🇸🇦 Saudi Gratuity Calculator After 5 Years

If you resign after completing exactly 5 years in Saudi Arabia, you receive TWO-THIRDS (66.67%) of the full EOSB. Full EOSB at 5 years = (Basic Salary ÷ 30) × 15 days × 5 years = 2.5 months salary. Your entitlement = 2.5 months × 2/3 = 1.67 months of basic salary. Example: SAR 9,000 salary → Full EOSB = SAR 22,500 → You receive = SAR 15,000. This is because 5 years places you in the "5 to 10 years" bracket where resignation entitles you to 2/3 payment, which is double the 1/3 you would get in the 2-5 year bracket.

No, only BASIC SALARY is used for EOSB calculation in Saudi Arabia. Housing allowance, transport allowance, mobile allowance, and other benefits are excluded. Your employment contract should clearly separate basic salary from allowances. Example: If your total package is SAR 15,000 (SAR 10,000 basic + SAR 3,000 housing + SAR 2,000 transport), only the SAR 10,000 basic is used. This is why negotiating higher basic salary versus allowances is strategically important. However, if your salary includes variable components, the average of the last 3 years of basic salary may be used according to Article 84 of Saudi Labor Law.

Partial years are calculated proportionally. For 5.5 years: First 5 years: (Salary ÷ 30) × 15 × 5 = 2.5 months. Additional 6 months (0.5 year): (Salary ÷ 30) × 30 × 0.5 = 0.5 months (note: after 5 years, rate increases to 30 days per year). Total full EOSB = 3.0 months of basic salary. Example with SAR 8,000 salary: (8,000 ÷ 30) × 75 = SAR 20,000 (first 5 years) + (8,000 ÷ 30) × 15 = SAR 4,000 (extra 6 months) = SAR 24,000 total. If you RESIGN: SAR 24,000 × 2/3 = SAR 16,000. The extra 6 months adds significant value to your EOSB!

Saudi Labor Law requires employers to settle EOSB within the final settlement period, typically within 7-14 days after your last working day. The payment should include: EOSB amount based on your service years, any unused annual leave pay, outstanding salary for final month worked, and any other contractual benefits. If your employer delays payment, you can file a complaint with the Ministry of Human Resources and Social Development (MHRSD) through their online portal. Keep all documentation including employment contract, payslips, and resignation acceptance letter to support your claim if needed.

Employers can only deduct from EOSB for legitimate reasons: Outstanding loans or advances given by employer (with proper documentation), Damages caused by proven employee negligence or misconduct, Any amounts owed to company under signed agreements. Employers CANNOT deduct for: Normal wear and tear of equipment, Training costs (unless specified in contract with specific conditions), Notice period shortfall (separate matter, not deductible from EOSB), General performance issues or subjective penalties. If you believe deductions are unfair, request written justification and documentation. You can dispute improper deductions through MHRSD labor office. Always get final settlement breakdown in writing before signing any clearance documents.

No, Saudi Labor Law does not impose a maximum cap on EOSB payments. Your entitlement is calculated purely based on your last basic salary and years of service, regardless of how high the amount becomes. For example, an employee with SAR 50,000 monthly basic salary who works 20 years would receive: (50,000 ÷ 30) × [(15 × 5) + (30 × 15)] = (1,667 × 525) = SAR 875,175 as full EOSB. However, some employment contracts may specify maximum EOSB amounts or alternative calculation methods. Any such limits must be clearly stated in the contract and agreed upon by both parties. Generally, contractual terms cannot provide less than the legal minimum EOSB, but they can offer more.

From EOSB perspective, waiting until 10 years is significantly better. At 5 years (if you resign): You get 66.67% of EOSB = approximately 1.67 months salary. At 10 years (if you resign): You get 100% of EOSB = approximately 6.25 months salary (2.5 months for first 5 years + 3.75 months for second 5 years). Example with SAR 10,000 salary: 5 years resignation = SAR 16,667. 10 years resignation = SAR 62,500 (nearly 4× more!). However, consider: Career opportunities and salary growth elsewhere, Job satisfaction and work environment, Industry changes and skill development. Sometimes taking a higher-paying role elsewhere after 5 years yields better long-term financial outcome despite lower EOSB. Do the math based on your specific salary trajectory and opportunities.

Yes, Saudi Labor Law EOSB provisions apply equally to both Saudi nationals and expatriate workers in the private sector. The calculation method, eligibility criteria, and payment percentages are identical regardless of nationality. However, there are some practical differences: Saudi nationals working in private sector receive EOSB under Labor Law. Saudi nationals in government sector may have different pension and end-of-service systems (not covered by Labor Law). Expatriates receive EOSB as their primary end-of-service benefit. Some companies may offer enhanced packages to Saudi nationals as part of Saudization incentives, but legal minimum EOSB remains the same for all. The resignation reduction percentages (33% for 2-5 years, 66.67% for 5-10 years) apply equally to everyone.