How to Calculate End of Service Benefits in Saudi Arabia

Saudi Arabian employees have the right to End of Service Benefits when their employment contract is terminated.

When an employment contract is terminated, the worker’s end-of-service rights are granted to the employer, and whether the employment was a fixed-term or long-term contract, the employer must pay the employee at that time.

ESB Reward Calculator in KSA

The Saudi Arabian Ministry of Labor developed this ESB Reward Calculator. Visit this link to open the calculator: https://laboreducation.mlsd.gov.sa/en/calc

With the following details, fill in the blanks:

Type of Contract
End of Service reason
Salary
Duration of service (Years)
Number of months (It’s optional)
Number of days (It’s also optional)

After filling in the detail, click the calculate button to calculate the ESB reward.

Who is eligible for an ESB?

All Saudi Arabian employees are entitled to end-of-service benefits, with the following three restrictions:

Employees whose Iqama sponsorship has not yet been transferred are currently employed.
Employees who are visiting the country on business.
For instance, IT consultants are hired on a consulting basis.

Whether an employee is fired or resigns impacts the gratuity calculation.

ESB benefits in case of Termination

An employee is entitled to the following end-of-service benefits in the event of Termination under Saudi Labor Law article 84:

Each year of service during the first five years is paid with a half-salary.
You will receive your full pay for every additional year you worked past the first five.
Remember that if a person is fired per Saudi Labor Law Article 80, they do not have the right to ESB.

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ESB benefits in case of Resignation

Suppose you were to resign,

Seven distinct circumstances can affect the calculation of end-of-service compensation in the case of a resignation.

Zero ESB if Resignation is not accepted within two years.

According to Saudi Labor Law Article 85, a worker is not eligible for any end-of-service bonuses if he leaves his job within two years without finishing his contract.

A resignation lasting between two and five years

If an employee leaves their position after two years but before accumulating five years of service, Saudi Labor Law Article 85 applies, which is:

The person is qualified for one-third of his ESB award.
ESB Reward: Half-pay (of a year)

Resignation for a 5–10-year period

An employee who leaves their job after five years but before ten years of service is entitled to the following perks under Saudi Labor Law Article 85:

He will receive two-thirds of his ESB prize.
ESB Reward: Half salary for the initial five years, followed by total compensation in the years after that.

After ten years of Resignation.

According to Saudi Labor Law Article 85, employees who leave their job after ten years would get all their end-of-service benefits.

You will receive half of your yearly salary for the initial five years.
The total pay for the future years will be given to you.

Resign at the end of contract conclusion

An employee is entitled to the total amount of his end-of-service benefits if he leaves his job before the conclusion of his contract.

You will receive half of your yearly salary for the initial five years.
After the first five years, you will receive a complete refund.
The ESB will be determined as though the person had been fired.

Per Article 81, Resignation

Employees who quit per Saudi Labor Law Article 81 are still qualified for all end-of-service rewards. This calculation is included in the KSA ESB Benefits Calculator.

Per Article 87, Resignation

The following workers will also receive the ESB incentive per Saudi Labor Law Article 87.

A female employee who leaves her job within six months after getting married.
A female worker leaves her job three months after giving birth to a child.

A worker leaves their job owing to a natural illness.
If one of the employees passes away.

What is included in ESB Reward?

All fixed benefits paid to employees are considered for calculating end-of-service rewards per Saudi Labor Law’s Article 2. Examples include the following:

Basic Salary
Mobile Allowance
Transportation
Housing

However, it excludes certain perks that depend on additional elements, such as bonuses, ticket allowance, and sales incentives.

ESB Payment Period

A Saudi employer is required to provide end-of-service rewards within the specified period by Article 88 of the Saudi Labor Law.

In case of Termination, one week
In case of Resignation, two weeks

The employee can submit a complaint with the Saudi Labor Court if the ESB is not paid within two weeks. Additionally, the employer will be charged SR 10,000 if the ESB is delayed for longer than two weeks.

According to the Saudi Arabian Monetary Agency (SAMA), banks cannot withhold end-of-service incentives without a court ruling.

ESB for Domestic Workers

In accordance with Section 16 of Council of Ministers Resolution 310:

Domestic workers receive one salary after four years of employment.
A housemaid or house driver who has worked for 12 years will receive three monthly payments as part of the ESB reward.

Unfortunately, the Saudi Arabian end-of-service computation was not used to determine the ESB for domestic workers.

Conclusion:

Check out the ESB calculator to determine your benefits after your employment is done if your contract is canceled or you are retired. We hope this post was informative and that all of your doubts have now been cleared up.

How to calculate ESB in KSA?