⚖️ Saudi Labor Law Article 84 - End of Service Calculator

Article 84 of Saudi Labor Law states that when employment ends, the employer must pay the worker an end-of-service award equal to half a month's wage for each of the first five years of service, and one full month's wage for each year thereafter. The calculation is based on the employee's last wage, and workers are entitled to proportional benefits for partial years worked. This applies regardless of who terminates the employment relationship.

In Saudi Arabia, end-of-service benefits under Article 84 are calculated on your TOTAL monthly wage, not just basic salary. This includes all components: basic salary, housing allowance, transportation allowance, phone allowance, food allowance, and any other regular monthly payments. This is different from UAE law which uses only basic salary. For example, if you earn SAR 10,000 total (SAR 6,000 basic + SAR 4,000 allowances), the calculation uses the full SAR 10,000.

Yes, Article 85 applies reductions when you voluntarily resign: If you resign between 2-5 years of service, you receive only 1/3 of calculated benefits. Between 5-10 years, you get 2/3 of benefits. Only after completing 10 years do you receive full benefits when resigning. However, these reductions do NOT apply if your employer terminates you, if your contract expires, or if you qualify for Article 87 exceptions (force majeure, marriage, childbirth for women).

For exactly 5 years of service, you receive half a month's salary for each year: Monthly Salary × 0.5 × 5 = 2.5 months total salary. Example: With SAR 8,000 monthly salary, you get 8,000 × 0.5 × 5 = SAR 20,000. If your employer terminates you or your contract expires, you receive the full amount. If you resign voluntarily with 5 years service, Article 85 gives you only 2/3 of this amount (SAR 13,333 in this example). Wait until 10 years to get full benefits when resigning.

According to Article 88, employers must pay end-of-service awards within specific timelines: 1 week from termination date if the employer ends the contract, or 2 weeks if the employee resigns. Payment should include all dues: end-of-service award, any unpaid salary, unused vacation balance, and other entitlements. If your employer delays beyond these periods without valid reason, you can file a complaint through the Ministry of Human Resources (HRSD) via Qiwa platform or labor offices.

Article 84 defines the basic calculation method: half-month per year for first 5 years, one month per year thereafter, based on last wage. Article 85 applies REDUCTIONS when employees resign voluntarily before completing 10 years: 1/3 of Article 84 amount after 2-5 years, 2/3 after 5-10 years. Think of it this way: Article 84 tells you how much to calculate, Article 85 tells you when that amount gets reduced. If employer terminates you, only Article 84 applies (full amount). If you resign, both articles apply (reduced amount until 10 years).

Employers can legally deduct from your end-of-service only: outstanding loans or advances you received from the company, amounts for damages you caused to company property (must be documented and proven), penalties for violations specified in your contract, unpaid notice period compensation if you didn't serve proper notice. They CANNOT deduct for training costs, recruitment expenses, business losses, or arbitrary penalties. All deductions must be documented and justified. If you believe deductions are unfair, file a complaint with HRSD with your employment contract and evidence.

Article 84 clearly states workers are entitled to proportional benefits for partial years. Calculate by converting months to decimal years: divide months by 12. Example with 6 years and 3 months (6.25 years) at SAR 10,000: First 5 years = 10,000 × 0.5 × 5 = SAR 25,000. Remaining 1.25 years = 10,000 × 1 × 1.25 = SAR 12,500. Total = SAR 37,500. Even if you work just one additional month past a full year, you're entitled to that proportional amount according to the law.