How is the end-of-service award calculated?
Article 84 sets the full award at half a month’s wage for each of the first five years, then one month’s wage for each later year. Part-years count proportionately. Eligibility and any resignation reduction must then be checked.
| Service period | Basis of the full award |
|---|---|
| First five years | Half a month’s wage for each year |
| Years after the fifth year | One month’s wage for each year |
| Part of a year | A proportional amount for the period worked |
The last full wage, not basic salary alone
The starting point is the last full wage recognised by the Labor Law, including qualifying wage components—not automatically basic salary alone. Contractual allowances and other wage elements need to be checked against the contract and payroll. Reimbursements are not necessarily wages. Article 86 permits an agreement to exclude some fluctuating commissions, sales percentages or similar variable elements.
Resignation and employer termination are different
For an ordinary resignation under Article 85, the employee generally receives one-third of the full award after two to five continuous years, two-thirds after more than five but fewer than ten, and the full award at ten years or more. Under two years, the ordinary resignation rule generally gives no award. Statutory exceptions can preserve full entitlement.
Employer termination or expiry of a contract is assessed differently from resignation. The Article 84 full award is the starting point where entitlement exists; a valid Article 80 dismissal or termination during probation may affect entitlement. We examine the real circumstances and evidence, not simply the label used in a letter.
Common errors to check in an employer’s calculation
A settlement figure should be checked against the underlying service and wage evidence. In particular:
- Wrong start date: the first day of actual continuous service may be earlier than the date entered in a recent document.
- Basic-salary-only calculation: qualifying wage components may have been left out.
- A newer Qiwa contract: a later contract or renewal does not by itself erase earlier continuous service; Article 56 treats renewed terms as an extension for service-related rights.
- Incorrect reason for leaving: resignation, expiry and employer termination can have different effects.
- Missing part-years or leave pay: check the full period and assess unused leave separately from the award.
Claim deadlines: do not leave the review until later
Article 234 generally bars labor claims brought more than 12 months after employment ends, unless the court accepts an excuse or the employer acknowledges the right. Ask for an early review of the deadline and the required filing steps. Do not assume that informal negotiations or a WhatsApp exchange protect the time limit.
Read our guide to labor claim deadlines in Saudi Arabia before delaying a disputed end-of-service claim.
How we help with a disputed end-of-service claim
We compare your employment timeline, Qiwa records and salary evidence with the employer’s calculation, identify the disputed amount and explain the position in English. We also separate end-of-service benefits from unpaid salary, leave pay and any termination compensation.
Depending on the file and agreed scope, we can prepare the amicable settlement claim, review a proposed settlement and file or follow Labor Court proceedings through Najiz. We serve expatriates in Jubail, Jubail Industrial City, Dammam, Khobar and the Eastern Province. Remote consultations can be arranged; remote hearings remain subject to the court’s arrangements.
Official legal references
General guidance reviewed on 31 October 2026. The applicable rules and the documents in your matter determine your position.
