Saudi Arabia hosts the largest expatriate workforce in the Gulf — and its end of service award works differently from its neighbours. Two articles of the Labour Law decide everything: Article 84 sets the amount, and Article 85 decides how much of it you keep if you resign.
In short: Saudi end of service benefits pay half a month’s last wage (basic salary plus fixed allowances) per year for the first five years and a full month per year after that. If you resign, Article 85 cuts the award to one third (2–5 years), two thirds (5–10 years) or nothing (under 2 years); ten years or more pays in full.
When the contract ends because the employer terminates it, the contract expires, or you retire, Article 84 of the Saudi Labour Law (Royal Decree No. M/51) gives you the full "end of service award":
The most important Saudi detail: the "wage" here is your last wage — basic salary plus fixed allowances such as housing and transport, as defined in your contract. This is the opposite of the UAE, where only the basic salary counts. Two workers on identical total packages can therefore have very different awards in Riyadh and Dubai, and a Saudi calculation done on basic salary alone will understate the answer.
If you resign, Article 85 pays you only a fraction of the Article 84 award, depending on how long you served:
| Length of service when you resign | Share of the full award |
|---|---|
| Less than 2 years | Nothing (0) |
| 2 years to less than 5 years | One third (⅓) |
| 5 years to less than 10 years | Two thirds (⅔) |
| 10 years or more | The full award |
Unlike the UAE — which abolished resignation reductions in 2022 — Saudi Arabia still applies this scale today, including after the February 2025 Labour Law amendments (those changed procedures such as probation, notice and resignation through the Qiwa platform, but not the Articles 84–85 money formula).
Two exceptions matter. Under Article 87, you keep the full award even if you resign in defined hardship cases — force majeure, or a female employee resigning within six months of marriage or three months of childbirth. At the other extreme, dismissal for cause under Article 80 (serious misconduct) can mean no award at all.
Ahmed's contract wage is SAR 12,000 a month (basic SAR 9,000 + housing SAR 3,000) and he completes 8 years.
If his employer ends the contract, Ahmed receives SAR 66,000. If he resigns at the same point, Article 85 gives him two thirds — SAR 44,000. Had he resigned after just 3 years, his award would have been one third of (½ × 12,000 × 3) = SAR 6,000; resigning before 2 years would have meant nothing. Timing a resignation around the 2-, 5- and 10-year marks can be worth tens of thousands of riyals.
End of service benefits are paid by your employer at the end of the contract. GOSI (the General Organization for Social Insurance) is a monthly social-insurance deduction during employment — a different pot entirely. Three facts worth knowing:
Yes. Saudi Arabia uses your last full wage — basic salary plus fixed allowances like housing and transport as written in your contract. This differs from the UAE, which uses basic salary only.
One third of the full award. Four years of full award is ½ month × 4 = 2 months' wage, so resigning pays one third of that — about 0.67 of one month's wage.
No statutory cap — the award keeps growing with each year of service, at one month's wage per year after the fifth year.
No. The employee GOSI deduction applies to Saudi nationals only; for expatriates the employer pays a 2% occupational-hazards contribution and the employee pays nothing.