Leaving a job in Saudi Arabia? Under Article 84 of the Saudi Labor Law, your end-of-service award is half a month's wage for each of the first five years of service, plus a full month's wage for each year after that — calculated on your last wage, basic salary plus fixed allowances. Use the calculator below, and if you resigned, select that: Article 85 reduces the award.
How the formula works
Article 84 formula: ½ month wage × first 5 years + 1 month wage × each further year, on the last wage (basic salary plus fixed housing/transport allowances).
| Service at resignation | Share of full award (Art. 85) |
|---|
| Under 2 years | Nothing |
| 2–5 years | One-third |
| 5–10 years | Two-thirds |
| 10+ years | Full |
Worked example
A last wage of SAR 12,000, from January 2020 to January 2026 (6.01 years), on contract completion: ½ × 12,000 × 5 years + 12,000 × 1.01 years = 42,065.75 SAR. The same service on resignation would pay two-thirds of that: 28,043.84 SAR.
Common mistakes
1. Using basic salary only. The law says "last wage" — basic plus fixed allowances. Using basic alone can understate your gratuity by 30–40%.
2. Forgetting the resignation reduction. Resigning before 10 years cuts the award under Article 85 — check the table above before you hand in notice.
Minimum 1 year of continuous service is required. Termination by the employer (or contract expiry) always pays the full calculated amount.
Tax: Saudi Arabia levies no personal income tax, so your gratuity is paid in full. Gratuity applies to all private-sector employees regardless of nationality.
Gratuity FAQs
How is end-of-service gratuity calculated in Saudi Arabia?
Under Article 84 of the Saudi Labor Law: half a month's wage for each of the first 5 years of service, plus one full month's wage for each year after that, based on your last wage (basic salary plus fixed allowances). Resignation reduces it: nothing under 2 years, one-third for 2–5 years, two-thirds for 5–10 years, full at 10+ years.
Does resigning reduce my gratuity in Saudi Arabia?
Yes. Under Article 85, resignation pays nothing under 2 years of service, one-third for 2–5 years, two-thirds for 5–10 years, and the full award at 10+ years. Contract completion or termination by the employer always pays the full award.
When must my employer pay gratuity in Saudi Arabia?
Within one week of contract end, or within two weeks if you resigned.
Sources & verification
Formula from: Saudi MHRSD — Labor Law (Royal Decree M/51), Articles 84–85.
Last verified: 23 October 2026. Estimate only — confirm your exact entitlement with HR or the labour authority.
When must your employer pay it? Within one week of contract end (two weeks if you resigned).
If your employer refuses to pay: Raise it with the Saudi Ministry of Human Resources and Social Development (MHRSD / Qiwa). Keep your contract and salary slips.