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Every employee working in KSA is entitled to get End of Service Benefits at the end of his employment term. Here we have given two End of service benefits (ESB) calculators and explained the calculation in detail as per Saudi Labor Law.
#1: End of service calculator
End of Service for the first 2 years
End of Service for the first 5 years
End of Service for 5 to 10 Years
End of Service for more than 10 years
We have developed this ESB calculator ourselves and tested it several times. You just need to enter;
- Start and end date of employment.
- The number of days you have taken leaves without pay.
- Total Gross Salary.
- Reason for termination/resignation.
#2: ESB calculator
This end of service benefits calculator has been developed by the Ministry of Labor of Saudi Arabia. https://laboreducation.mlsd.gov.sa/en/calc
Here you need to enter the following;
- Type of contract.
- The reason for termination/resignation.
- Total Salary.
- Duration of Service.
Every employee working in KSA is entitled to get the end of service benefits with the following 3 exceptions;
- Employees working without transferring the Iqama sponsorship.
- Employees working on a business visit visa.
- Employees working on a consultancy contract e.g. IT consultants.
ESB in case of termination
The gratuity calculation varies depending upon the fact that the employee is terminated or resigned.
As per article 84 of Saudi Labor Law, an employee is entitled to the following end of service benefits in case of termination;
- 1/2 salary for the first 5 years for each year served.
- Full salary after the first 5 years for each year served.
Keep in mind that there is no ESB entitlement if an employee is terminated under Article 80 of Saudi Labor Law.
An employee got terminated after working for 7 years in a company. His last total salary was SR 10,000/month. The following screenshot has been taken from the ESB calculator given above.
- ESB for the first 5 years = 5 Years X 10,000 / 2 = 25,000.
- ESB for the next period = 2 Years X 10,000 = 20,000.
- Total = SR 45,000.
There are 7 different scenarios which have an impact on the calculation of the end of service benefits in case of resignation.
Resignation within 2 years = ZERO.
According to Article 85 of Saudi Labor Law, if an employee resigns within 2 years of resignation without completing his contract, he is not entitled to any end of service benefits.
Resignation between 2 to 5 years.
According to Article 85 of Saudi Labor Law, if an employee resigns after 2 years but before completing 5 years of service;
- He is entitled to 1/3rd of his ESB award.
- ESB Award: Half salary for each year.
An employee resigned after working for 4 years in a company. His last total salary was SR 10,000/month. The following screenshot has been taken from the End of Service Benefits calculator given above.
- ESB for the first 4 years: (10,000/2) X 4 X 1 / 3 = SR 6,667.
As per Article 85 of Saudi Labor Law, an employee who resigns after completing 5 years but before 10 years of service is entitled to;
- 2/3rd of his ESB award.
- ESB Award: 1/2 salary for 5 years + Full salary for each next year.
An employee resigned after working for 7 years in a company. His last total salary was SR 10,000/month.
- ESB for the first 5 years = (10,000/2) X 5 X (2/3) = SR 16,667
- ESB for the next period = 10,000 X 2 X (2/3) = SR 13,333
- Total = 16,667 + 13,333 = SR 30,000.
Resignation after 10 years.
A worker who resigns after completing 10 years in a company will get his full end of service benefits award as per Article 85 of Saudi Labor Law i.e.
- 1/2 salary per year for the first 5 years.
- full salary per year for the next period.
An employee resigned after working for 11 years in a company. His last total salary was SR 10,000/month. The following screenshot has been taken from the ESB calculator given above.
- ESB for the first 5 years: (10,000/2) X 5 X (1/2) = SR 25,000.
- ESB for the next period: 10,000 X 6 = SR 60,000.
- Total = 25,000 + 60,000 = SR 85,000.
Resignation at contract completion.
If an employee resigns at the contract completion, he is entitled to his full end of service benefits award i.e.
- 1/2 salary per annum for the first 5 years.
- Full salary per annum after the first 5 years.
In other words, the ESB will be calculated in the same way as if the employee was terminated.
An employee resigned after completing his two years contract with the company before his next contract renewal. His last total salary was SR 10,000/month.
- End of Service Benefits: (10,000/2) X 2 = SR 10,000.
Resignation under Article 81.
If an employee resigns under Article 81 of Saudi Labor Law, he is still entitled to get his full end of service benefits. We have incorporated this calculation in the end of service calculator given above.
Resignation under Article 87.
As per Article 87 of Saudi Labor Law, the following employees will also get a full ESB award.
- A female employee who resigns within 6 months of marriage.
- A female employee who resigns within 3 months of becoming a mother.
- An employee resigns due to a natural disability.
- In case of death of an employee.
What is included in the ESB?
As per article 2 of Saudi Labor Law, all the fixed benefits paid to an employee are included in the end of service benefits calculation such as;
- Basic Salary.
- Mobile Allowance.
However, those benefits which are contingent upon other factors such as sales incentive, ticket allowance, and bonus are not included in it.
Payment of End of Service Benefits
According to article 88 of Saudi Labor Law, an employer is obliged to pay end of service benefits within;
- 1 week in case of termination.
- 2 weeks in case of resignation.
In case of failure to pay the ESB within 2 weeks, the employee has the right to file a case in the Saudi Labor Court. Moreover, the employer is fined SR 10,000 for delaying the ESB by more than 2 weeks.
Moreover, the Saudi Arabian Monetary Agency (SAMA) has also clarified that banks do not have the authority to withhold the end of service awards of their customers until or unless they have a judicial statement allowing them to do so.
ESB for Domestic Workers
According to Article 16 of Resolution 310 of the Council of Minister dated 07/09/1434;
- A domestic worker is entitled to one salary after 4 years of service.
- If a housemaid or a house driver worked for 12 years, he will get 3 monthly salaries as the ESB award.
- Source: Resolution 310
Unfortunately, the end-of-service calculator of Saudi Arabia given above would not calculate the ESB for domestic workers.
Some Useful Calculators
Apart from the End of Service calculator, we have produced some other useful calculators as well for your help.