Money · المال

Saudi Arabia End-of-Service Gratuity

Calculate the indemnity payable when leaving a Saudi Arabia job - half a month per year for the first five years, one full month per year thereafter, with KSA resignation reductions baked in.

Last reviewed 27 April 2026· Source: KSA HRSD - Labour Law (Royal Decree M/51)
Calculated on basic salary only - excludes housing, transport and other allowances. Total is capped at two years of salary. Resignation under one year forfeits the entitlement.
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How Saudi Arabia gratuity works

Under Saudi Labour Law Royal Decree M/51 (Article 84), every employee with at least one year of continuous service is entitled to end-of-service gratuity. The amount equals half a month of basic pay per year for the first five years, then one month per year thereafter - and the total is capped at two years' total salary.

Daily wage equals (basic monthly salary × 12) ÷ 365. Resignation under the prior limited-contract regime reduces the payout: 0% under one year, 33.33% from one to three years, 66.67% from three to five, and 100% from five years onward. Termination always pays 100% from year one.

Worked example

An employee with a basic salary of SAR 12,000 resigns after 3.5 years. Daily wage is 12,000 × 12 ÷ 365 = SAR 394.52. Years 1-5 entitlement: 394.52 × 21 × 3.5 = SAR 28,997. Resignation reduction at 66.67% gives a final gratuity of SAR 19,331.

Quick formulas

Daily wage = basic × 12 ÷ 365.
Years 1-5: daily × 21 × min(years, 5).
Years 5+: daily × 30 × max(years − 5, 0).
Total = (Years 1-5 + Years 5+) × resignation factor, capped at basic × 24.

Frequently asked questions

How is Saudi Arabia end-of-service gratuity calculated?
half a month of basic pay per year for years 1-5, then one month per year thereafter. The total is capped at two years' total salary.
Does resignation reduce my gratuity?
Under one year: 0%. One to three years: 33.33%. Three to five years: 66.67%. Five years and over: 100%. Termination always pays 100%.
Is gratuity based on basic salary or total salary?
Basic salary only - housing, transport and other allowances are excluded.
What is the maximum gratuity payout?
Two years of the employee's total salary, per Article 51 of the 2021 law.
Do part-time and remote workers get gratuity?
Yes - the 2021 law extended gratuity to part-time, temporary and flexible work models, prorated to working hours.

Reference only. This calculator implements the public formulas in Saudi Labour Law Royal Decree M/51 (Article 84). It does not replace legal advice - always confirm with MoHRE or qualified counsel.