This end of service calculator applies Article 84 of the Saudi Labor Law to your own figures. Enter the last monthly wage, the start date and the last working day, then choose why the service ended: the page works out the full award, applies the resignation fractions in Article 85 or the exceptions in Article 87, and splits the result between the first five years and the years after. The timeline shows where the service sits against the two-, five- and ten-year thresholds. Advanced mode adds a monthly EOSB provision for several employees, built for the finance team closing the books.
How to compute end of service in Saudi Arabia
End of service benefits (EOSB), which many expatriates still call gratuity, are the lump sum a private-sector employer in the Kingdom pays when the employment relationship ends. Article 84 bases the award on the last wage: half a month for each of the first five years of service and one month for each year after that, with part years paid in proportion to the time worked.
EOSB = W × 0.5 × min(Y, 5) + W × max(Y − 5, 0)
W is the last monthly wage and Y the service in years. For the ESB computation, the calculator turns extra months into a fraction of a year by dividing by 12, and extra days by dividing by 365, then applies the share that matches the reason for leaving.
End of service benefits on resignation
A resigning employee only receives the whole award after ten years. Article 85 sets the share of the Article 84 award according to continuous service:
| Continuous service at resignation | Share of the award |
|---|---|
| Under 2 years | Nothing |
| 2 to 5 years | One third |
| Over 5 and under 10 years | Two thirds |
| 10 years or more | Full award |
The two-year line counts continuous service. Someone who resigns after one year and eleven months receives nothing, even though the full award for that period would be close to one month's pay.
End of service after 10 years
From ten years on, resignation and termination pay the same: the full award. An employee on SAR 10,000 who has served exactly ten years receives (10,000 × 0.5 × 5) + (10,000 × 5) = 75,000.00, seven and a half months of pay. Every year past the tenth adds a full month's wage.
ESB computation in the private sector: which wage counts
Article 84 uses the last wage, and Article 2 of the law defines the wage as the actual wage: basic salary plus allowances, commissions, sales percentages, regular bonuses and benefits in kind that the employee is entitled to. Housing and transport allowances paid every month belong in the figure; the basic salary alone understates the award. A one-off payment for a specific assignment, such as a per diem for a business trip, is not treated as part of the fixed wage.
If part of the pay is a variable commission, use the average that the contract or the company's work regulations set, and enter the result as the wage. If the wage changed during the employment, the last wage counts, not an average across the years.
Counting the service period and unpaid leave
Service runs from the start date to the last working day, and both days count. Someone who started on 2022-01-01 and whose last day was 2024-12-31 has served exactly three years. A notice period the employee actually worked is part of the service.
Under the Article 2 definition of continuous service, unpaid absence of up to 20 non-consecutive days a year does not break continuity. To leave out days that should not count as service, such as a long unpaid leave agreed between you, enter them in advanced mode and the calculator takes them off the last working day before measuring the period.
When the full award applies despite leaving, and when it is lost
- Force majeure (Article 87): an employee who leaves for a reason beyond their control receives the full award whatever the length of service.
- Female employee after marriage or childbirth (Article 87): the full award is due if she ends the contract within six months of her marriage contract or three months of giving birth.
- Article 81 cases: the employee may leave without notice when the employer breaches essential obligations, commits an assault, or leaves a serious hazard in place, and keeps every statutory right.
- Article 80 cases: the employer may terminate for listed reasons, including assault, forgery, disclosing trade secrets and absence without excuse after a warning. These remove the award, provided the employee was given a chance to state their objections.
Changing the reason in the list updates the result at once, and the PDF report names the article the amount rests on.
End of service dues beyond the award
The award is one line in the final settlement. The settlement also carries the wage for days worked in the last month, the balance of unused annual leave, any compensation for notice or for ending a fixed-term contract early under Article 77, and deductions for outstanding advances or loans. This calculator does not compute those items, so list them in the settlement separately from the award and the employee can see every figure and where it came from.
The Labor Law after the 2025 amendments
The Ministry of Human Resources and Social Development announced that amendments to the Labor Law took effect on 19 February 2025, amending 38 articles, removing 7 and adding 2, according to the ministry's announcement. Part of the change touched resignation and how it is accepted. The text of Articles 84, 85 and 87 in the version published by the Bureau of Experts is unchanged, and the calculator follows it. For resignation procedure and deadlines, check the updated implementing regulations.
Qiwa and labor office end of service calculations
People who look for a Qiwa end of service calculator, or for the labor office figure, usually want a number that holds up if the case reaches a labor dispute in Saudi Arabia. Both rest on the same articles; this page applies them and prints the text of every article it used in the report. When two calculations for the same employee disagree, the gap almost always comes from one of two inputs: the wage used (basic only, or with allowances) and the last working day.
The calculator covers the private sector under the Labor Law, which includes teachers at private schools. Government employees fall under the civil service and retirement rules, which work differently and are not covered here.
The EOSB provision and its journal entry
The award builds up every month, so the company books it as a provision before paying it. The end of service provision is what the company would owe each employee if their service ended on the balance sheet date, and the month's expense is the change between this month-end balance and last month's. The monthly entry is Dr End of service expense, Cr Provision for end of service benefits; on payment, Dr Provision, Cr Bank.
In advanced mode, add your employees with their wages and start dates, and the page shows each balance, the month's charge, the total and the journal line. Download the table as an Excel file to change wages or the valuation date yourself: service years, balances and charges are live formulas. The figures assume the full award; companies that measure the obligation actuarially under their accounting framework should agree the method with their auditor.
Common mistakes in end of service calculations
- Using the basic salary alone, when the actual wage includes fixed allowances.
- Applying half a month to every year, which loses half a month's pay for each year after the fifth.
- Applying the resignation fraction only to the years after the fifth; one third or two thirds applies to the whole award.
- Ignoring the months and days beyond the last full year, which are due pro rata.
- Folding the award, the leave balance and Article 77 compensation into one figure, so nobody can later trace where a difference came from.
What to do with the result
Download the report with the Download PDF button: it shows the inputs, each period, the amount in words and the text of the articles behind it, ready to attach to the final settlement or the employee file. If a colleague needs to review the same calculation, Share link copies a link that opens the calculator with your figures. To add the value of the unused leave balance to the settlement, use the annual leave calculator.
When the provision becomes a line in every month-end close
One leaver's award takes minutes. A monthly provision for dozens of people, with pay rises, new hires and resignations, needs employee files, payroll and the ledger in one place; otherwise every close turns into matching two spreadsheets by hand. At Microtec we build an ERP accounting system for companies in Saudi Arabia, where human resources and finance run alongside sales, purchasing and inventory. Test it on your own staff list before you decide.