End of Service Gratuity Calculator

End-of-service gratuity is an employee right when a labor contract ends. Article 84 of the Saudi Labor Law sets the baseline: half a month's wage for each of the first five years of service, then a full month for each subsequent year, calculated on the last monthly wage (including fixed allowances).

Core formula (Article 84)

Base gratuity multiplies years of service by the tier rate and the monthly wage.

Gratuity = (first 5y × 0.5) + (years after × 1.0) × monthly wage

Resignation tiers (Article 85)

If an employee resigns from an indefinite contract, they get a percentage of the base gratuity based on tenure:

• Under 2 years: nothing (0%).
• From 2 to under 5 years: one third (1/3).
• From 5 to under 10 years: two thirds (2/3).
• 10 years and above: the full gratuity (100%).

Full-entitlement cases

The employee receives 100% of the base gratuity when: a fixed-term contract ends naturally, the employer terminates the contract, retirement, death (paid to heirs), or contract termination by force majeure (Article 81).

Worked example

An employee with 7 years of service and a last monthly wage of SAR 10,000, terminated by the employer:

1. First 5 years: 5 × 0.5 × 10,000 = SAR 25,000
2. Following 2 years: 2 × 1.0 × 10,000 = SAR 20,000
3. Base gratuity = 25,000 + 20,000 = SAR 45,000
4. Entitlement = 100% (employer termination)
5. Final gratuity = SAR 45,000

Things to remember

• The wage used is the last monthly wage including fixed allowances (housing, transport), but not variable amounts (commissions, bonuses).
• Fractional years are paid pro rata — 6 months = half a year.
• If the employee terminates due to an employer breach (Article 81), they keep the full gratuity.
• Download the formal PDF report — it cites the relevant Labor Law articles.