How to calculate your EOS gratuity, resignation vs termination scenarios, and what your employer must pay you under Saudi Labour Law.
End of Service (EOS) gratuity — also called مكافأة نهاية الخدمة — is a lump-sum payment that Saudi Labour Law requires employers to pay employees when their employment contract ends. It is governed by Saudi Labour Law Article 84 and applies to all private sector employees: Saudi nationals and expatriates alike.
EOS is a legal right — not a bonus. It is separate from your final salary, any unpaid leave balance, and GOSI pension entitlements.
| Years of Service | EOS Rate per Year | Applicable Scenarios |
|---|---|---|
| Less than 2 years | Zero EOS | Resignation only (termination = full) |
| 2 to 5 years (resigned) | ½ month basic salary/year × ⅓ | Resignation between 2–5 years |
| 5 to 10 years (resigned) | ½ month basic salary/year × ⅔ | Resignation between 5–10 years |
| 10+ years (resigned) | Full EOS (½ month/yr up to 5, 1 month/yr after) | Resignation after 10 years |
| Any period (terminated) | Full EOS from day one | Employer terminates contract |
| First 5 years (full rate) | ½ month basic salary per year | Both resignation and termination |
| After 5 years (full rate) | 1 full month basic salary per year | Both resignation and termination |
An employee has worked for 7 years with a basic salary of SAR 8,000/month and resigned:
First 5 years: 5 years × (½ month × SAR 8,000) = 5 × 4,000 = SAR 20,000
Next 2 years: 2 years × (1 full month × SAR 8,000) = 2 × 8,000 = SAR 16,000
Total EOS (full, after 5 years): SAR 36,000
But resigned after 7 years (5–10 year bracket = ⅔ rule): SAR 36,000 × ⅔ = SAR 24,000
Under Saudi Labour Law, the employer must settle all final dues including EOS within 7 days if the employee resigned, or immediately if the employer terminated the contract. Late payment can result in the Labour Court ordering the employer to pay penalties.
Both fixed-term and open-ended contract employees are entitled to EOS. For fixed-term contracts that are not renewed: full EOS is due regardless of length of service. If an employee leaves before a fixed-term contract expires without justification, they may forfeit their EOS entitlement in some cases — consult the Ministry of Human Resources at hrsd.gov.sa.