End of Service Benefits
مكافأة نهاية الخدمة
Definition
End of Service Benefits (EOSB) — known as مكافأة نهاية الخدمة — is the mandatory gratuity payment Saudi employers must pay employees upon termination of employment. Governed by Articles 84, 85, and 87 of the Saudi Labor Law, it's calculated based on length of service and last drawn salary.
Why End of Service Benefits Matters in Saudi Arabia
Understanding End of Service Benefits is essential for any business operating in Saudi Arabia. The Kingdom's Vision 2030 economic transformation plan places heavy emphasis on labor market reform and nationalization. Companies that fail to comply with employment regulations face significant penalties including fines, service suspension, and visa blocks. Whether you are an HR manager, business owner, or employee, mastering this concept helps ensure compliance and operational continuity in the Saudi market.
EOSB Formula
- First 5 years: Half month's salary per year
- After 5 years: Full month's salary per year
Resignation Entitlement
- Less than 2 years: No entitlement
- 2–5 years: One-third of EOSB
- 5–10 years: Two-thirds of EOSB
- Over 10 years: Full EOSB
Use our End of Service Calculator for exact calculation.
🔗 Related KSA Calculator
🇸🇦Free online tool — calculate instantly with the latest 2025/2026 rules