Getting the two inputs right: your service length and your wage
A Saudi end-of-service award comes down to two numbers, and most disputes trace back to one of them being wrong. The first is how long you worked. The second is which wage the calculation runs on. Get both right and the formula does the rest; get either wrong and you can be off by tens of thousands of riyals. This section looks closely at each, then shows how the same tenure pays out very differently depending on whether you were terminated or resigned.
How continuous service is counted
Service is measured as one continuous period from your first day to your last, and partial years are paid pro-rata rather than rounded down. An employee with 7 years and 6 months does not get benefit for 7 years only; the extra half-year accrues at the applicable rate. This matters because the accrual rate steps up after the fifth year, so the months on either side of that line are worth different amounts. Time spent on the job counts toward your total, including periods you were on paid leave. What you are building is a single, unbroken tenure figure, expressed in years and months, that feeds the formula. For a fuller walkthrough of the mechanics, see our guide to end-of-service calculation in Saudi Arabia.
Which wage the award uses
The award is calculated on the "agreed wage" defined under Articles 84 and 85 of the Labour Law. For most private-sector contracts, that agreed wage is the basic salary, excluding housing and transport allowances, unless the contract itself defines the wage to include those components. This distinction is not academic. Allowances commonly make up 30 to 50 percent of total pay, so running the calculation on gross instead of basic can inflate the figure by a third or more, and running it on basic when the contract says otherwise can shortchange you by the same margin. Before you calculate anything, read your contract to see exactly what it names as the wage, and check whether allowances are folded in or listed separately. Our explainer on whether EOS is based on basic or gross salary covers the wording to look for.
Terminated versus resigned: the same tenure, two different figures
The reason you leave changes what you receive. When employment is terminated by the employer, you get the full accrued award. When you resign, a reduced-scale rule applies for the first ten years of service, but once you pass ten years the resignation penalty falls away entirely and you receive the full award. The table below shows the same worker on a SAR 10,000 basic salary at three tenures, so you can see the gap open and then close.
Full award versus resignation payout, SAR 10,000 basic salary| Years of service | Full award (terminated) | Resignation payout |
|---|
| 3 years | SAR 15,000 | SAR 5,000 |
| 6 years | SAR 35,000 | SAR 23,333 |
| 12 years | SAR 95,000 | SAR 95,000 |
At 3 years the resigning employee receives only a third of the full award; by 6 years the gap has narrowed; and at 12 years the two figures are identical because the ten-year threshold has been crossed. The practical lesson is that resignation is rarely a "you get nothing" outcome, and after a decade of service it costs you nothing at all. For the full set of scale rules, see resignation versus termination EOS in Saudi Arabia.
Common mistakes and disputes
Three errors account for most disagreements. The first is calculating on gross pay instead of basic; because allowances can be 30 to 50 percent of total pay, this is the single largest source of inflated expectations and rejected claims. The second is miscounting service, either by rounding a partial year down or by treating the tenure as broken when it should be continuous. The third is the widespread belief that resignation pays nothing once you are long-serving; in fact, resignation after ten years pays the full award, and many employees leave money on the table by assuming otherwise. Check the wage basis against your contract, count your months precisely, and apply the correct rule for how you are leaving.
How to claim if your award is unpaid
If your end-of-service benefit is not paid, the route begins with an amicable settlement request through HRSD (the Ministry of Human Resources and Social Development) and the Qiwa platform. If that stage does not resolve the matter, the case proceeds to the Labour Courts. Prepare before you file: keep your employment contract, your payslips, and your termination or resignation letter, because these establish your tenure, your wage basis, and the reason for leaving, which are exactly the three facts the calculation turns on. Organised documentation shortens the amicable stage and gives you a clean record if the dispute reaches court.
