If you’re an expatriate working in Saudi Arabia’s private sector, it’s essential to know your rights when it comes to end-of-service benefits (ESB), commonly referred to as gratuity. Whether you’re planning to resign, your contract is expiring, or you’ve been terminated, knowing how to calculate your gratuity can provide you with financial clarity and peace of mind. This comprehensive guide will walk you through the essentials of calculating ESB according to Saudi Arabian labor laws as of 2026.
What Are End-of-Service Benefits?
End-of-service benefits (ESB) are a form of financial compensation that expatriate workers are entitled to receive from their employers at the end of their employment period. These benefits are mandated by Saudi Arabian labor laws, which aim to provide financial support to workers transitioning from one job to another. According to the Ministry of Human Resources and Social Development (HRSD), ESB is a fundamental right for all workers, including those on fixed-term and indefinite contracts.
The calculation and entitlement of end-of-service benefits under Saudi labor law begins from the first day of service until the last day of employment. This gratuity is considered one of the worker’s rights and is obligatory for employers to pay upon termination of the employment contract, regardless of whether it’s a fixed-term or indefinite contract.
Related: 10 Essential Steps Before Your Final Exit from Saudi Arabia (2026 Guide)
Steps to Calculate Your End-of-Service Benefits
The HRSD offers two convenient online calculators that simplify the process of determining your gratuity. Both tools are official, free to use, and regularly updated to reflect current Saudi labor law regulations. Here are your options:
Option 1: HRSD End-of-Service Benefit Calculator
- Visit the HRSD Calculator: Head over to the official calculator. This tool is specifically designed to help expatriates in Saudi Arabia calculate their ESB accurately without requiring login credentials.
- Enter Your Information:
- Actual Wage: Input your last drawn monthly salary in Saudi Riyals (SAR). This is typically your final monthly wage, which may include your basic salary plus certain fixed allowances as specified in your employment contract. Note that employers and employees may agree to exclude variable components such as commissions or sales percentages from the ESB calculation, but this exclusion must be explicitly documented in your employment contract.
- Contract Type: Choose between definite (fixed-term) or indefinite contract. This distinction is crucial as it affects the calculation method and the amount you’re entitled to receive.
- Reason for Termination: Select the appropriate reason from the available options, which include:
- Expiry of the contract term
- Resignation (voluntary termination by employee)
- Termination by the employer for unlawful reason
- Termination by the employee for unlawful reason
- Termination pursuant to specific labor law articles (Article 80, Article 81)
- Expiry of contract due to force majeure
- Termination by a female employee during the three-month period following childbirth
- Termination by a female employee within six months from the marriage contract
- Years, Months, and Days of Service: Enter the total number of years, months, and days you have been employed with your current employer to get a precise calculation. Note that your service is counted from day one, though probationary periods under 3 months are typically excluded from service calculations under Article 53.
- Calculate Gratuity: Once all the required fields are filled, click on the “Calculate the Reward” button. The calculator will then display the total amount of gratuity you are entitled to receive.
- Download Results: You have the option to download the result as a PDF file for your records, which can be useful for reference during your final settlement discussions with your employer.
Option 2: Qiwa Platform Calculator
The Qiwa platform, Saudi Arabia’s national employment services portal, also offers an integrated end-of-service calculator that many expatriates find user-friendly and convenient.
- Access the Qiwa Platform: Visit the official Qiwa platform at qiwa.sa or navigate directly to the End-of-Service Calculator section.
- Navigate to the Calculator: From the main page, go to the “Tools & Calculators” section or directly select “End-of-Service Reward” from the available services menu.
- Input Required Information: Enter the same information as required by the HRSD calculator:
- Your actual wage (last drawn monthly salary)
- Contract type (fixed-term or indefinite)
- Reason for employment termination
- Complete service duration (years, months, and days)
- View Your Results: Once all information is entered, the calculator will automatically display the amount you’re entitled to receive. The Qiwa platform processes the information instantly and provides clear results based on Saudi labor law provisions.
Both calculators apply the same Saudi labor law formulas and provide accurate estimates, so you can choose whichever platform you find more convenient to use.
Related: Expat Wage Insurance Scheme in Saudi Arabia: All You Need to Know
How is Gratuity Calculated in Saudi Arabia?
The calculation of gratuity in Saudi Arabia is governed by Articles 84 and 85 of the Saudi Labor Law. The amount you receive is based on your length of service, your last drawn wage, and the reason for termination. Here’s the breakdown:
For Fixed-Term Contracts:
If you complete your full contract term, you are entitled to full gratuity under Article 84. The gratuity is calculated as half of your monthly wage for each of the first five years of service and a full monthly wage for each subsequent year.
If you resign before completing your fixed-term contract, you typically forfeit your ESB unless special circumstances apply (such as force majeure or the special provisions for female employees).
Example: If you complete a 3-year fixed-term contract with a final monthly salary of 10,000 SAR:
- Calculation: 10,000 ÷ 2 × 3 = 15,000 SAR
For Indefinite Contracts:
The entitlement varies based on your reason for leaving and your length of service:
If You Resign (Voluntary Termination) – Article 85:
| Service Duration | ESB Entitlement |
|---|---|
| Less than 2 years | None |
| 2 to less than 5 years | 1/3 of full gratuity |
| More than 5 but less than 10 years | 2/3 of full gratuity |
| 10 years or more | Full gratuity |
Important Note: The official wording of Article 85 states: “to two thirds if his service is in excess of five consecutive years but less than 10 years, and to the full award if his service amounts to 10 years or more.” This means that at exactly 10 years, you receive FULL gratuity, not two-thirds.
If Your Employment is Terminated by the Employer – Articles 74/85:
If you’ve completed more than one year of service and are terminated by your employer, you are entitled to full gratuity regardless of your total length of service. This applies even if you have less than 2 years of service.
If Terminated Under Article 81 (Beyond Employee’s Control):
Full gratuity is payable regardless of tenure if the employment ends due to circumstances beyond the employee’s control as outlined in Article 81 of the Saudi Labor Law.
Calculation Formula:
For the first 5 years of service:
- Half month’s salary for each year worked
For each year beyond 5 years:
- One full month’s salary for each year worked
For partial years:
- Gratuity is calculated proportionally for any additional months and days worked
Example: An employee with 7 years and 3 months of service and a final monthly salary of 8,000 SAR:
- First 5 years: 8,000 ÷ 2 × 5 = 20,000 SAR
- Next 2 years: 8,000 × 2 = 16,000 SAR
- Additional 3 months: (8,000 × 3) ÷ 12 = 2,000 SAR
- Total ESB = 38,000 SAR
Special Provisions for Full Gratuity
According to Article 87 of the Saudi Labor Law, employees are entitled to receive full end-of-service gratuity regardless of their length of service in the following special circumstances:
- Force Majeure: If the employee leaves work due to circumstances beyond their control (force majeure).
- Article 81 Termination: If employment ends due to circumstances outlined in Article 81, which are beyond the employee’s control, full ESB is payable regardless of tenure.
- Female Employee Provisions:
- If a female employee terminates her employment within three months after giving birth, she is entitled to receive full gratuity payment regardless of her length of service.
- If a female employee terminates her employment within six months after getting married, she is entitled to receive full gratuity payment.
These special provisions recognize specific life circumstances and ensure fair treatment of employees during significant life events.
Factors Affecting Your Gratuity Calculation
Understanding the factors that influence your end-of-service benefits calculation is crucial for accurate financial planning:
1. Reason for Termination
As previously mentioned, the reason for your contract ending plays a significant role in determining your gratuity. Resignation typically reduces the amount you receive compared to the completion of a contract term or termination by the employer. The special provisions for female employees and force majeure situations can also significantly impact the final amount.
2. Service Duration
The length of your service directly correlates with the amount of gratuity. The longer you have been employed, the higher the gratuity, especially if you surpass significant milestones like five and ten years. Your complete service duration—including years, months, and days—is taken into account for precise calculations.
Important Note: While your service is counted from day one of employment, probationary periods under 3 months are typically excluded from final ESB service calculations under Article 53 of the Saudi Labor Law.
3. Salary Components
It’s essential to use your last drawn wage for calculations. According to Saudi labor law Article 84, the term “wage” includes the basic salary plus all other increases and benefits determined for the worker in return for their efforts, work-related risks, or as specified in the employment contract or labor regulations.
However, employers and employees may agree that certain variable wage components—such as commissions, percentages, and similar pay elements that fluctuate by nature—will not be included in the wage used as a basis for calculating the end-of-service award. This exclusion must be explicitly documented in your employment contract to be valid. If your contract doesn’t clearly state which components are excluded, all regular wage elements should be included in the ESB calculation.
4. Contract Type
While both fixed-term and indefinite contracts entitle workers to ESB, the way the employment ends affects the gratuity amount. Fixed-term contracts that run their full course typically result in full gratuity entitlement under Article 84, while indefinite contracts may result in partial gratuity if the employee resigns before reaching certain service milestones under Article 85.
Important Considerations for Expatriates
Contract Review
The specific terms and conditions outlined in your employment contract may influence how gratuity is calculated. Always review your contract details alongside the Saudi Labor Law provisions to understand your exact entitlements. Pay special attention to any clauses regarding salary components and allowances included in ESB calculations, and ensure that any exclusions of variable pay are explicitly documented.
Final Settlement Timeline
According to Saudi labor law, when your employment ends, your employer has specific timelines for settling your dues:
- If the employer terminates the contract, they must pay your wages and settle your rights within one week at most from the date the employment contract ends.
- If you (the employee) terminate the contract, the employer must settle your full rights within a period not exceeding two weeks.
Exit Clearance for Expatriates
Critical for Expats: Non-Saudi workers need final clearance through the Qiwa platform to process their exit visa. Unpaid end-of-service benefits can block your final exit clearance. Ensure your ESB is settled before initiating your exit procedures to avoid complications with your departure from Saudi Arabia.
Documentation
Always maintain copies of important documents including your employment contract, salary slips, and any communications regarding your resignation or termination. These documents will be valuable when calculating your ESB and ensuring you receive the correct amount.
Why Understanding ESB Matters for Expatriates
For expatriates, understanding end-of-service benefits is crucial not just for financial planning but also for ensuring that your rights are respected under Saudi labor law. Whether you’re preparing to leave your job or simply planning for the future, being aware of your ESB entitlement can help you:
- Manage your finances more effectively: Knowing your expected gratuity helps you plan for your transition between jobs or your return to your home country.
- Prevent disputes with employers: Clear understanding of ESB calculations reduces the likelihood of disagreements during final settlement.
- Make informed career decisions: Understanding how different resignation scenarios affect your gratuity can influence your decision-making regarding when and how to leave your position.
- Negotiate better: Knowledge of your rights puts you in a stronger position during exit negotiations with your employer.
- Ensure smooth exit procedures: Understanding that unpaid ESB can block your final clearance helps you prioritize settling these dues before departure.
Common Scenarios and ESB Entitlements
Let’s look at some common scenarios to help you understand what you might be entitled to:
Scenario 1: Resignation after 3 years (Indefinite Contract)
- Service: 3 years, Salary: 12,000 SAR
- Entitled to: 1/3 of full gratuity (2 to less than 5 year tier)
- Full gratuity: 12,000 ÷ 2 × 3 = 18,000 SAR
- Actual entitlement: 18,000 ÷ 3 = 6,000 SAR
Scenario 2: Resignation after 7 years (Indefinite Contract)
- Service: 7 years, Salary: 15,000 SAR
- Entitled to: 2/3 of full gratuity (more than 5 but less than 10 years)
- Full gratuity: (15,000 ÷ 2 × 5) + (15,000 × 2) = 37,500 + 30,000 = 67,500 SAR
- Actual entitlement: 67,500 × 2/3 = 45,000 SAR
Scenario 3: Termination by employer after 18 months
- Service: 1.5 years, Salary: 9,000 SAR
- Entitled to: Full gratuity (employer termination after 1+ year)
- Calculation: (9,000 ÷ 2 × 1) + (9,000 ÷ 2 × 6/12) = 4,500 + 2,250 = 6,750 SAR
Scenario 4: Contract completion (Fixed-term) 2 years
- Service: 2 years, Salary: 10,000 SAR
- Entitled to: Full gratuity (completed contract term)
- Calculation: 10,000 ÷ 2 × 2 = 10,000 SAR
Scenario 5: Resignation after exactly 10 years (Indefinite Contract)
- Service: 10 years, Salary: 20,000 SAR
- Entitled to: FULL gratuity (10 years or more = full gratuity under Article 85)
- Full gratuity: (20,000 ÷ 2 × 5) + (20,000 × 5) = 50,000 + 100,000 = 150,000 SAR
- Actual entitlement: 150,000 SAR (100% – not reduced)
Scenario 6: Resignation after 9 years and 11 months (Indefinite Contract)
- Service: 9 years 11 months, Salary: 20,000 SAR
- Entitled to: 2/3 of full gratuity (less than 10 years)
- Full gratuity: (20,000 ÷ 2 × 5) + (20,000 × 4) + (20,000 × 11/12) = 50,000 + 80,000 + 18,333 = 148,333 SAR
- Actual entitlement: 148,333 × 2/3 = 98,889 SAR
When You May Not Receive ESB
It’s important to note that there are circumstances under which you may not be entitled to end-of-service benefits or may receive reduced amounts:
- Resignation with less than 2 years of service (Indefinite Contract): No gratuity is payable under Article 85.
- Early termination of fixed-term contract by employee: If you resign before completing your fixed-term contract without special circumstances, you typically forfeit your ESB.
- Termination for serious violations: If you’re terminated due to proven serious violations of labor law provisions or your employment contract terms, you may forfeit your right to ESB.
- Abandonment of work: Leaving your position without proper notice or approval may affect your entitlement.
What to Do If You Have a Dispute
If you believe your employer has not paid the correct amount of end-of-service benefits or is refusing to pay, you have several options:
- HRSD Hotline: Contact the Ministry of Human Resources and Social Development at 19911 for guidance and support.
- Qiwa Dispute Tools: Use the Qiwa platform’s labor dispute resolution services to file a formal complaint against your employer.
- Labor Office: Visit your local labor office to file a complaint and seek mediation.
- Legal Counsel: Consider consulting with a labor law attorney who specializes in Saudi employment matters.
Remember that documenting all communications and maintaining records of your employment contract, salary slips, and service duration will strengthen your case in any dispute.
Conclusion
Calculating end-of-service benefits accurately ensures that you receive the full compensation you’re entitled to under Saudi Arabian law. Using either the HRSD’s online calculator or the Qiwa platform at qiwa.sa provides a clear, transparent understanding of what you can expect at the end of your employment.
Both calculators are regularly updated to reflect the latest labor law amendments, making them reliable tools for estimating your ESB. However, remember that these calculators provide estimates. For complex situations, disputes, or if you have specific questions about your individual circumstances, always consult with HR professionals, labor law experts, or contact the HRSD hotline at 19911.
By staying informed about your rights and understanding how end-of-service benefits are calculated, you can make well-informed decisions about your employment and future financial planning while working in Saudi Arabia. Whether you’re considering resignation, facing termination, or simply planning ahead, knowing your ESB entitlement empowers you to navigate your career transitions with confidence.
For expatriates specifically, remember that your final exit clearance depends on settling all employment dues, including ESB. Plan ahead and ensure your employer processes your gratuity payment before you initiate your departure procedures to ensure a smooth exit from the Kingdom.
Disclaimer: This guide is for informational purposes only and reflects Saudi labor law as of 2026. While we strive for accuracy, labor laws and regulations may be updated. For specific legal advice regarding your individual situation, please consult with qualified legal professionals or contact the Ministry of Human Resources and Social Development directly.