculated on the last wage rather than an average, its value is decided by what you earn at the end rather than by what you earned throughout.
The formula, and the cliff that catches people
Article 84 gives half a month’s wage for each of the first five years and a full month for each year beyond. Article 85 then reduces the result if you resigned: nothing below two years, a third from two to five, two thirds from five to ten, and the whole award at ten. Those are steps, not slopes. On a SAR 10,000 wage, resigning at four years and eleven months is worth about SAR 8,194, while resigning at five years exactly is worth SAR 16,667. One further month of service more than doubles the payment, and nobody tells you on the way out.
What to do with it
A terminal payment arriving in the same window as a relocation is the moment most likely to be absorbed without a decision. It is worth deciding in advance where it goes — against a mortgage, into a pension, into an investment account — and worth checking the timing against your tax residence in the country you are moving to, because a payment that is untaxed in Saudi Arabia is not necessarily untaxed where it lands. Our UK Statutory Residence Test is the place to start if that country is the UK.
Important — This is an estimate based on the figures you enter and the Saudi rules in force at the date shown with the result. It is not legal or employment advice, and it does not replace your contract, which may define wage, hours or leave differently. Saudi employment law was amended with effect from February 2025; where a figure matters, confirm it against your contract and take advice in the Kingdom.
This tool is a general illustration based on the figures you enter. It does not constitute financial, investment, tax or legal advice, and the results are estimates rather than guarantees. Global Investments is not authorised or regulated by the Financial Conduct Authority. Where the amounts involved are material, take advice from a suitably qualified professional in each relevant jurisdiction before acting.
Related tools & guides
- All Saudi employment calculators — the full set in one place
- Take-Home Pay Calculator — compare a Saudi package against eight other jurisdictions
- Income & Expenditure Calculator — test the figure against a real budget
- Living in Saudi Arabia — the wider picture on a Saudi posting
- Saudi Premium Residency — the residence route and what it changes
- Pension Gap Calculator — what to build when no state pension is accruing
Saudi End of Service — common questions
4 questions
How is the Saudi end of service award calculated?
Article 84 of the Labour Law gives half a month's wage for each of the first five years of service and a full month's wage for each year after that, calculated on your last wage. Part years count pro rata. So six years on a wage of SAR 12,000 produces (5 × 0.5 × 12,000) + (1 × 12,000) = SAR 42,000 before any reduction. The wage used is your last full wage including regular allowances, not basic pay alone — which is why two people on the same basic can receive very different awards.
Link to this questionDo I get less if I resign?
Usually, yes, and the difference is large. Article 85 reduces the award where you resign: nothing at all under two years of service, one third from two to five years, two thirds from five to ten, and the full award once you reach ten years. The thresholds are cliffs, not gradients. Resigning at four years and eleven months on a SAR 10,000 wage produces about SAR 8,194; waiting until five years exactly produces SAR 16,667 — more than double, for one more month of service. If you are close to a threshold, the arithmetic is worth doing before you hand in notice.
Link to this questionWhat if my employer ends the contract?
Then the reduction does not apply and the full Article 84 award is payable, however long or short your service. The same is true when a fixed-term contract simply runs to its end. Certain specific cases in Article 87 are also paid in full — including a female employee leaving within six months of marriage or three months of childbirth — and those are not modelled by this calculator.
Link to this questionIs the award taxed?
Not in Saudi Arabia, which levies no personal income tax on employment income. Whether it is taxable where you go next is a separate question, and the answer depends on your residence position in that country and on when the payment is made relative to your arrival. If you are returning to the UK, the timing of a large terminal payment relative to your split-year position is worth planning rather than leaving to chance.
Link to this question