A Guide to the End of Service Award in Saudi Arabia
One of the most attractive financial benefits of working in Saudi Arabia is the End of Service Award. This benefit serves as a long-term savings bonus that accumulates over your tenure with a company. Governed by Articles 84 and 85 of the Saudi Labor Law, this statutory benefit is designed to provide financial security to expats when their employment relationship concludes.
According to Article 84, when your contract ends naturally, your award is calculated based on your final actual wage. You are entitled to an amount equal to a half-month wage for each of the first five years of service. For any subsequent years, the benefit increases significantly, giving you a full one-month wage for each year of employment. This means the longer you remain dedicated to your employer, the larger your final payout will be.
However, if you choose to leave the company voluntarily before your contract expires, Article 85 outlines specific rules for resignation. If you resign after working between two and five consecutive years, you are entitled to receive one-third of the standard award. If your service is between five and ten years, your share increases to two-thirds of the award. If you have completed more than ten years of continuous service, you receive your full End of Service Award even if you resign.
To maximize your benefits, it is crucial to maintain excellent professional records and understand your contract terms. Knowing these rules allows you to plan your career moves and future savings with clarity. If you ever have doubts about how your final settlement was calculated, it is always a good idea to request a detailed breakdown from human resources. For complex calculations or disagreements regarding your tenure, consulting professional legal help can ensure you receive your rightful compensation.
Q&A section:
Q: What is the End of Service Award in Saudi Arabia?
A: It is a mandatory financial benefit paid to employees at the end of their employment, calculated based on their years of service and final salary.
Q: How much do I get if I resign after three years?
A: Under Article 85, if you resign with between two and five years of service, you are entitled to one-third of the accumulated award.
Q: Does the award increase after five years of work?
A: Yes, Article 84 states that you receive a half-month wage for each of the first five years, and a full one-month wage for every year after that.
If you ever need legal advice in Saudi Arabia, do not hesitate to contact us. We would be happy to support you and help guide you in the right direction!
