End of Service Benefits in Saudi Arabia (KSA)

End of Service Benefits in Saudi means as a worker or employee working in the Kingdom of Saudi Arabia (KSA) and your services have ended you are entitled to receive some services benefits including cash as per the Saudi Labor Law. This is a basic law granted by the Saudi Arabian laws/officials were whether you are a full time employee or a contract employee (indefinite or fixed term) you are entitled to get a certain benefit in cash which the employer is obligated to pay.

End of Service Benefits in Saudi Arabia (KSA)

End of Service Benefits Calculation

There are many sites available online which can do the benefits calculation for you, however, essentially the process of calculating remains the same. It is also important to understand the rationale behind the benefit calculation so that you are in the right position to confidently ask your employer for the same.

However, even though as mentioned above all people are working in Saudi should get their End of service benefits, there are still a few exceptions to this benefit even by the law:

  1. If the employee is not legally employed or working at Saudi Arabia
  2. If they are working on Business visa which means they are an employee to someone
  3. Finally, anyone working on a consultancy contract

According to law and article 84 for people who have been terminated or who have resigned willingly, are entitled to get EOSB (End of Service Benefits) depending on the number of years of experience or tenure in that company or for that employee for the services provided.

    • Half Salary for first 5 yrs of services provided
    • Full Salary after 5 yrs for each service year thereafter they had worked and were employed in the same company
    • Basically if your experience is anywhere between 1-5 yrs you get only half your last drawn salary for each of those years they worked. If you have 5+ yrs of experience then it is combination of both above + full (last drawn) salary for the all the next consecutive years of experience gained
    • A quick example to explain the above calculation would be
      • If ABC drew SR 10,000 as the last drawn salary and years of experience is 8 yrs then the EOSB they are eligible for is SR 55,000
        • End of service benefit for first 5 yrs = 10,000 x 5 (yrs) / 2 (half salary) = 25,000
        • End of service benefit for next 3 yrs = 10,000 (full salary)  x 3 (yrs) = 30,000
        • Now total both, Total EOSB for ABC = 25,000 + 30,000 = 55,000
      • Likewise if XYZ drew 5,000 as the last drawn salary and years of experience is 5 yrs then the EOSB he/she is eligible for = 5000 x 5 / 2 = SR 12,500
    • Note : for an employee terminated under Article 80 is not eligible for a EOSB unlike those terminated under Article 84
  • Employee who has resigned within 2 yrs of employment also is not eligible for any EOSB

Some other scenarios according to Article 85:

  • For those who have resigned between 2-5 yrs – after 2 yrs and before 5 yrs of employment the calculation for End of Service Benefits (EOSB) is different. In this case you are entitled for 1/3rd of total EOSB according to Article 85.
    • For ex same ABC has reigned after 4yrs of working then their End of Service Benefit will be SR 6,667
      • (10,000 x 4 / 2) x ⅓ = SR 6,667 
  • Resigns after 5 yrs but before 10 yrs – they are eligible for 2/3rd of total EOSB
    • EX: ABC has resigned after working for 7 yrs in a company his/her EOSB will be SR 30,000
    • EOSB for first 5 yrs = (10,000 x 5 / 2) x ⅔ = SR 16,667
    • EOSB for next 2 yrs = (10,000 x 2) x ⅔ = SR 13,337
    • Total = SR 30,000 
  • Resigns after 10 yrs of services of being employed in the same company is entitled for the FULL End of Service Benefits EOSB according to Article 85
    • ABC has resigned after completion of 11 yrs in a company his/her EOSB will be SR 85,000 (if the last drawn salary was SR 10,000)
      • EOSB for first 5 yrs = 10,000 x 5 (yrs) / 2 = SR 25,000
      • EOSB for next 5 yrs = 10,000 x 6 (yrs) = SR 60,000
      • Total = SR 85,000 
  • For folks on contract if they resign before completion of their contract period they get half the salary as EOSB benefits and if your contract just ends on a scheduled date then you are eligible for a full EOSB for that year/those years (Article 84)
  • Now some bits from Article 81:
    • Employee who resigns under Article 81 EOSB will be calculated as
      • Half salary for first 5 yrs
      • Full salary for the next each year 
  • EOSB for Domestic Help:

    • (End of Service Benefits) EOSB is a calculated little differently for domestic workers, for them they are entitled to get one month’s full salary after 4 consecutive years of working. 
  • Claiming End of Service Benefits:

    • You can claim your EOSB within 1 week if you were terminated or 2 weeks in cases of resignation

  • Exceptions for EOSB according to Article 87 (who will still get full EOSB)

    • Female employees resigning due to marriage and 6 months within the date of marriage
    • Female employees resigning due to childbirth and within 3 months of delivery
    • Employee resigns due to natural disabilities which are permanent in form
    • Sudden demise or death of the employee

You can still use online calculators to get your EOSB (End of Service Benefits) as far as you have understood what you are eligible for and how. Hope this article has helped you gain that knowledge which is imperative for all working professionals at Saudi Arabia.

Source: Saudi Expatriate

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