How it is calculated
Article 84 (contract end or employer termination): half a month’s wage for each of the first five years and a full month’s wage for each year after, with partial years pro-rated.
Article 85 (resignation):
| Service | Entitlement |
|---|---|
| Under 2 years | Nothing |
| 2 to under 5 years | One third |
| 5 to under 10 years | Two thirds |
| 10 years or more | Full award |
Article 87: the full award is due if the worker leaves due to force majeure, or if a female worker ends her contract within six months of marriage or three months of giving birth.
The wage used is the last actual wage: basic plus fixed allowances such as housing and transport.
Worked example
An employee with an actual wage of SAR 10,000 and 8 years of service: full award = 5 × 0.5 + 3 × 1 = 5.5 months = SAR 55,000. On resignation, two thirds = SAR 36,666.67.
Frequently asked questions
Is it based on basic salary only?
No — on the last actual wage including fixed allowances, unless the contract gives the worker more.
Do I get it if dismissed under Article 80?
No, dismissal under Article 80 (serious misconduct) forfeits the award.
Contract end vs resignation?
At the end of a fixed-term contract or on employer termination the full award is due; on resignation it is reduced by length of service.
Does unpaid leave count?
Unpaid leave periods are generally excluded from service — subtract them.
Rules last checked: 2026-10